Overnight US stocks | US and oil hit the biggest one-day gains in nearly two months, and the three major indices fell, Apple (AAPL.US) rose 3.5%

The Zhitong Finance App learned that on Thursday, US oil prices broke through $100 per barrel, and the three major indices continued to decline. PPI data further strengthened the market's expectations that the Federal Reserve will raise interest rates at next week's policy meeting, driving the decline in US Treasury bonds to expand. At the end of the session, the 10-year Treasury yield was around 4.945%, up 10 basis points on the same day.

[US stocks] At the close, the Dow fell 316.559 points, or 0.60%, to 52064.102 points; the S&P 500 index fell 44.660 points, or 0.58%, to 7591.700 points; the NASDAQ fell 171.615 points, or 0.65%, to 26081.725 points. Nvidia (NVDA.US) fell 2.2%, Intel (INTC.US) fell 5.5%, SK Hynix (SKHY.US) fell 5.2%, and Apple (AAPL.US) rose 3.5%. The Nasdaq China Golden Dragon Index closed up 0.66%.

[European stocks] The German DAX30 index fell 173.91 points, or 0.68%, to 25380.37 points; the British FTSE 100 index fell 60.07 points, or 0.56%, to 10609.99 points; the French CAC40 index fell 39.91 points, or 0.49%, to 8116.76 points; the Eurostock 50 index fell 39.91 points, or 0.63%, to 6271.65 points; Spain's IBEX35 index fell 17.42 points, or 0.09%, to report 19663.38 points; Italy's FTSE MIB index fell 34.74 points, or 0.07%, to 51840.50 points.

[Asian Stock Market] The Nikkei 225 Index rose 0.2%, and the Korea Composite Index fell 0.25%.

[US Dollar Index] The US dollar index, which measures the US dollar against six major currencies, rose 0.23% on the same day and closed at 99.048 at the end of the foreign exchange market. As of the end of the exchange market in New York, 1 euro was worth 1.1613 US dollars, lower than 1.1630 US dollars on the previous trading day; 1 pound was worth 1.3513 US dollars, lower than 1.3546 US dollars on the previous trading day. 1 US dollar was worth 154.32 yen, up from 153.60 yen on the previous trading day; 1 US dollar was worth 0.8129 Swiss franc, higher than 0.8103 Swiss franc on the previous trading day; 1 US dollar was worth 1.3830 Canadian dollars, higher than 1.3806 Canadian dollars on the previous trading day; 1 US dollar was worth 9.6782 SEK, up from 9.6009 on the previous trading day.

[Cryptocurrency] Bitcoin fell 0.95% to 77,161 yuan as of press release; Ethereum rose 0.4% to 2,459 US dollars.

[Crude oil] Light crude oil futures for October delivery on the New York Mercantile Exchange rose $6.43, or 6.69%, to close at $102.48 a barrel by the close of the day; London Brent crude oil futures for November delivery rose $6.42, or 6.34%, to close at $107.63 a barrel by the close of the day. Both benchmark crude oil prices hit their highest levels since May 19, and recorded their biggest one-day increase in nearly two months. According to the news, the Houthis took control of the Yemeni port of Muha on Thursday, or further threatened Red Sea shipping. Meanwhile, as attacks on oil tankers in the Gulf region have intensified in recent days, shipping through the Strait of Hormuz is still restricted. Masabni, head of business development at XS.com, said that the Houthis attack on Saudi energy facilities brought a new source of risk to the market and further expanded the scope of market concerns from Iran and the Strait of Hormuz. He said the threat is no longer limited to a single critical shipping channel, but could cause a chain disruption of regional export routes, oil production facilities, and other energy infrastructure.

[Precious Metals] Spot gold fell 1.92% to 4316.63 US dollars/ounce; spot silver reported 63.599 US dollars/ounce. Analyst Michael Boutros said that the US PPI data released earlier intensified market expectations for further monetary policy tightening. Currently, federal funds futures show that the probability that the Federal Reserve will raise interest rates next week is about 72%. The current focus of the market's attention is on the upcoming US CPI report. If the CPI data is higher than expected, it may reinforce these expectations, thereby boosting US Treasury yields and the US dollar exchange rate, and increasing downward pressure on gold. Conversely, if inflation data weakens, it could challenge the recent pricing mechanism and help stabilize the price of gold before the Federal Reserve meeting.

