US stock outlook | Futures of the three major stock indexes fell sharply, oil rose above $104, strengthened the dollar, and US bond yields hit a multi-year high
Pre-market market trends
1. On September 24 (Thursday), the futures of the three major US stock indexes fell sharply before the US stock market. As of press release, Dow futures were down 0.42%, S&P 500 futures were down 0.63%, and NASDAQ futures were down 1.08%.
2. As of press release, the German DAX index fell 0.36%, the UK FTSE 100 index rose 0.04%, the French CAC40 index fell 0.31%, and the European Stoxx 50 index fell 0.23%.
3. As of press release, WTI crude oil rose 1.62% to $93.65 per barrel. Brent crude rose 1.78% to $104.91 per barrel.
Market news
Ministry of Commerce: The eighth round of economic and trade negotiations between China and the US reached a number of agreements. He Yadong explained that recently, the economic and trade teams of China and the US held the eighth round of economic and trade negotiations in the US. Guided by the important consensus of the heads of state of the two countries, and upholding the principles of mutual respect, peaceful coexistence, and win-win cooperation, the two sides have had candid, in-depth and constructive exchanges on economic and trade issues of common concern to both sides, such as implementing existing consensus on economic and trade negotiations, equal tax reduction arrangements, the establishment of trade councils and investment councils, and the extension of the Kuala Lumpur joint arrangement for economic and trade negotiations, and reached many agreements. Vice Premier He Lifeng and Minister of Finance Bezent held the first conversation on AI under the Sino-US economic and trade negotiation mechanism as the respective leaders of China and the US. Next, China will maintain close communication with the US on follow-up work under the Sino-US economic and trade consultation mechanism.
Gold is under pressure as the dollar strengthens and US bond yields rise to multi-year highs. On Thursday, as the market anticipated that the Federal Reserve might raise interest rates further, the US dollar strengthened and US bond yields rose to multi-year highs. Affected by this, the overall performance of gold prices was lackluster. Mitsubishi UFJ analysts said, “Federal Reserve officials also maintain hawkish positions, and Governor Barr said further policy tightening may be necessary. With the market's current pricing and at least three interest rate hikes before April, high yields and continued energy-driven inflation are still major headwinds facing gold.” According to the CME FedWatch tool, traders expect the probability that the Fed will raise interest rates again in October is close to 70%, up from 50% a week ago.
Goldman Sachs Asset Management: The Federal Reserve is unlikely to enter a continuous cycle of interest rate hikes. Goldman Sachs Asset Management said in a report that it is still not expected that the Federal Reserve will enter a continuous cycle of interest rate hikes. “We believe tariffs and energy-related price pressures may subside, the economy shows little sign of overheating, and inflation expectations remain anchored,” the agency said. The bitmap of the Federal Reserve's meeting last week shows that interest rates will be raised once more this year. According to LSEG data, money market pricing shows that the Federal Reserve will raise interest rates by a total of 37 basis points during the remaining two meetings of this year.
The chairman of the New York Federal Reserve said there is still a lot of work to fight inflation, and mentioned that AI demand is driving up the risk of inflation. New York Federal Reserve Chairman Williams said that in view of high energy prices and demand driven by AI investment, there is still a lot of work to be done to deal with inflation. Williams pointed out that despite facing major shocks, the US economy has shown remarkable resilience, and the labor market is also stable. However, he also mentioned ongoing inflation risks stemming from the US-Iran conflict and strong demand from AI. Williams said that this is the task of the Federal Reserve. There is still a lot of work to be done, and the inflation rate has been higher than the target level for 5 consecutive years.
Oil prices have risen again, and tension in the Middle East has intensified. Brent crude rose above 106 US dollars per barrel on Thursday, overshadowing prospects for a diplomatic settlement of the conflict due to heightened tension in the Middle East. Iran's Supreme Leader's military adviser Yahya Rahim Safawi warned that if the US or Israel launch another attack, the conflict could expand from the Persian Gulf, the Strait of Hormuz, and the Red Sea to the Indian Ocean. His remarks dampened the optimism surrounding discussions between the US and Iran in the margins of the UN General Assembly. Iranian President Masood Pezzahizyan said Tehran is ready to resume negotiations aimed at ending the conflict, but will not respond to threats. He also said that while US sanctions and blockades still exist, Iran will restrict freedom of navigation in the Strait of Hormuz.
International Finance Association: Global debt increased by 10 trillion US dollars in the first half of the year, and the total size exceeded 365 trillion US dollars. According to data from the International Finance Association, global debt surged by 10 trillion US dollars in the first half of this year, and the total size exceeded 365 trillion US dollars. Deficits and interest pressure surged in developed economies such as the US, Japan, and Europe. Interest expenses last year exceeded 3.3 trillion US dollars, exceeding individual global investments in defense, AI, and clean energy. The International Finance Association warns that the debt issue has evolved into a political issue, spawning “a vicious cycle between the election cycle and short-term emergency policies; as the marginal utility of new debt diminishes, long-term fiscal vulnerability builds up.” The report added: “As the benchmark interest rate rises, interest expenses will surge significantly; and the structural pressure brought about by health care and public pension spending remains largely unaddressed.”
