Overnight US stocks | Concerns about AI performance resurface, NASDAQ falls more than 1%, Micron Technology (MU.US) falls more than 4%

The Zhitong Finance App learned that on Thursday, the three major indices had mixed ups and downs, and the NASDAQ fell more than 1%. According to the news, OpenAI's annualized revenue was 20 billion US dollars lower than previously reported, and technology stocks fell under pressure. St. Louis Federal Reserve Chairman Mussalem said that the Federal Reserve needs to raise interest rates again to push inflation back to the target level of 2%.

[US Stocks] At the close, the Dow Jones index rose 52.61 points, or 0.10%, to 51232.48 points; the S&P 500 index fell 36.35 points, or 0.47%, to 7765.42 points; the Nasdaq Composite Index fell 345.35 points, or 1.25%, to 27193.34 points. Nvidia (NVDA.US) fell nearly 3%, SpaceX (SPCX.US), Micron (MU.US), and SK Hynix (SKHY.US) fell more than 4%, and Oracle (ORCL.US) and Intel (INTC.US) fell more than 5%. The Nasdaq China Golden Dragon Index fell 0.62%.

[European stocks] The German DAX30 index fell 303.00 points, or 1.21%, to 24801.36 points; the British FTSE 100 index fell 23.16 points, or 0.22%, to 10435.34 points; the French CAC40 index fell 39.52 points, or 0.51%, to 7729.69 points; the European Stoxx 50 index fell 55.94 points, or 0.91%, to 6124.35 points; Spain's IBEX35 index fell 194.89 points, or 1.02%, to report 18923.11 points; Italy's FTSE MIB index fell 693.75 points, or 1.39%, to 49278.50 points.

[Asia Pacific Stock Market] The Nikkei 225 Index fell 1.42%, South Korea's KOSPI Index fell 2.62%, and the Indonesian Composite Index fell 1.88%.

[Foreign Exchange] The US dollar index, which measures the US dollar against the six major currencies, fell 0.1% on the same day and closed at 102.138 at the end of the foreign exchange market. As of the end of the exchange market in New York, 1 euro was worth 1.1209 US dollars, up from 1.1,199 US dollars on the previous trading day; 1 pound was worth 1.3225 US dollars, up from 1.3219 US dollars on the previous trading day. 1 US dollar was worth 157.86 yen, lower than 157.96 yen on the previous trading day; 1 US dollar was worth 0.8316 Swiss franc, lower than 0.8330 Swiss franc on the previous trading day; 1 US dollar was worth 1.4224 Canadian dollars, lower than 1.4256 Canadian dollars on the previous trading day; 1 US dollar was worth 9.9757 SEK, lower than 9.9992 on the previous trading day.

[Cryptocurrency] Bitcoin once fell below the $81,000 mark to $80311.94; Ethereum fell 3.5% to $2,479.

[Precious Metals] Spot gold reported $4133.67 per ounce; spot silver reported $59.187 per ounce.

[Crude oil] Light crude oil futures for November delivery on the New York Mercantile Exchange rose $3.21, or 3.64%, to close at $91.49 a barrel; London Brent crude oil futures for December delivery rose $4.08, or 4.07%, to close at $104.28 a barrel.

[Macro News]

Federal Reserve Mussalem: Further rate hikes may be needed in the next 6 to 9 months. St. Louis Federal Reserve Chairman Mussalem said that the Federal Reserve needs to raise interest rates again to push inflation back to the target level of 2%. He said that in order to achieve the inflation target within a “timely” period, monetary policy needs to be further tightened. Mussalem said that if “timely” means about 18 months, then interest rates may need to be raised further in due time within the next 6 to 9 months. He said that current inflation is still the main problem facing the US economy, but economic growth is strong and the job market remains stable, and the Federal Reserve may reduce inflation without significantly harming employment. When asked if interest rates should be raised during the October 27-28 interest rate meeting, Mussalem said that he remains open and has not yet predicted the outcome of the meeting, but the inflation situation requires policy makers to continue to consider further policy tightening. Mussalem said that although US bond yields have risen markedly, the financial environment is still relaxed and supports economic growth. He said that the rise in yield does not mean that investors have lost confidence in the Federal Reserve, but rather reflects the market's expectation that real interest rates will rise and capital competition will intensify in a strong economic environment.

The US estimates the total federal budget deficit for the 2026 fiscal year to be 2 trillion US dollars. On October 8, local time, according to estimates from the US Congressional Budget Office, the total US federal budget deficit for fiscal year 2026 was 2 trillion US dollars, which is 218 billion US dollars higher than the deficit for fiscal year 2025. According to estimates, during the 2026 fiscal year, revenue will increase by $169 billion (3% increase), and spending will increase by about $386 billion (6% increase). The increase in spending comes mainly from net interest on debt, major welfare programs, defense, and education; revenue growth is mainly driven by increases in personal income tax and payroll tax revenue.

