Overnight US stocks | US bond yields fell from a high level, and the three major indices closed up, Micron Technology (MU.US) rose 3.03%

The Zhitong Finance App learned that on Thursday, the three major indices closed higher. US President Trump said that the handling of the Iran issue is progressing smoothly. He said that Iran is ready to give in, and we will win quite easily. We have already shipped a large amount of oil through the Strait of Hormuz, and oil prices will drop again.

US Treasury yields fell from multi-year highs, and the 10-year US Treasury yield once hit 5.344% intraday, the highest level since 2002. The 30-year Treasury yield also rose to a level not seen in 24 years. By the end of the trading session, yields began to fall back. The 10-year and 30-year yields fell by 5 and 3 basis points, respectively. The short-term decline in the yield curve was even more obvious, and the 2-year yield plummeted by 10 basis points.

[US Stocks] At the close, the Dow Jones index rose 20.75 points, or 0.04%, to 50926.80 points; the S&P 500 rose 15.12 points, or 0.20%, to 7666.66 points; and the Nasdaq Composite rose 10.53 points, or 0.04%, to 26871.60 points. Accenture (ACN.US) rose 15.99%, SK Hynix (SKHY.US) rose 5.08%, SanDisk (SNDK.US) rose 2.75%, IBM (IBM.US) rose 2.63%, Micron (MU.US) rose 3.03%; Broadcom (AVGO.US) fell 2.15%, and Google (GOOG.US) fell 1.7%. The Nasdaq China Dragon Index fell 1.03%, NetEase (NTES.US) fell 0.45%, and Alibaba (BABA.US) fell 0.09%.

[European stocks] The German DAX30 index fell 260.07 points, or 1.03%, to 24939.12 points; the UK FTSE 100 index fell 183.64 points, or 1.73%, to 10422.36 points; the French CAC40 index fell 129.20 points, or 1.62%, to 7835.31 points; the European Stoxx 50 index fell 97.47 points, or 1.55%, to 6171.55 points; Spain's IBEX35 index fell 442.06 points, or 2.28% , reported at 18984.14 points; Italy's FTSE MIB index fell 1153.48 points, or 2.25%, to 50218.50 points.

[Asia Pacific Stock Market] The Nikkei 225 Index rose 3.3%, Korea's KOSPI Index rose 1.95%, and the Indonesian Composite Index fell 1.02%.

[Foreign Exchange] The US dollar index, which measures the US dollar against the six major currencies, rose 0.64% on the same day and closed at 102.102 at the end of the foreign exchange market. As of the end of the exchange market in New York, 1 euro was worth 1.1235 US dollars, lower than 1.1332 US dollars on the previous trading day; 1 pound was worth 1.3190 US dollars, lower than 1.3262 US dollars on the previous trading day. 1 US dollar was worth 158.11 yen, up from 157.34 yen on the previous trading day; 1 US dollar was worth 0.8317 Swiss franc, lower than 0.8354 Swiss franc on the previous trading day; 1 US dollar was worth 1.4236 Canadian dollars, higher than 1.4229 Canadian dollars on the previous trading day; 1 US dollar was worth 10.0597 SEK, up from SEK 10.0103 on the previous trading day.

[Cryptocurrency] Bitcoin once surpassed 85,000 US dollars to 8,4718 US dollars as of press release; Ethereum rose 0.49% to 2,699 US dollars.

[Precious Metals] Spot gold reported US $4176.96 per ounce; spot silver reported US $60.98 per ounce.

[Crude oil] Light crude oil futures for November delivery on the New York Mercantile Exchange rose $2.45, or 2.71%, to close at $92.87 a barrel; London Brent crude oil futures for December delivery rose $4.28, or 4.37%, to close at $102.31 a barrel.

[Macro News]

Federal Reserve Vice Chairman Jefferson: Determining whether to raise interest rates further may take more time. Federal Reserve Vice Chairman Philip Jefferson said that inflation has been too high for too long, and there is still a risk that it will continue to be high, but policymakers may need more time to determine whether further interest rate increases are necessary. Any future policy adjustments should carefully assess data trends, changes in economic prospects, and risk balance. Jefferson pointed out that US economic activity and the labor market are still stable, but multiple shocks such as rising energy prices, AI investment boom, and tariffs are affecting the economy, and these factors cannot be viewed in isolation when formulating policies. He also said that since the September meeting, US bond yields for various maturities have risen further, indicating that investors are re-evaluating the macroeconomic situation; as more data is released, the Federal Reserve will continue to judge whether inflation can return to target levels quickly enough and what kind of monetary policy stance is most appropriate.

Kashkari: It is expected that the Federal Reserve will still need to raise interest rates, but it is uncertain whether to act in October. Minneapolis Federal Reserve Chairman Kashkari said that it is expected that the Federal Reserve will still need to raise interest rates further in order to curb the economy and inflation, but there is no strong opinion on whether to act at the October meeting. His previous prediction was to raise interest rates by another 25 basis points this year and another rate hike in 2027, but since the September meeting, the US economy has performed better than expected, and inflation is still too high; if the economy continues to be abnormally strong and inflation is more stubborn than expected, interest rates may rise to a higher level than currently anticipated. Kashkari believes that the current health of the labor market and good economic performance indicate that monetary policy “may not be particularly restrictive.” At the same time, he said that there are no systemic risks due to recent market fluctuations, and the US bond market can also absorb interest rate repricing normally.

