ADDX GO Market Morning Wrap - 30th Aug
Stock Market
On Friday Eastern Time, the three major U.S. indices closed lower, with the Nasdaq dropping over 1%, dragged down by tech stocks led by Nvidia.
(Intraday charts of the three major indices, source: TradingView)
By the close, the Dow Jones Industrial Average fell 0.20% to 45,544.88 points; the S&P 500 dropped 0.64% to 6,460.26 points; and the Nasdaq Composite declined 1.15% to 21,455.55 points.
Most major tech stocks fell, with Tesla, Nvidia, and AMD down over 3%, Intel down more than 2%, and Amazon, Meta, and Netflix down over 1%. Microsoft and Apple saw slight declines, while Google edged up, hitting a new high.
Insiders revealed that Alphabet’s Google will face a moderate EU antitrust fine in the coming weeks due to alleged anti-competitive behavior in its ad tech business.
Data released Friday showed U.S. PCE inflation rose 2.6% year-over-year in July and 0.2% month-over-month; core PCE rose 2.9% year-over-year and 0.3% month-over-month.
All four metrics met market expectations, though it’s worth noting that the core PCE annual rate increased by 0.1 percentage point from June, marking the highest level since February.
Ellen Zentner, Chief Economic Strategist at Morgan Stanley Wealth Management, said, “The Fed has opened the door to potential rate cuts, but whether it acts depends on whether a softening labor market is seen as a bigger risk than rising inflation.
Today’s PCE data met expectations, with focus remaining on the jobs market. A September cut still seems likely.”
Ross Mayfield, an investment strategist at Baird, noted that Friday’s pullback, following pressure before the PCE data release, reflects recent market performance.
The previous trading day saw the Dow and S&P 500 hit new closing highs, with the latter breaking 6,500 points for the first time.
Mayfield added, “The PCE data was fine, but some profit-taking after hitting records also contributed to the decline.”
Despite Friday’s drop, the major indices ended August with solid gains, with the Dow up over 3%, the S&P 500 up nearly 2%, and the Nasdaq up 1.6%.
U.S. stock markets will be closed Monday for Labor Day.
Global Hotspots
U.S. Appeals Court Rules Most Global Tariff Policies Illegal
On August 29 local time, a U.S. appeals court ruled that most of President Trump’s global tariff policies are illegal, stating he exceeded his authority in implementing them.
U.S. Treasury: $15.8 Trillion in Foreign Securities Held by Year-End 2024
The U.S. Treasury released preliminary data from its annual survey of U.S. holdings of foreign securities, showing a total value of approximately $15.8 trillion as of December 31, 2024.
Turkey Completely Cuts Trade with Israel
On August 29, Turkish Foreign Minister Hakan Fidan announced that Turkey has banned Israeli ships from its ports, prohibited Turkish vessels from docking at Israeli ports, closed its airspace to Israeli aircraft, and fully severed trade relations with Israel.
San Francisco Fed President: Rate Cut Likely Soon, Tariff Inflation Impact Temporary
On Friday local time (August 29), San Francisco Fed President Mary Daly said policymakers are poised to cut rates soon, adding that tariff-driven inflation pressure is likely temporary. The Fed began its rate-cut cycle in September last year, lowering rates by a total of 100 basis points over its last three meetings, bringing the federal funds rate target range to 4.25%-4.50%.
Trump Delivers on Promise! Cancels $679M Offshore Wind Funding
On Friday local time, the U.S. Department of Transportation announced the cancellation of $679 million in federal funds previously allocated to over a dozen infrastructure projects supporting offshore wind development. This move is seen as Trump’s latest effort to curb U.S. renewable energy growth.
Since his first day in office, Trump has targeted the wind industry, immediately halting new offshore wind lease projects, with his administration recently intensifying its offensive.
Company News
Tesla Launches New Model Y Performance Edition
Tesla released the new Model Y Performance edition for the European market to boost sales in the region. Though initially planned for Europe, it’s expected to expand to other markets soon.
