ADDX GO Market Morning Wrap - 5th Sep
Stock Market
On Thursday, the three major US stock indices rose collectively, with the S&P 500 closing at a new all-time high.
At the close, the S&P 500 rose 0.83% to 6,502.08 points, surpassing the previous record set last Thursday, marking its 21st new high of the year;
The Dow Jones Industrial Average gained 0.77% to 45,621.29 points; the Nasdaq Composite rose 0.98% to 21,707.69 points, both near record highs.
Large-cap tech stocks broadly advanced, with Amazon up over 4%, Netflix up more than 2%, Meta and Tesla up over 1%, and Google, Apple, and Microsoft posting modest gains, with Google hitting a new high. In the chip sector, Micron Technology rose over 4%, United Microelectronics and ARM gained more than 3%, Intel, ASML, and Qualcomm rose over 2%, Nvidia edged up, while Texas Instruments fell over 4%.
Pre-market data from ADP showed the US “little nonfarm” private-sector job growth in August at 54,000, below market expectations. Traders believe the weak data is sufficient to prompt a Federal Reserve rate cut in September but not severe enough to signal a recession.
Jamie Cox, Executive Partner at Harris Financial Group, commented that the Fed can no longer ignore labor market shifts, as the ADP data reinforces the narrative of significant slowdown, “leading us to expect a rate cut in September to balance risks.”
Pre-market on Friday, the US Bureau of Labor Statistics will release the August nonfarm payrolls report, which traders hope will bolster the case for further rate cuts without triggering recession fears.
Earlier in the day, Cleveland Fed President Hammack reiterated there is no reason to cut rates this month, citing data showing inflation remains above the Fed’s 2% target and continues to rise.
On this, Will Compernolle, Macro Strategist at FHN Financial, said, “Even the most skeptical Fed officials should acknowledge that risks of a softening labor market are increasing.”
Compernolle added, “If this momentum persists over the next few months, the pace of layoffs could soon outstrip hiring, eventually leading to negative job growth.”
A 22V Research survey found that 36% of respondents expect a “risk-off” reaction to Friday’s data, 29% lean “risk-on,” and 35% see it as “both/neither or negligible.”
Global Hotspots
Trump Signs Executive Order to Implement US-Japan Trade Agreement
The White House stated that US President Trump signed an executive order to formally implement the US-Japan trade agreement. The order will clarify tariff adjustment measures, ensuring Japanese imports previously subject to higher tariffs are not double-taxed, while goods previously taxed below 15% will be adjusted to new rates.
Additionally, the White House noted that Japan is committed to accelerating a plan to increase US rice purchases by 75%.
Trump-Nominated Fed Governor Milan Reaffirms Commitment to Fed Independence
Trump-nominated Fed Governor Milan reaffirmed his commitment to the Federal Reserve’s independence during his confirmation hearing on Thursday. He also stated that the Fed’s primary duty is to prevent a Great Depression and runaway inflation.
This Trump administration official, who has spent much of his career studying monetary policy, authored a paper last year proposing several reforms to the Fed, including measures to weaken its independence.
Fed’s Williams Hints at Gradual Rate Cuts Over Time
New York Fed President John Williams recently indicated that he expects rates to “become suitable” for reduction over time, though he did not specify the timing or magnitude of cuts.
In a speech posted on the New York Fed’s website on Thursday, Williams said, “Looking ahead, if progress toward our dual mandate goals continues as I baseline forecast, I expect that, over time, it will be appropriate to adjust rates to a more neutral level.”
Fed’s Hammack Reiterates No Case for Rate Cut This Month
Cleveland Fed President Hammack reiterated her view that there is no reason to lower rates this month, as current data shows inflation remains above the Fed’s 2% target and continues to rise.
She noted that business leaders are feeling price pressures from suppliers. “Some are tied to tariffs, others are not,” she said. Hammack also warned that threats to Fed independence could jeopardize low inflation.
DRC Reports New Ebola Outbreak
DRC Health Minister Kamba announced on the 4th that a new Ebola outbreak has occurred in Kasai province in central DRC, marking the country’s 16th Ebola outbreak since 1976.
At a press conference in the capital Kinshasa, Kamba reported 28 suspected Ebola cases in the Bwapé region, including 15 deaths. He emphasized that these figures are preliminary, with ongoing investigations.