[Macro News]

US diesel prices hit $6 for the first time, adding new risks to US inflationary pressure. According to data from the price tracking agency GasBuddy, the national average price of US diesel broke through $6 per gallon for the first time on Thursday local time. The US-Iran war, as well as Ukraine's attack on Russian refineries, have squeezed the supply of diesel. Diesel is an important pillar of economic activity, providing fuel for trucks, trains, ships and heavy equipment that keep the supply chain running, and is also an important energy source for agricultural production. The rise in fuel prices has also become a difficult issue facing US President Trump and Republican lawmakers. They are trying to maintain the Republican Party's weak majority in the US Congress in the November midterm elections. GasBuddy analyst Patrick DeHaan said, “Every truck, every delivery, every package, every trip to buy groceries is now more expensive.” “Record diesel prices will likely reignite inflation upstream and downstream throughout the supply chain.” According to agency data, the average price of diesel in the US is about $2.30 higher than a year ago.

The US Treasury Department “picks three and four” for US bond repurchases rarely reaches the upper limit. In US Treasury Secretary Bezent's first scaled up treasury bond repurchase operation, the size of the long-term treasury bonds purchased fell short of investors' expectations, intensifying the sell-off wave, causing the yield on US Treasury bonds to a high level in the past few years. The US Treasury repurchased 5.187 billion US dollars of 10-20 year treasury bonds on Thursday, lower than the previously announced maximum repurchase scale of 6 billion US dollars. The 10-year US Treasury yield rose to its highest level since 2023 after this operation. Investors submitted bond sales offers totaling US$10.5 billion to the Ministry of Finance during this operation. Although the Ministry of Finance is not obligated to buy the maximum amount, this is the third time out of 53 long-term bond repurchase operations since the program was re-launched in 2024 that it chose not to buy up the maximum amount. TD Securities strategist Molly Brooks said, “This shows that the Treasury Department's choices are more strict than normal. If the Ministry of Finance hopes to meet market expectations and complete the full repurchase amount to reduce long-term interest rates, then future repurchase operations may need to accept even less attractive offers. At least, the previous precedent where the Ministry of Finance would buy back 100% of the maximum amount has been broken, which may help to re-diversify market expectations.”

After the PPI data was released, the probability that the Federal Reserve would raise interest rates in September rose to 70%. According to reports, the market has increased its bets on the Fed's interest rate hike at next week's meeting. The first key inflation report of the week released earlier showed that in the 12 months ending August, US producer prices rose 5.4%. Prior to the publication of this report, the market expected the probability that the Federal Reserve would raise interest rates by 25 basis points at the September 15-16 meeting was about 65%. According to the CME (CME) federal funds futures contract price, the market currently expects this probability to rise to about 70%.

[Individual Stock News]

It is alleged that Microsoft is losing business due to a shortage of computing power and will more than triple the size of the data center in the future. According to people familiar with the matter, Microsoft (MSFT.US) plans to drastically expand the data center scale. By 2032, the global data center capacity will exceed 38 gigawatts, which is more than three times the current 12 gigawatts. The plan aims to mitigate the shortage of computing power caused by the rapid growth of AI and cloud services in recent years. Previously, Microsoft had to reject some AI and cloud service businesses due to insufficient capacity. People familiar with the matter said that the roadmap includes data centers built and leased by Microsoft, but does not include computing power resources leased from “new cloud service providers” such as CoreWeave, and related plans may still be adjusted due to customer needs and changes in technology. Microsoft's capital expenditure reached 145 billion US dollars in the latest fiscal year, and analysts expect spending to continue to grow in the next few years. The report said that Microsoft previously suspended construction of some data centers, which limited the supply of computing power, and some customers turned to competitors. Documents show that Microsoft has restricted new cloud service subscriptions in some key regions in the US and Europe. Microsoft said it is speeding up data center construction.

Nvidia CEO Hwang In-hoon denied that AI infrastructure investment constituted revolving financing. According to reports, Nvidia (NVDA.US) CEO Huang Renxun responded to questions from the outside world about Nvidia's participation in financing arrangements for data center and artificial intelligence infrastructure projects at the Goldman Sachs conference. Faced with the question “Are these investments revolving?” Hwang In-hoon said, “I invested 1 dollar, and eventually got 100 dollars back. Is this a cycle?” He described the deal as a “very smart strategy” to help Nvidia establish distribution channels for its technical architecture. Huang Renxun said that Nvidia's financial support for data center projects and AI infrastructure is not a simple capital cycle, but rather to promote the application of its architecture in the market.