The new Model Y Performance outperforms the base model in most aspects, with a 0-100 km/h acceleration of 3.5 seconds (vs. 4.8 seconds for the standard version), a range of 580 km (based on the more lenient WLTP standard), and a maximum power of 460 horsepower, far exceeding the rear-wheel-drive version’s 265 horsepower. It will launch in September with a price of approximately €62,990.
Google Faces ‘Light’ EU Antitrust Fine, Far Below Past Penalties
Insiders say the EU’s latest antitrust action against U.S. tech giant Google will conclude in the coming weeks with a modest fine. Boosted by this news, Google rose 0.6% on Friday, hitting a new intraday high. Having faced hefty EU fines before, a lighter penalty would be a positive for the company.
The EU Commission’s decision stems from a four-year investigation initiated by a complaint from the European Publishers Council, with formal charges filed in 2023 alleging Google favored its own ad platforms and squeezed competitors.
Fed Finalizes New Capital Rules for Major Banks, Morgan Stanley Seeks Reconsideration
The Federal Reserve announced on Friday that it has finalized new capital requirements for the largest U.S. banks following June’s stress tests, but noted that Morgan Stanley (MS.N) is seeking a reassessment of its upcoming capital levels.
The new requirements take effect October 1; if the Fed adopts a proposed averaging of two-year stress test results, the requirements could be updated. Based on annual financial stress tests for major banks, the Fed evaluates performance under hypothetical economic scenarios to set capital buffers. Morgan Stanley has requested a review, with a decision due by late September.
Alibaba: $54B AI and Cloud Capex in Past Quarter
Alibaba executives announced major investments to seize opportunities in AI and daily service consumption. The company spent 38.6 billion yuan ($5.4 billion) on AI and cloud infrastructure in the past quarter, with over 100 billion yuan invested in AI infrastructure and product development across the last four quarters. Buoyed by positive AI news, Alibaba’s stock surged nearly 13% on Friday.
Forex & Commodities
International crude futures settled lower.
WTI October crude futures fell 0.91% to $64.01/barrel, up 0.55% for the week; Brent October crude futures dropped 0.73% to $68.12/barrel, up 0.57% for the week.
COMEX gold futures rose 1.2% to $3,516.10/oz, up 2.86% for the week and 5.2% for August; COMEX silver futures gained 2.64% to $40.75/oz, up over 4% for the week and 11% for August.
The U.S. Dollar Index fell 0.02% to 97.85.
Key Events
Inflation Data Boosts Rate-Cut Hopes, Gold Poised for Best Month in 4
Driven by U.S. inflation data reinforcing expectations of a Fed rate cut next month, gold prices rose again on Friday, set to mark their best monthly performance since April. During U.S. trading hours, spot gold climbed 0.85% to $3,445/oz, with an August gain of 4.7%.
COMEX gold futures rose over 1% to $3,511/oz, nearing an all-time high. Commerzbank noted in a report, “Uncertainty over Fed independence is driving funds into gold ETFs, with nearly 15 tons added in the past two days. However, after breaking above $3,400, upside potential seems limited.”
Cryptocurrency
Bitcoin down 3.75% to $108,301.
Ethereum (ETH-USD) down 3.38% to $4,352.
XRP (XRP-USD) down 4.95%, BNB (BNB-USD) up 1.65%, Solana (SOL-USD) up 5.02%.
Dogecoin (DOGE-USD) down 4.61%, Cardano (ADA-USD) down 3.61%.
Key Events
Tom Lee: Ethereum May Be Top Investment Opportunity of Next Decade
Tom Lee, Chairman of Bitmine Immersion Technologies (BMNR.US), posted that “Ethereum (ETH) could be one of the most important macro investment opportunities of the next decade, due to: Wall Street rearchitecting finance on blockchain, akin to the 1971 Bretton Woods collapse; stablecoins as the start of a broader tokenization trend; and the rise of intelligent AI driving token economy demand, creating new blockchain use cases.
This shift will positively transform the U.S. financial sector and bolster Ethereum. Meanwhile, Bitcoin (BTC) retains its status as the premier store of value, with both playing distinct yet equally vital roles in the future financial system.”