Company News
EU Softens Stance? Microsoft Antitrust Storm May End with ‘Unbundling Teams’
Microsoft may avoid a hefty antitrust fine, as the EU is reportedly receptive to the tech giant’s settlement proposal to “unbundle Teams” from its Office suite. Insiders revealed that EU regulators will accept Microsoft’s commitment to separate the collaboration tool.
They added that competitors and clients raised no significant objections during market testing.
Broadcom’s Q4 AI Chip Revenue Outlook Beats Expectations
Broadcom reported adjusted earnings per share of $1.69 for Q3, beating the $1.67 estimate; adjusted net revenue was $15.95 billion, above the $15.84 billion forecast; Q3 AI chip semiconductor revenue was $5.2 billion, exceeding the $5.11 billion expectation.
Broadcom forecasts Q4 revenue at approximately $17.4 billion, above the $17.05 billion analyst estimate, with AI semiconductor revenue projected at $6.2 billion, surpassing the $5.82 billion forecast.
Lululemon Lowers Full-Year Profit Outlook
Lululemon reported Q2 net revenue of $2.53 billion, slightly below the $2.54 billion expectation; Q2 earnings per share were $3.10, beating the $2.87 forecast; the full-year earnings per share guidance was lowered to $12.77-$12.97, down from the prior $14.58-$14.78 range.
General Motors Scales Back Bolt EV Production Plans
General Motors announced it will adjust production plans for the Chevrolet Bolt EV due to demand uncertainty, shifting from a planned two-shift system at its Kansas plant to a single-shift system starting in December.
Trump’s previously proposed $3.4 trillion fiscal package, which eliminated EV purchase incentives and repealed penalties for automakers failing federal fuel economy standards, also factors in.
BlackRock’s IBIT Bitcoin Holdings Surpass 750,000 BTC
Official data shows that as of September 3, BlackRock’s Bitcoin exchange-traded fund IBIT’s Bitcoin holdings have exceeded 750,000 BTC, reaching 750,057.56020 BTC, valued at $84.2 billion.
Data Security Firm Cohesity Considers 2026 IPO
Data security company Cohesity is considering an IPO in 2026. CEO Sanjay Poonen expects it to benchmark against Commvault and $17 billion-valued Rubrik. Nvidia has already invested in the company.
Forex & Commodities
Concerns that OPEC+ may increase supply at this weekend’s meeting led to a decline in international oil prices.
WTI October crude futures closed at $63.48 per barrel, down 0.77%; Brent November crude futures closed at $66.99 per barrel, down 0.90%.
COMEX gold futures for the current month fell $28.80, or 0.79%, to $3,606.7 per ounce.
At the New York close, the US Dollar Index rose 0.13% to 98.28, with most non-US currencies declining.
Key Events
Analysts: OPEC+ Easing Supply Cuts Could Weaken Oil Market Resilience
DNB Carnegie analysts warn that if OPEC+ decides to cancel the second phase of production cuts, global spare crude capacity will shrink rapidly. This possibility may be discussed at Sunday’s policy meeting. If the second-phase cuts are fully lifted, the gradual increase in production will take four to six months.
This would leave other oil-producing nations with little room to boost output in response to sudden demand surges or supply disruptions, making the global oil market more vulnerable to external shocks.
Cryptocurrency
Bitcoin fell 1.20% in the last 24 hours to $110,707.
Ethereum (ETH-USD) dropped 3.79% to $4,308.
XRP (XRP-USD) down 2.04%, BNB (BNB-USD) down 1.37%, and Solana (SOL-USD) down 4.24%.
Dogecoin (DOGE-USD) down 3.24%, and Cardano (ADA-USD) down 3.73%.
Key Events
Strategy Meets S&P 500 Profit Criteria, Could Drive $70 Billion Bitcoin Holdings
Strategy Inc., with $14 billion in unrealized gains last quarter, theoretically meets the S&P 500 inclusion profit criteria. If included, passive funds tracking the index would need to buy approximately 50 million shares, worth $16 billion at current prices, indirectly holding its $70 billion Bitcoin reserves.
Though added to the Nasdaq 100 by late 2024, S&P 500 inclusion depends on stricter liquidity, market cap (at least $22.7 billion), profit record, and industry balance criteria, subject to committee discretion.
