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Strong employment meets high oil prices, as markets begin repricing "rate hikes"
Today, the U.S. and Canadian markets are closed for Labor Day, resulting in a pause in U.S. stock market liquidity and an early close for gold, silver, and oil trading. However, ahead of the holiday, strong non-farm payroll data last Friday cooled market sentiment, reigniting expectations of rate hikes and pressuring tech giants. U.S. non-farm payrolls added 162,000 jobs in August, significantly exceeding the market expectation of 55,000, while the unemployment rate held steady at 4.1%, pushing the probability of a Fed rate hike in September from around 49% to 58%.
U.S. stocks came under pressure last Friday, with all three major indices closing lower: the Dow Jones Industrial Average fell 0.51%, the S&P 500 dropped 0.38%, and the Nasdaq Composite declined 0.29%.
This week, the core market narrative centers on verifying inflation trends, as traders closely monitor whether rising oil prices are transmitting cost pressures across the broader economy. Traders will seek answers in Thursday’s PPI and Friday’s CPI data—both of which represent the final pieces of the puzzle before the Fed’s September interest rate meeting.
Federal Reserve Governor Waller has provided key clues: if core CPI month-over-month does not exceed 0.2%, he leans against raising rates; if it reaches above 0.3%, he would consider a rate hike. Bank of America and Citigroup have even put forward two entirely different scenarios. Bank of America forecasts core CPI at 0.22% month-over-month, believing the data would be sufficient to justify a September rate hike; Citigroup, however, expects only 0.184%, suggesting most officials may keep rates unchanged.
The situation in the Middle East escalated again over the weekend, with the U.S. stating it struck three Iranian tankers, while Iran threatened to establish a "no-go zone" near the Strait of Hormuz. OPEC+ maintained October production levels unchanged on Sunday, offering no additional supply buffer. Crude oil futures opened higher this morning, with Brent crude futures rising to around $93; WTI crude futures climbed approximately 0.99% to around $92.40. Morgan Stanley raised its Q4 price target to $100.
Trump continues to be a market variable, frequently posting on social media about Iran, the Space Force, Intel’s earnings, and other topics, stating, “I’m doing this for the country, not for myself,” while U.S. officials persist in declaring their intent to “strangle” Iran’s economy; rising energy prices have begun to erode his approval ratings and the Republican Party’s prospects in the midterm elections.
U.S. Treasuries approach a pressure zone, the dollar holds at elevated levels, and gold longs face a short-term purge.
The U.S. Treasury market has already tightened, with the 10-year U.S. Treasury yield remaining near 4.79%, approaching the 5% level that many market participants view as a clear threshold for pressuring equity valuations.
This week, the U.S. Treasury will also launch its "doubling" Treasury buyback program, effective September 9, aimed at improving liquidity in the long-end bond market. At 1:00 AM on September 10, the U.S. Treasury will conduct an auction of 10-year Treasuries; the previous auction had a stop-out yield of 4.68% and a bid-to-cover ratio of 2.53. This auction’s demand will directly test whether global capital is willing to absorb long-term bonds at current high yield levels.
The U.S. Dollar Index is consolidating near 99, putting short-term pressure on gold, which briefly fell below $4,400 per ounce. However, Middle East risks and central bank gold purchases continue to support gold prices, with three major investment banks still backing the bullish case for gold:
- Citibank sets a gold price target of $4,800 per ounce for 0 to 3 months and $5,000 per ounce for 6 to 12 months;
- Goldman Sachs believes the gold bull market is merely a "prolonged pause," with support from sovereign and institutional funds around $4,000 per ounce;
- UBS emphasizes that U.S. fiscal risks and "fiscal dominance" are making gold a long-term allocation asset.
Silver is entering a new trading phase; CME Group will extend the 100-ounce silver futures contract to 24-hour trading on September 11, following the 24-hour trading of the 1-ounce gold futures contract, further activating liquidity in the precious metals market during weekends and Asian trading hours.
