US stock outlook | The three major stock indexes fell sharply, and oil broke through $90, and the G20 finance ministers and central bank governors meeting is coming

Pre-market market trends

1. On August 31 (Monday), the futures of the three major US stock indexes fell before the US stock market. As of press release, Dow futures were down 0.20%, S&P 500 futures were down 0.21%, and NASDAQ futures were down 0.13%.

2. As of press release, the German DAX index fell 0.70%, the UK FTSE 100 index rose 0.20%, the French CAC40 index rose 0.13%, and the European Stoxx 50 index fell 0.25%.

3. As of press release, WTI crude oil rose 3.21% to $86.08 per barrel. Brent crude rose 5.34% to $90.72 per barrel.

Market news

The US military attacked Iran's rocket launcher, and Brent crude oil surpassed 90 US dollars. A sudden new exchange of fire broke out in the Strait of Hormuz, and international oil prices have once again soared, highlighting that the Middle East crude oil transportation channel is still weak after months of conflict. On Monday, Brent's November contract rose above $90 per barrel. Captain Tim Hawkins, a spokesman for the US Central Command, reported that on Sunday the US military carried out a military attack on an Iranian rocket launcher that was preparing to lay mines in this waterway, breaking the relative calm of several weeks. The crude oil market fluctuated sharply this month, and the monthly fluctuation of Brent futures was close to $17 per barrel. Oil prices have been repeatedly disrupted by conflicting intermittent cease-fire attempts, while also being pressured by Washington's tough statement that it will step up efforts to isolate and crack down on Iran's economy and force Tehran to surrender. However, analysts generally did not evaluate the actual actions taken by the US very highly, believing that they were not as strong as expected.

Bezent presided over the G20 finance ministers meeting this week. The G20 finance ministers and central bank governors meeting will be held in Asheville, North Carolina, USA from Monday to Tuesday. This meeting will be the next key point of policy communication. The Asheville Conference was supposed to be a key point in coordinating global economic policies. The conference focused on three core agendas — boosting global economic growth, strengthening financial sanctions against Iran, and dealing with developing countries' sovereign debt issues.

The yen once again fell below the 160 mark, and the market kept a close eye on the 161 intervention line. The exchange rate of the yen fell below the 160 mark against the US dollar, highlighting its vulnerability to further weakening and the increased risk of further market intervention by the Japanese authorities. Although the specific intervention threshold is unclear, strategists warned on Monday that the price that would trigger a new round of intervention could be around 161, followed by the 162-163 range. They still believe that, apart from buying time, such actions are unlikely to actually reverse the decline, as the yen has already taken back most of the gains made by the record intervention at the end of July.

Societe Generale warned that the Federal Reserve will raise interest rates three times before March next year. Société Générale expects the Federal Reserve to start raising interest rates in September, as continued inflation and an improving labor market are driving policymakers towards a more austerity stance. According to a recent report by Jan Gruen, chief US economist at Société Générale, the bank currently predicts that the Federal Reserve will raise interest rates by 25 basis points each at the September and December meetings, followed by another rate hike in March 2027. However, the report points out that the last rate hike was relatively uncertain.

Deutsche Bank and Nomura interpret Walsh's speech: The hawks turned clear, and the window for the Federal Reserve to raise interest rates in September opened. Federal Reserve Chairman Kevin Walsh's speech at the Jackson Hole meeting was unexpectedly hawkish, heating up market expectations for next month's rate hike. Deutsche Bank said, “Chairman Walsh's speech at the Jackson Hole conference surprised us with its clarity on the economy and outlook, as well as its clearly hawkish stance.” The agency continues to expect the Federal Reserve to raise interest rates by 50 basis points this year, once each at the September and December Federal Open Market Committee (FOMC) meetings. Nomura Securities said in the report that the market is extremely sensitive to recent inflation data. Walsh made hawkish remarks at the Jackson Hole Economic Symposium, stressing the importance of inflation targets and implying that if the anti-inflation process is not rapid enough, policies may need to respond.

Is the expectation of a 60% rate hike pure “self-indulgence”? Goldman Sachs threw cold water: The Federal Reserve's basic market in September was still on hold. Goldman Sachs is betting that Walsh's hawkish rhetoric will not be confirmed by hawkish data, so it still keeps the Federal Reserve on hold as its basic prediction. Goldman Sachs chief economist Jan Hazius said that Kevin Walsh's speech at Jackson Hall was his most hawkish appearance since taking office as chairman of the Federal Reserve, but he believes that a change in tone alone is unlikely to be enough to trigger interest rate hikes next month. In a report to clients, Hazius said that Walsh has clearly stated that his main concern is to ensure that underlying inflation falls clearly and fast enough to the Federal Reserve's 2% target, and warned that more work needs to be done if requirements are not met.