US Energy Secretary Wright told oil companies to prepare for restrictions on diesel exports, but said that a comprehensive ban was not taken into consideration. US Secretary of Energy Chris Wright told oil industry executives that in view of the increasingly intense discussions within the Trump administration over restrictions on diesel exports, preparations should be made for the possibility of such a measure. People familiar with the matter said that Wright conveyed this message to business executives by phone on Tuesday evening, just after Trump said he had urged government officials to consider imposing restrictions on diesel exports for several hours. Discussions continued on Wednesday over restrictions on diesel exports, but no final decision has yet been made. Trump's core advisors disagree on this, while oil company executives warned the White House that any ban would eventually cause global prices to rise.
Individual stock news
Google (GOOGL.US) is about to release the flagship Gemini 4 AI model. According to reports, Kavukcuoglu, head of Google's DeepMind division, said on Wednesday that Google is about to release its latest flagship model, Gemini 4. Kavukcuoglu said Gemini 4 is in the early stages of “post-training” development, that is, the basic AI model is being fine-tuned. He said he hoped the model would be released “well before” the end of this year. “Our intention is to release an early post-training result as soon as possible because we have seen the results and are excited,” he said. Google will then “continue with fast-paced iterations.”
Meta (META.US) is fully betting on the Muse AI smart device, using VR glasses, smart glasses, and Charm to build an all-scene entrance. On September 23, local time, Meta held its annual Connect developer conference in Menlo Park, California. The whole press conference sent a very clear signal: Muse, a personal AI agent that has only been online for two weeks, will be the soul of all Meta hardware in the future. From lightweight VR glasses to smart glasses without a camera, to a mini terminal that can be attached to a keychain, Muse is embedded in every new product.
Heated debt risks trigger a wave of hedging! Nvidia (NVDA.US) CDS is among the most active products in the US market. After Nvidia issued $25 billion in corporate bonds in June of this year, derivatives associated with the artificial intelligence (AI) chip giant are now one of the most actively traded varieties in the US credit default swap (CDS) market as investors seek to hedge their debt exposure. Nicholas GoDec, head of fixed income tradable commodities and commodities at S&P Dow Jones Indices, quoted DTCC data as saying that in the past six months, market participants traded credit protection against $6.9 billion in debt, compared to only US$640 million in nominal transactions in the previous six months.
Microsoft (MSFT.US) is betting heavily on the Middle East! By 2030, it is planned to invest more than $10 billion to increase AI and cloud computing infrastructure. Microsoft said on Wednesday that it plans to invest more than $10 billion in capital and operating expenses in the Middle East by 2030 to expand its cloud computing and artificial intelligence (AI) infrastructure in Kuwait, Qatar, Saudi Arabia, and the United Arab Emirates. Microsoft said the investment will include expanding cloud computing and AI production capacity, and cooperating with governments and local agencies to carry out AI projects. Microsoft also plans to invest more than $400 million in undersea and terrestrial connectivity infrastructure in the region by 2030. The company said these expenses will expand network capacity and provide alternative transmission routes for data traffic in the event of an outage.
Qualcomm (QCOM.US) and Apple (AAPL.US) have renewed their global license agreement, which will take effect from 2027. Qualcomm announced that it has renewed its global license agreement with Apple, and the new agreement will take effect in April 2027. As the world's largest smartphone processor manufacturer, Qualcomm charges license fees based on the phone manufacturer's shipment volume. Qualcomm was under more pressure than expected due to the slump in the smartphone market. The company has outsourced chip production and said it is passing on some of the cost increases to customers. Qualcomm said the move will help the company gradually recover profit margins over time. Affected by the surge in demand for AI computing, the shortage of memory chips has intensified, forcing Qualcomm customers, including Apple, to cut mobile phone production.
According to reports, Amazon (AMZN.US) is betting $3 billion to plan India's instant retail boom. According to people familiar with the matter, Amazon plans to invest $3 billion by 2030 to expand its instant retail business in India. This will be the company's largest investment in this field to date. Previously, competitors had taken the lead by popularizing “minute-level” delivery services. Two people with direct knowledge of the plan said that Amazon plans to invest 1 billion US dollars in the instant retail business by the end of 2027 and an additional 2 billion US dollars by 2030. The company said that the total annualized product sales of its instant retail business in the past three months have exceeded 1 billion US dollars, “making it the fastest growing e-commerce business in Amazon's history in India.”
Key economic data and event forecasts
20:00 Beijing time: 2027 FOMC voting committee and Richmond Federal Reserve Chairman Barkin attended a fireside conversation at the Economy Club.
20:30 Beijing time: The number of US jobless claims for the week ending September 19, the US current account for the second quarter, and the monthly retail sales rate in Canada for July.
20:50 Beijing time: 2026 FOMC voting committee and Cleveland Federal Reserve Chairman Hamak delivered the opening speech at a conference.
22:00 Beijing time: Total annualized new home sales in the US after the August seasonal adjustment.
22:10 Beijing time: 2026 FOMC voting committee and Philadelphia Federal Reserve Chairman Paulson delivered a speech at the Fintech Conference.