AI computing power breaks through against the trend, while most large tech stocks retreat.
Although the three major U.S. stock indices closed lower, the market sentiment was not universally pessimistic. Most large tech stocks experienced pullbacks, with Apple, Microsoft, and Tesla weighing on the indices; however, AI hardware sectors such as storage, optical communications, and semiconductor equipment showed clear strength.
Goldman Sachs’ Chief Asia Equity Strategist, Timothy Moe, remains bullish on the Korean stock market, maintaining a KOSPI target of 12,000, implying nearly 80% upside from current levels. He believes the market is underestimating the sustained earnings tailwind AI is providing to memory chip manufacturers and expects U.S. tech giants to exceed $1.2 trillion in capital expenditures next year.
NVIDIA continues to serve as the centerpiece of the AI industry chain; Jensen Huang publicly praised OpenAI’s GPT-6 Astra, stating it was trained on over 100,000 NVIDIA Grace Blackwell NVLink72 chips, and declared, “AGI has arrived”; Goldman Sachs’ Delta One trading desk also believes Astra may represent the long-awaited capability breakthrough that AI bulls have been waiting for.
However, AI is not without risks. Michael Hartnett, Chief Investment Strategist at Bank of America, warned that if Democrats sweep both chambers in the midterm elections, U.S. stocks could fall more than 10%, the dollar could weaken, bond yields could decline, and the AI bubble could face a burst; in his view, the global surge in bond yields itself is already the greatest threat to the AI capital spending boom.
Specific project actions and stock price fluctuations:
Micron Technology rose 6.10%: The primary driver was expectations of HBM production expansion, as the company plans to increase its monthly HBM wafer output to approximately 100,000 wafers by year-end, nearly doubling from last year, while accelerating mass production of HBM4 12-layer products for NVIDIA’s “Vera Rubin” architecture. Most memory stocks surged: SanDisk rose 11.9%, SK Hynix climbed over 8%, Western Digital gained over 5%, while Seagate Technology fell over 6%.
NVIDIA rose 0.84%. Jensen Huang stated that GPT-6 Astra was trained on over 100,000 Grace Blackwell NVLink72 chips and declared that AGI has arrived. The market is also closely watching NVIDIA’s $12.9 billion acquisition of the open-source AI platform Hugging Face; traders believe NVIDIA is evolving from a chip supplier into the "implicit price setter" of the AI developer ecosystem.
Semiconductor equipment and materials strengthen: Aehr Test Systems rises 13.1%, Cohu increases 10.31%, KLA rises 7.32%, Entegris gains 6.15%, Lam Research climbs 5.12%, and ASML advances 4.17%.
Tesla fell 5.92%: The Cybercab launch fell short of market expectations; the event was not live-streamed publicly, and Musk did not appear. More importantly, the U.S. NHTSA has begun reviewing approximately 1,000 Cybercabs for compliance with safety standards, with regulatory uncertainty weighing on the stock price.
Apple fell 2.51%: The market is pricing in costs and pricing pressures ahead of the launch. Apple will unveil its first foldable iPhone and the iPhone 18 Pro series on the morning of September 10. Morgan Stanley considers this Apple’s most important launch in nearly a decade, but expects the Pro series to increase in price by $200 to $500, with the foldable iPhone potentially starting at $2,399. In related sectors, Xiaomi Corp-W fell 3.94% latest; the Huawei Mate XT 2 and Xiaomi 18 Fold are set to launch in the same week, bringing the foldable display, storage, panel, and precision manufacturing supply chains into an event-driven window.
Lululemon fell 17.38%: Second-quarter revenue declined 4% year-over-year, comparable sales dropped 9%, North American sales fell 12%, core yoga pant sales plunged 20%, and the company lowered its full-year revenue guidance for the second consecutive quarter.
