US stock outlook | Futures of the three major stock indexes rose sharply, oil prices fell, and most technology stocks rose before the market
Pre-market market trends
1. On September 17 (Thursday), the futures of the three major US stock indexes rose sharply before the US stock market. As of press release, Dow futures were up 0.82%, S&P 500 futures were up 0.83%, and NASDAQ futures were up 1.09%.
2. As of press release, the German DAX index rose 0.52%, the UK FTSE 100 index rose 0.53%, the French CAC40 index rose 0.33%, and the European Stoxx 50 index rose 0.67%.
3. As of press release, WTI crude oil fell 1.82% to $100.57 per barrel. Brent crude oil fell 2.48% to $103.21 per barrel.
Market news
Wall Street changed after the Federal Reserve raised interest rates by all votes: Goldman Sachs is betting for October, and Bank of America is betting for October+December. Federal Reserve Chairman Walsh presided over the first rate hike in three years on Wednesday. “Federal Reserve microphone” Nick Timiraos pointed out that what is more worthy of market attention is that he did not describe this action as a one-time adjustment, but rather sent a signal that the policy may continue to be tightened. The market reacted quickly. After the meeting, Michael Gapon, the chief US economist at Morgan Stanley, adjusted the forecast to a total of three rate hikes — including this one on Wednesday — higher than the two previously anticipated. Goldman Sachs now expects the Federal Reserve to raise interest rates by another 25 basis points in October, becoming one of the first major Wall Street banks to predict that the Fed will continue to raise interest rates. This judgment reverses Goldman Sachs's previous views. Bank of America Global Research is another major institution that expects the Federal Reserve to take a more aggressive path of austerity. It expects the Federal Reserve to raise interest rates in October and December, respectively.
Walsh shines brightly, and the bond market believes: the US bond yield curve has leveled off, and interest rate hike bets are heating up all over the board. The bond market is unleashing growing confidence that Federal Reserve Chairman Kevin Walsh will deliver on his promise to curb inflation — the rate has now surpassed policymakers' target levels for five consecutive years. After the Federal Reserve raised borrowing costs for the first time since 2023 and predicted further tightening of monetary policy on Wednesday, traders now expect to raise interest rates three more times by the middle of next year, one more than expected before the decision was announced. Interest rate swaps suggest that the first rate hike could arrive as early as next month. This repricing pushed two-year US Treasury yields to their highest level since 2024, reflecting the market's belief that the Federal Reserve is willing to implement meaningful austerity policies to slow the economy and reduce inflation. The two-year US Treasury yield — the period most sensitive to the Fed's expectations — climbed to 4.74% from 4.6% before the Fed's statement. Long-term treasury bonds, which are more sensitive to inflation, have lagged behind in growth — a sign that investors expect officials to take action to control price pressure. Meanwhile, long-term inflation expectations have declined sharply.
Most Wall Street leader Adney “defected”: after raising expectations a month later, the S&P 500 target was lowered to 7,900 points, warning of rising downside risks to the economy. Ed Yardeni (Ed Yardeni), one of Wall Street's biggest bulls, lowered the S&P 500 index's year-end target only a month after raising expectations, citing a rise in downside risks in the next three to six months. The president and chief investment strategist of Yardeni Research Inc. lowered S&P's target for the end of the year 500 from 8,400 points to 7,900 points, while 8,400 points was still Wall Street's highest estimate as of last month. The new target is midstream among the more than 20 strategists surveyed. Adney is the second strategist to lower S&P 500 expectations this week. Adney still expects “the economy to grow without recession by the end of this decade.” He added that the previous 8,400 point year-end forecast is now the target of the S&P 500 in mid-2027. Its 2027 earnings target of $425 per share remains unchanged.
Supply concerns have been magnified! Saudi Arabia starts “ship-to-ship” oil transportation, with 4 million barrels of crude oil flowing out every day. Saudi Arabia is supplying more crude oil to Asian refineries through ship-to-ship transfers off the port of Sohar in Oman after the damage to the East-West oil pipeline and the suspension of crude oil shipments at Yanbu Port along the Red Sea coast. Alternative export arrangements have allayed market concerns about a further contraction in Saudi supply. The new supply directly changed the market's previous judgment on the sharp decline in Saudi exports. Hiroyuki Kikukawa, chief investment strategist at Nissan Securities, said that the news that Saudi Arabia is increasing crude oil transportation through Oman has eased concerns about tight supply. UBS analyst Giovanni Staunovo also believes that the resumption of more exports from the Persian Gulf side has lowered the market's expectations for further expansion of supply disruptions. International oil prices continued the previous trading day's decline on Thursday and fell further from the roughly four-month high hit earlier this week.
