ADDX GO Market Morning Wrap - 3rd Sep

Stock Market  

On Tuesday, all three major US stock indices closed lower.  

 

At the close, the Dow Jones Industrial Average fell 0.55% to 45,295.81 points; the S&P 500 dropped 0.69% to 6,415.54 points; and the Nasdaq Composite declined 0.82% to 21,279.63 points, with all three indices dropping over 1% intraday.  

 

Reports indicate that on August 29, the US Court of Appeals for the Federal Circuit ruled that the law invoked by President Trump to impose tariffs on multiple countries does not actually grant him the authority to levy those taxes.  

 

According to the ruling, the decision will not take effect until October 14, allowing the Trump administration time to appeal to the US Supreme Court.  

 

Analysts suggest that if Trump’s tariffs are ultimately deemed illegal, the US federal government may have to refund billions of dollars, further straining the country’s already tense fiscal situation, a prospect that has driven up Treasury yields.  

 

Scott Wren, Senior Global Market Strategist at Wells Fargo Investment Institute, said: “A reduction in tariff revenue means the US will need to issue more bonds to cover its spending deficit.”  

 

Intraday, the yield on the “global asset pricing anchor,” the 10-year US Treasury note, briefly surpassed 4.3%, while the 30-year Treasury yield reached a high of 4.99%, the highest since July 18, nearing the 5% threshold.  

 

Ross Mayfield, Investment Strategist at Baird, commented: “There’s no doubt that 5% is a resistance level for the 30-year Treasury yield. I think this will continue to be a thorn in the side for overvalued stocks.”  

 

Thomas Tzitzouris, Managing Director at Strategas, remarked: “Wake me up when September ends! We’ve always been concerned that September would be a volatile month, and the first day proved it’s as turbulent as advertised.”  

 

Meanwhile, long-term bond yields in the UK, Germany, and France rose to multi-year highs as investors reassess the long-term risks posed by Europe’s swelling public debt and political uncertainty.  

Global Hotspots  

Israeli PM: IDF Prepares for Gaza City Offensive  

 

Israeli Prime Minister Benjamin Netanyahu delivered a video address stating that the Israeli Defense Forces (IDF) are preparing for an offensive on Gaza City. Netanyahu claimed that Israel has not only targeted the Palestinian Islamic Resistance Movement (Hamas) but also weakened Hezbollah in Lebanon, the Syrian regime, and Yemen’s Houthi forces, describing these as long-standing threats to Israel.

 

He asserted that Israel is at a decisive stage in its conflict with Hamas and emphasized that the Gaza conflict must end completely in Gaza. The Israeli military announced on the same day that it is conducting a large-scale mobilization of reservists and preparing to expand military operations in Gaza City.  

 

US Judge Rules Trump’s Troop Deployment in LA Illegal  

 

A federal judge in California ruled on September 2 that President Trump’s deployment of National Guard and Marine units for law enforcement in the Los Angeles area was illegal. Judge Charles Breyer of the US District Court for the Northern District of California stated in his ruling that the Trump administration’s June deployment of troops to handle public protests violated the 1878 Posse Comitatus Act, which prohibits the use of US military forces for domestic law enforcement without congressional approval.

 

Breyer ordered the Trump administration to cease using California National Guard or other military forces deployed in the state for law enforcement. The ruling takes effect on September 12, allowing time for an appeal.  

 

US Judge Rules Google Need Not Sell Chrome  

 

A US judge released a ruling in an antitrust case against Google regarding its dominance in online search. The judge determined that Google is not required to sell Chrome, divest its Android operating system, or stop paying Apple and other companies to pre-install Google products.

 

However, the judge prohibited Google from entering into exclusive search contracts and mandated that it share information with competitors to address its online search monopoly.  

 

Goldman Predicts Record-High M&A Activity in 2026  

 

Tim Ingrassia, Co-Head of Global Mergers and Acquisitions at Goldman Sachs, stated that the bank predicts global deal volume will reach approximately $3.1 trillion this year, rising to $3.9 trillion next year. Citing Dealogic data, he noted this would surpass the $3.6 trillion in M&A activity recorded in 2021, excluding special purpose acquisition company (SPAC) transactions.

 

“If the current momentum continues, 2026 could see record-high M&A activity,” he said at Goldman’s 15th Annual European, Middle East, and Africa Credit and Leveraged Finance Conference in London.  

 

Nearly 600 Economists Sign Open Letter Supporting Cook, Urging Defense of Fed Independence  

 

Numerous prominent economists have rallied behind Federal Reserve Governor Lisa Cook, whom President Trump sought to remove over alleged mortgage fraud. Nearly 600 economists signed an open letter supporting Cook, arguing that the threshold for dismissing a Fed governor is high and that elected officials should avoid actions that erode the Fed’s independence.