The initial data on US claims fell to the lowest level since July, and the number of people renewing unemployment benefits fell to a three-year low. Initial jobless claims in the US fell slightly to their lowest level since July, while the number of renewed jobless claims fell to a three-year low, indicating that the labor market is still healthy. The number of renewed jobless claims fell by 11,000 to 1.7 million, the lowest since March 2023. The number of initial jobless claims has been hovering near historic lows over the past few months, indicating that companies are unwilling to cut employees at a time when economic activity is steady. At the same time, recruitment is more careful. The government's non-farm payrolls report due to be released on Friday is expected to show that the unemployment rate remained at 4.1% in September. The four-week moving average of initial jobless claims fell to a seven-week low of 200,000. Unadjusted for seasonality, initial jobless claims have declined in most states, including Hawaii, Georgia, and Texas.

Interest rates on 30-year US mortgages rose to 7.28%, the highest in nearly three years. According to Fannie Mae's data, the average interest rate for 30-year fixed mortgages in the US rose to 7.28% from 7.03% last week, rising for the sixth week in a row, hitting the highest level since November 2023, and 6.34% in the same period last year; interest rates on 15-year fixed mortgages also rose from 6.42% to 6.60%. At the end of February this year, interest rates on 30-year mortgages fell to 5.98%. Since then, they have risen by about 1.3 percentage points. Based on a 400,000 US dollar loan, the monthly repayment cost has increased by about 276 US dollars. According to the Associated Press, inflation expectations brought about by the sharp rise in oil prices have boosted US Treasury yields. The 10-year US Treasury yield has risen from 3.97% at the end of February to 5.27% in the Thursday session, further driving up mortgage costs. High interest rates continued to suppress the US real estate market. Existing home sales fell 2% month-on-month in August, equivalent to an annual rate of 3.98 million units, the lowest level in more than a year.

The US manufacturing sector continued to grow in September, and the PMI hit a new high of more than three years. Chris Williamson, chief business economist at S&P Global Markets Finance, said, “The growth rate of the US manufacturing industry accelerated again in September. The PMI was the highest level since May 2022. The surge in new orders prompted factories to drastically increase production and increase employment. The increasing backlog of orders and busier suppliers indicates that production capacity is already tight and companies are struggling to meet demand from consumers and the corporate sector. This is particularly true for investment and production of machinery and equipment, which in many cases is linked to an increase in AI related spending. Despite the disappointing decline in export orders, increased safety stocks also continued to support demand due to concerns about prices and the supply chain. Although this is an encouraging sign of further growth in manufacturing capacity in the coming months, signs that demand is exceeding supply also mean that inflationary pressure remains a key area of concern, particularly with high oil prices. Accelerated economic growth, increased recruitment, and higher price indicators will exacerbate market speculation that the Federal Reserve is about to raise interest rates further.”

[Individual Stock News]

According to reports, Nvidia and SoftBank have completed the final 20 billion US dollar investment in OpenAI. According to media reports citing people familiar with the matter and SoftBank statements, Nvidia (NVDA.US) and SoftBank have each completed the final $10 billion investment in OpenAI's last round of financing, fulfilling their respective investment commitments of 30 billion US dollars. OpenAI revealed in March of this year that the round of financing received an investment commitment of US$122 billion, with a post-investment valuation of US$852 billion; Amazon (AMZN.US) previously promised a maximum investment of 50 billion US dollars, and completed the full investment in July. With the end of the previous round of financing, OpenAI may pave the way for the next round of private equity financing. The target funding target is about US$30 billion, and the valuation may reach about US$1.4 trillion. SoftBank said that after completing the latest investment, its cumulative investment in OpenAI reached 64.6 billion US dollars, with a shareholding ratio of about 13%; part of the last investment came from SoftBank's 11.1 billion US dollar high-yield bond issuance completed at the end of September.

TSM.US is considering building a new campus in Texas to produce more AI chips. TSMC is considering building a new campus in Texas, which will add tens of billions of dollars to its multi-year expansion plans in the US chip manufacturing sector. People familiar with the matter said that TSMC is studying further construction of overseas facilities to meet the continued unabated demand for artificial intelligence hardware. So far this year, the North American business accounts for more than 75% of TSMC's wafer revenue, and AI chip designers such as Nvidia and AMD have brought huge orders for some of their most advanced technologies. TSMC's Deputy Co-Chief Operating Officer Hou Yongqing said last month that the AI boom has put pressure on TSMC's current production capacity. People familiar with the matter said that if TSMC finally decides to invest in Texas, the project will include multiple chip manufacturing plants, each costing at least 20 billion US dollars. However. These plans are still in their early stages. Texas's potential investment also depends on whether US lawmakers extend an advanced manufacturing tax credit due to expire at the end of this year.

Broadcom (AVGO.US) will provide up to $42 billion in loans to Anthropic to rent its chips. Anthropic's IPO prospectus shows that the company has established extensive partnerships with a few large tech companies. One of them stands out: Broadcom. The company's partnership with Anthropic covers computing power supply, equipment leasing and financing. As part of this complex partnership, the IPO filing revealed that Broadcom has agreed to lend Anthropic up to $42 billion to finance infrastructure expenses. In turn, Anthropic is expected to become Broadcom's largest customer in the core chip design business next year, and this spending model has been the focus of attention of Wall Street AI skeptics. As part of the financing arrangement, Broadcom may appoint a financing partner, and these debt instruments may be converted into Anthropic shares. Anthropic disclosed that Broadcom's dual role of both supplying hardware and acting as a financing partner would create a “potential conflict of interest” and could affect Anthropic's ability to obtain the computing power needed for its work.