Other giants: Microsoft fell 2.04% (Morgan Stanley believes Microsoft’s restructuring of business disclosures won’t alter its fundamentals but will reduce visibility into the profitability of certain segments; additionally, Microsoft and OpenAI have been sued by U.S. newspapers over AI training data issues); Google fell 1.11% (launched the more advanced WeatherNext 3 global weather prediction large model); Meta Platforms rose 1% (the company is attracting customers to its AI models with significant discounts and continues to enhance agent capabilities and programming functions); Amazon fell 0.15% (a Prime Air cargo plane crashed in Miami, prompting FAA investigation); SpaceX fell 1.2% (under pressure from the White House, SpaceX, Blue Origin, Stoke Space, and Starcloud canceled their participation in the Paris Space Summit).
Next, pay attention to:
September 7 (Monday)
U.S. and Canadian markets are closed for Labor Day: U.S. markets will be closed for one day, and trading in gold, silver, and oil will end early, leading to a significant reduction in global liquidity. In a low-liquidity environment, Middle East tensions, crude oil gaps, and dollar volatility are more likely to be amplified, with Asian and European trading sessions assuming a greater role in price discovery.
Huawei Mate XT 2 (14:30), Xiaomi 18 Fold launch (19:00): Huawei’s new tri-fold flagship will debut HarmonyOS 7, while the Xiaomi 18 Fold will be powered by the Xuanjie O3 AI flagship processor. The foldable display, hinge, panel, storage, precision components, and edge-side AI supply chain may receive sentiment catalysts.
The expansion of the Stock Connect program takes effect: Baidu Group-W, Qunxue Technology, and others have been officially added to the Stock Connect eligible list. Inflows of southbound funds will influence the short-term performance of the related stocks.
September 8 (Tuesday)
0:00 Canada's retaliatory tariffs on approximately $20 billion worth of U.S. goods have taken effect: renewed trade tensions are increasing uncertainty over costs in the North American supply chain. Companies in automotive, agriculture, industrial goods, and cross-border supply chains may experience market sentiment disruptions.
9:20 Jiangbo Long lists on the Hong Kong stock exchange: The company aims to raise no more than HK$6.28 billion, with the H-share offering price significantly discounted compared to its A-shares; today’s performance will test sentiment toward the storage industry supply chain and semiconductor IPOs.
23:00 U.S. August NY Fed One-Year Inflation Expectations: If inflation expectations rise, the Fed will find it harder to pause rate hikes; if they decline, pressure on U.S. Treasury yields and the dollar may ease.
September 9 (Wednesday)
0:00 The U.S. Treasury's expanded Treasury buyback program has taken effect: the single-session buyback size has been increased by at least double to over $4 billion, continuing until November 4, aiming to improve liquidity in the long-term Treasury market. If the buybacks enhance market absorption capacity, the 10-year Treasury yield may temporarily decline; if demand for long-term bonds remains weak, the risk of yields approaching 5% will continue to pressure tech stock valuations.
01:00: $58 billion 3-year U.S. Treasury auction—this is the first key test of the three-day auction window.
September 9 to 10, the U.S. Republican Party held its midterm convention: the market is closely watching Trump and the Republican Party’s positions on tariffs, fiscal policy, immigration, and energy. If the policy tone is perceived as hawkish, it could impact the dollar, energy markets, defense, manufacturing reshoring, and global trade chain pricing.
September 9 to 10: Paris Space Summit—U.S. companies such as Blue Origin, SpaceX, StokeSpace, and Starcloud are reportedly absent; monitor whether political or commercial tensions emerge in U.S.-Europe space cooperation, as this could sentimentally impact commercial space and satellite communications stocks.
September 9 to 10, the 11th Belt and Road Forum: Held at the Hong Kong Convention and Exhibition Centre, with Li Jiachao in attendance.
Yudi Robotics listed on the Hong Kong Stock Exchange: The enthusiasm for this robotics IPO will impact sentiment in the robotics, automation, and AI hardware sectors.