 

The letter, published on Tuesday, was signed by Nobel laureates Claudia Goldin and Paul Romer, former Obama administration Council of Economic Advisers Chair Christina Romer, and Ohio State University professor Trevon Logan, who co-authored papers with Cook.  

 

Fed September Rate Cut Probability at 90.5%  

 

According to CME’s “FedWatch” tool: The probability of the Federal Reserve maintaining rates in September is 9.5%, with a 90.5% chance of a 25-basis-point cut. For October, the probability of maintaining rates is 4.3%, with a 46.3% chance of a cumulative 25-basis-point cut and a 49.3% chance of a cumulative 50-basis-point cut.  

Company News  

Apple Faces Further AI Talent Drain as Robotics Research Head Joins Meta  

 

Apple is experiencing another wave of AI talent loss, with its robotics AI research head having joined Meta Platforms. Meta confirmed on Tuesday that Jian Zhang has joined its robotics studio. Additionally, insiders revealed that three more AI researchers are leaving Apple’s large language model team, intensifying turmoil within the group.

 

Sources indicated that the latest round of departures over the past week includes John Peebles, Nan Du, and Zhao Meng, all former members of Apple’s foundational model team. The team has lost about 10 members in recent weeks, including its leader, a key group in developing Apple’s AI platform.  

 

Nvidia Denies H100/H200 Chip Shortage Rumors  

 

Nvidia stated that recent rumors about its H100/H200 chips being “supply-constrained” or “sold out” are untrue, affirming that there are sufficient H100/H200 units to meet all orders.  

 

Microsoft and US Government Reach New Agreement on Free Software Services  

 

Microsoft CEO Satya Nadella announced on September 2 that the company has reached a new agreement with the US General Services Administration, including free Microsoft 365 Copilot services to accelerate federal agencies’ adoption of AI and digital technologies, saving the US government over $3 billion in the first year.  

 

German SAP to Invest Over €20 Billion in ‘Sovereign Cloud’ Over Next Decade  

 

SAP announced it will invest more than €20 billion in a “sovereign cloud” over the next decade to support Europe’s AI ambitions. The goal is to ensure client data is stored within the EU, maintaining compliance with regional data protection regulations like GDPR.  

 

Buffett Expresses ‘Disappointment’ Over Kraft Heinz Split  

 

Warren Buffett expressed “disappointment” over the Kraft Heinz split. The US packaged food giant announced on Tuesday that the struggling company will restructure into two listed entities, effectively reversing the merger deal led by Buffett a decade ago.  

Forex & Commodities  

International oil prices rose, with WTI October crude futures settling at $65.59 per barrel, up 2.47%, and Brent November crude futures at $69.14 per barrel, up 1.45%.  

 

International gold prices hit a record high, with New York futures gold exceeding $3,600 per ounce and spot gold surpassing $3,530 per ounce.  

 

At the New York close, the US Dollar Index rose 0.66% to 98.32, with most non-US currencies declining.  

Key Events  

Market Enthusiasm Revives, Gold Breaks $3,500 to New High  

 

Researchers noted that in August, as countries reached trade agreements with the US before the so-called “reciprocal tariffs” took effect, the impact of trade conflicts on markets gradually eased. The severe deterioration in US nonfarm payroll data increased the urgency for Fed rate cuts. By late August, Fed Chair Jerome Powell signaled a dovish stance at the Jackson Hole symposium, with more officials supporting a September rate cut.  

 

Additionally, recent challenges to Fed independence, alongside falling Treasury yields and a weakening US Dollar Index, combined with rising gold ETF holdings—reaching a more-than-three-year high for the world’s largest gold ETF—reflect further inflows of Western capital. These multiple positive factors have driven gold to break key resistance levels and reach a historic high.  

 

Fed rate cut expectations are a key catalyst for gold’s surge. A Morgan Stanley report indicates that gold prices have averaged a 6% increase within 60 days of a Fed rate-cutting cycle beginning, with gains reaching 14% in some cycles. This catalyst alone could push gold prices to approximately $3,700 per ounce.  

Cryptocurrency  

Cryptocurrency markets moved sideways on Tuesday, with Bitcoin holding steady near $110,000.  

 

Ethereum (ETH-USD) up 0.14% to $4,320.  

 

XRP (XRP-USD) up 3.33%, BNB (BNB-USD) up 0.69%, and Solana (SOL-USD) up 5.95%.  

 

Dogecoin (DOGE-USD) down 1.77%, and Cardano (ADA-USD) up 4.15%.  

Key Events  

Strategy Completes Purchase of 4,048 Bitcoins  

 

Recently, the well-known investment firm Strategy announced it has completed the purchase of 4,048 Bitcoins. The transaction was initiated independently by the company to expand its digital asset portfolio.  

 

Based on public data, the purchase price aligned with market conditions at the time, with no premium or discount. Strategy stated that this move is part of its routine asset allocation adjustments.