Individual stock news
US technology stocks generally rose before the market. Before the US stock market on Thursday, as of press release, Intel (INTC.US) rose more than 3%, SK Hynix (SKHY.US), SanDisk (SNDK.US), Western Digital (WDC.US), Seagate (STX.US), AMD (AMD.US), Oracle (ORCL.US), Qualcomm (QCOM.US) rose more than 2%, Asmack (ASML.US), SpaceX (SPCX.US), and Micron (MU.US) rose nearly 2%, Broadcom (AVGO.US) Nvidia ( NVDA.US), TSM.US (TSM.US), Tesla (TSLA.US), Amazon (AMZN.US), etc. rose more than 1%. In terms of optical communications stocks, Nokia (NOK.US) and Credo Technology (CRDO.US) rose more than 4%, Coherent (COHR.US), Corning (GLW.US), and Astera Labs (ALAB.US) rose more than 3%, MRVL.US (MRVL.US) rose nearly 3%, and Lumentum (LITE.US) rose more than 2%.
With the 50 billion target falling short, can CRM.US (CRM.US) draw another $63 billion “big cake” to convince Wall Street that the “AI replacement theory” has been exaggerated. Safrus gave a long-term sales outlook that exceeded analysts' expectations, showing investors that in the face of competition brought about by AI tools, the software company can still drive revenue growth. Robin Washington, the company's chief operating officer and chief financial officer, said the company's sales are expected to reach $63 billion in the fiscal year ending January 2030. This outlook includes revenue from Seflex's acquisition of Informatica, which was completed in November last year. According to the aggregated data, analysts estimated this figure at an average of 61.4 billion US dollars. However, a historical fact that cannot be circumvented is that the company's 2022 Investor Day revenue target of $50 billion for fiscal year 2026 ultimately fell through (actually, $41.5 billion). Wall Street generally said that the key to whether the $63 billion “military warrant” can be fulfilled depends on whether subscription revenue can return to double-digit growth in the next 12-18 months, and when Agentforce's subscription volume will be converted into actual revenue and profit under GAAP.
Nebius (NBIS.US) price increase across the board: GPU leasing increased by up to 21%. Nebius raised the price of computing power services. According to a notice issued by the company to customers (retweeted by Reddit and X users), Nebius has raised the prices of several on-demand computing resources since October 1. Among them, the latest Nvidia GPU increased the most. Under the new price, the H100 rose from $3.85 per GPU hour to $4.50 per GPU hour, an increase of about 17%; the H200 rose from $4.50 to $5.40, an increase of 20%; the B200 rose from $7.15 to $8.50, an increase of nearly 19%; the Nvidia B300 definitely saw the biggest increase, from $7.85 to $9.50 per GPU hour, an increase of about 21%. This price increase comes at a time when Nebius continues to expand its AI infrastructure globally. In July, the company received approximately $775 million in debt financing, supported by deployed GPU infrastructure and contracted customer cash flow. As of press release, Nebius's US stocks rose more than 9% in the premarket on Thursday, and its new cloud company IREN (IREN.US) and CoreWeave (CRWV.US) rose nearly 5% and 2%, respectively.
Add fuel to Wall Street's bullish narrative! GE Vernova (GEV.US) order reserves may exceed $200 billion early next year, and the CEO says demand is “strong and enduring.” Scott Strazick, CEO of power equipment giant GE Vernova, said that the company's order reserves are expected to exceed 200 billion US dollars in early 2027, which is earlier than Wall Street's previous expectations. Strazik said that GE Vernova's order reserves had reached 176 billion US dollars at the end of the second quarter. Based on strong orders expected in the third quarter, the company is expected to hit $200 billion “very early in 2027.” For investors who have recently been upset by AI trading pullbacks, this statement comes at the right time. As of press release, GE Vernova's US stock rose more than 3% before the market on Thursday.
Selling electricity and “giving shares”: Generac (GNRC.US) won Amazon's $2.4 billion generator order. Amazon has obtained warrants to purchase shares of backup power provider Generac worth up to $340 million. As part of the agreement, Generac stated in a securities filing that the company issued warrants to Amazon, which could purchase up to 1.69 million shares of the company at a price of 200.93 US dollars per share, with a total investment of up to 8 billion US dollars. According to the filing, Generac will supply backup generator sets for Amazon's data centers. The first deliveries are expected in 2027 and 2028, totaling 2.4 billion US dollars. As of press release, US stocks surged more than 29% before the market on Thursday.
Key economic data and event forecasts
Number of jobless claims in the US for the week ending September 12 at 20:30 Beijing time (10,000)