September 10 (Thursday)
01:00 Apple's Fall Product Launch: The first foldable iPhone, iPhone 18 Pro, and iPhone 18 Pro Max will be unveiled, marking the first major product test for new CEO John Ternus. The market is closely watching the pricing of the foldable model, inventory levels, initial sales arrangements, price increases for the Pro series, and gross margin protection; if the pricing is accepted by the market, the foldable, storage, display, hinge, and precision manufacturing supply chains are expected to benefit.
01:00 $39 billion U.S. 10-year Treasury auction: The current yield on 10-year U.S. Treasuries has risen to approximately 4.78%. The bid-to-cover ratio, demand from indirect bidders, and tail spread will be key indicators of long-term U.S. Treasury demand. If the auction is weak, yields may move closer to 5%, pressuring banks, real estate, and high-valuation growth stocks; if demand is robust, it could help alleviate interest rate pressures.
20:15 ECB interest rate decision; 20:45 Lagarde press conference: Markets are divided on whether the ECB will hike rates, with focus on energy inflation, wage pressures, and December policy guidance. If the remarks are hawkish, the euro and European bond yields will rise; if dovish, markets will lower expectations for future rate hikes.
20:30 U.S. August PPI Year-over-Year and Month-over-Month: The market expects the PPI month-over-month to rise to 0.4% and the year-over-year to increase to approximately 5.2%-5.3%, with energy and transportation costs as key variables. If PPI comes in hotter than expected, markets may price in加息 risk ahead of CPI; if moderate, pressure on equities and bonds may ease.
OPEC releases its monthly oil market report: The report will update global crude oil supply and demand, inventories, and OPEC+ production compliance. If demand remains robust and supply is constrained, oil prices may continue to receive support and reignite inflation expectations; if demand is revised downward, the upward momentum of oil prices may be limited.
September 11 (Friday)
Oracle and Adobe after-hours earnings: Oracle will be closely watched for cloud infrastructure orders, AI data center contract conversion rates, and capital expenditures; Adobe will be closely watched for whether generative AI features like Firefly can drive growth in subscription rates and average revenue per user. Both companies will test the monetization capabilities of AI infrastructure and AI applications, respectively.
01:00 Auction of $22 billion 30-year U.S. Treasuries: This is the final auction in a three-day wave of U.S. debt supply and the most critical test of long-term capital confidence.
CME Group's 100-ounce silver futures to expand to 24-hour trading: Extending silver trading hours will enhance liquidity in Asia and over weekends. Price discovery in the precious metals market will become more continuous, potentially increasing silver volatility and cross-market arbitrage opportunities.
The 2026 China Computing Power Conference will open in Langfang from September 11 to 13: The event will focus on computing infrastructure and AI infrastructure. Areas such as servers, data centers, liquid cooling, optical modules, switches, power supplies, domestic chips, and computing power leasing may benefit from event-driven catalysts.
20:30 U.S. August CPI and Core CPI: This is the final key inflation data before the Fed’s September 15–16 monetary policy meeting. Markets expect overall CPI to rise 0.4% month-over-month and 3.4% year-over-year, with core CPI up 0.2% month-over-month and 2.5% year-over-year. If core CPI is at or below 0.2%, the likelihood of a hold in September will rise, potentially leading to declines in U.S. Treasury yields and the dollar, while benefiting the Nasdaq, gold, long-term bonds, and high-valuation growth stocks. If core CPI reaches 0.3% or higher, markets will reprice加息 risk, putting pressure on tech stocks and gold.
September 12 (Saturday)
Musk announces the release window for Grok 4.7: the market is closely watching its leap in capabilities with a 2.1 trillion parameter model, inference costs, and pricing strategy. If performance exceeds expectations, sentiment around AI applications could be reignited, indirectly reinforcing demand for computing power, storage, and data centers.
The 18th BRICS Summit: Markets are focused on cooperation among emerging markets, energy settlement, trade arrangements, and de-dollarization. If discussions involve gold reserves, cross-border payments, or commodity settlement mechanisms, they could influence sentiment toward the U.S. dollar, gold, and emerging market assets.