Or trigger a rotation of trillions of yen in capital! The sharp rise in yield rekindled appeal, and calls for GPIF to increase its Japanese bond holdings gradually began. As yields on Japanese treasury bonds have risen sharply, analysts pointed out that the Japanese Government Pension Investment Fund (GPIF), one of the world's largest pension funds, may have good reason to consider raising the domestic bond allocation target from the current 25% in order to seek higher returns. Due to the extremely large size of the fund, GPIF's asset allocation decisions have attracted the attention of global market participants. By the end of June, the fund managed assets of about 318 trillion yen (about 2 trillion US dollars). This means that theoretically, every 1 percentage point change in the allocation ratio could trigger capital flows of more than 3 trillion yen.

Goldman Sachs: The trillion-dollar computing power boom fueled the semiconductor bull market, and global AI capital expenditure entered the trillion dollar era. Based on the AI computing power industry chain and Nvidia's performance, and the positive signal of AI computing power demand released at the latest Hot Chips conference, the research department from Wall Street financial giant Goldman Sachs recently restored the “capital expenditure of American hyperscale cloud service providers (i.e. hyperscalers)” well-known in the market into a true “global AI investment.” Goldman Sachs's previous compilation of $794 billion not only omits private AI companies, Asian companies, and non-US projects, but also incorporates traditional capital expenditure that is not entirely used for AI; Goldman Sachs's latest forecast for 2026 will be about 1 trillion US dollars of global AI investment, of which about 581 billion US dollars will actually occur in the US. Goldman Sachs's latest estimates also show that the cumulative global AI investment since 2022 is expected to reach a record $1.8 trillion by the end of 2026, and the leading indicators are still at the high end of the range since 2022, which means that no recent capital expenditure inflection point has occurred.

Individual stock news

SK Hynix (SKHY.US) went to Japan to find the next bastion of production capacity, and Wall Street continues to bet on an “AI storage shortage.” SK Hynix (SKHY.US), one of the world's largest memory chip manufacturers, is evaluating the feasibility of building a joint venture storage wafer manufacturing plant in Japan, and has listed sufficient, low-cost electricity and water resources as key site selection conditions. The potential Japanese project will complement South Korea's 54 trillion won production expansion plan and the advanced packaging base in Indiana, USA, while taking advantage of Japan's advantages in high-end semiconductor equipment, semiconductor raw materials, large customers, government subsidies, and the NAND flash memory leader Kioxia industry chain. This move is more like SK Hynix's global production capacity upgrade in the face of a serious shortage of memory chips, and capacity allocation after comprehensive cost and geographical risks. Instead of AI computing power fundamentals showing signs of oversupply or weakening demand.

Amazon (AMZN.US) AWS expands government AI circuit! Big models such as OpenAI, Meta, and Anthropic collectively landed on GovCloud. Amazon Web Services (AWS), a cloud business unit under Amazon, recently announced that it has expanded the availability of AI models within the AWS GovCloud (US) region to provide government agencies with the ability to access large third-party models through the Amazon Bedrock platform, including mainstream models such as Anthropic, Meta, OpenAI, xAI, and Nvidia, while supporting Amazon's self-developed Nova series models. All services run in an isolated cloud environment that meets compliance requirements.

The $4.3 billion “Eye of the Dark Universe” took off, and NASA's space order ignited the growth ambition of SpaceX (SPCX.US) space exploration. The Falcon Heavy Rocket under SpaceX, an AI and space exploration leader founded and led by Musk, successfully launched NASA's Roman telescope, further verifying SpaceX's reliability, heavy carrying capacity, and long-term order barriers for the government's flagship missions, and adding credit to it to carry out more complex space orbit infrastructure projects. However, $4.3 billion is the overall project value of the Roman space telescope project, not direct revenue data from the launch business obtained by SpaceX. Roman will fly about 1 million miles from Earth to study dark matter, dark energy, and exoplanets at about 1,000 times the speed of Hubble.

Tesla (TSLA.US) launched an affordable version of the Model 3 in Hong Kong and Macau, and the starting price was as low as 26,000 US dollars. Tesla has launched a rear-wheel drive version of the Model 3 with a lower price and simplified configuration in Hong Kong, China, and Macau, China. The starting price is HK$205,000 (about US$26,000) and MOP 252,000 (US$31,000), respectively. According to reports, the price of the new model in Hong Kong has been reduced by 8.5% compared to the previous entry-level model. According to reports, this version has streamlined or downgraded some interior and exterior configurations, including interior textile fabrics, audio, wheels, etc.

Key economic data and event forecasts

Beijing time at 9:45 US August Chicago PMI