OpenAI's annualized revenue is $20 billion lower than previously reported. According to reports, OpenAI recently revealed to investors that by the end of September, its annualized revenue was close to 50 billion US dollars, which is significantly lower than the 70 billion US dollars reported by the newspaper and other media at the end of last month. According to people familiar with the matter, the difference is due to investors trying to directly compare the annualized revenue of OpenAI with competitor Anthropic, but the two companies use a different statistical caliber: Anthropic will include revenue from sales revenue generated by cloud partners such as AWS and Google Cloud, and OpenAI did not use this method. Previously, investors adjusted OpenAI's revenue caliber to calculate that its annualized revenue reached 40 billion US dollars in August, and then calculated 70 billion US dollars based on information disclosed by the company to investors about a revenue increase of more than 70%. OpenAI declined to comment.

Interest rates on 30-year US mortgages rose to 7.4%, hitting a three-year high. According to data from Fannie Mae, the average interest rate for 30-year fixed mortgages in the US rose to 7.4% from 7.28% last week, rising for the seventh week. This is the first time in three years that there has been such a long continuous rise. The interest rate level hit a new high since November 2023, and 6.3% in the same period last year. Higher housing prices are compounded by rising borrowing costs, further increasing the pressure on America's housing burden. Based on a 20% down payment, buying a $500,000 home at current interest rates would increase the monthly debt service amount by about $172 compared to four weeks ago, and an increase of about $345 when buying a $1 million home. As fixed interest rates continued to rise, more borrowers switched to variable interest rate loans with lower initial interest rates. The share of adjustable interest rate mortgages rose to 12.2% in early October, reaching a four-year high.

ING: The ECB's interest rate hike in September was widely supported, but it is unlikely that it will raise interest rates again in October. Dutch International Group (ING) economist Carsten Brzeski said in a report that the minutes of the ECB's September monetary policy meeting showed that the decision to raise interest rates received widespread support for that month. However, Brzeski pointed out that discussions within the meeting were actually more balanced than what ECB President Lagarde suggested in his post-meeting speech, which means it is unlikely that the ECB will raise interest rates again in October. Some officials believe that the duration of the energy shock may be shorter than previously assumed, while others questioned the claim that the European economy has shown resilience to the energy shock. Meanwhile, bond yields continue to rise, further strengthening the view of some officials that there is no need to continue to raise interest rates. Brzeski added: “As the bond market completes the work of tightening the financial environment for the ECB, the will of some officials to continue to raise interest rates may not be as strong as during the September meeting.”

[Individual Stock News]

SpaceX's acquisition of low-band spectrum targets US wireless operators. SpaceX (SPCX.US) announced on Thursday that it has reached an agreement to acquire a low band spectrum license portfolio covering the entire US, which will allow it to compete directly with traditional wireless communication giants across the US. While Starlink Mobile's existing global 2 GHz mid-band spectrum will provide high bandwidth capacity, this new batch of spectrum will allow its signal to penetrate obstructions. The move hastened Musk's ambition to bypass traditional wireless infrastructure and provide cellular connectivity directly from Earth orbit to smartphones. The deal involves the acquisition of 100% of the US 800 MHz spectrum portfolio held by private equity firm Grain Management, which is still subject to regulatory approval from the US Federal Communications Commission (FCC). Additionally, the FCC approved Starlink Mobile's second-generation satellite constellation application this week, authorizing SpaceX to launch 15,000 satellites optimized for the 2 GHz band worldwide. After the news was announced, American Telecom shares fell in after-hours trading, while SpaceX (SPCX.O) shares rose more than 1.7%.

Apple officially announced a new smart home product launch on October 13th. Apple (AAPL.US) announced that it will hold a new product launch event with the theme “Welcome Home” (Welcome Home) in New York on October 13, local time, to launch a variety of smart home devices, including a smart home hub with a square screen of about 6 inches, an upgraded Apple TV 4K set-top box, and a new HomePod mini speaker. All new products will support Apple's latest Siri artificial intelligence features. Among them, the smart home hub can recognize different family members through the built-in camera and voice, provide personalized content, and also integrate applications such as calendar, messages, photos, and FaceTime. In addition, Apple is cooperating with LG Electronics to develop accessories such as smart doorbells, thermostats, and indoor security cameras to further expand the smart home ecosystem.

[Major Bank Ratings]

UBS Group: Raising the target price for Chevron (CVX.US) from $220 to $235