The Dow hit its highest levels on record even though the Institute for Supply Management's services sector survey fell unexpectedly. The Dow was up 405 points, or 0.9%, and setting fresh intraday records. The S&P 500 was up 0.3% and also hitting its highest levels on record. The Nasdaq Composite was up slightly. All three only need to close higher to set fresh closing records. The ISM's services purchasing managers index fell to a 50 reading in September from 52 in August. Economists polled by FactSet antic ...

Group 1 - The U.S. stock market reached new historical highs driven by optimistic expectations of an upcoming interest rate cut by the Federal Reserve, with the S&P 500, Dow Jones Industrial Average, and Nasdaq Composite all setting closing records [1][4] - The bond market, in contrast, is signaling growing concerns about the economic outlook, as indicated by the drop in the 10-year Treasury yield, which fell below 4% for the first time since early April [4][5] - The August Consumer Price Index (CPI) showed an increase in goods prices due to tariff impacts, while service sector inflation remains above the Federal Reserve's ideal level, yet overall inflation is not expected to prevent a rate cut [4][5] Group 2 - The S&P 500 rose by 0.85%, the Dow increased by 1.36%, and the Nasdaq gained 0.72%, indicating strong market momentum despite expectations of a potential market correction [5] - The labor market is showing signs of weakness, with only 22,000 jobs added in August, and recent data revisions indicating a more challenging employment situation over the past year, which is a core reason for the Fed's potential rate cuts [5][6] - The actual tariff burden on U.S. consumers reached 17.7% in August, the highest level since 1934, posing challenges for the Federal Reserve in controlling inflation [5][6]

Core Viewpoint - The S&P 500, Dow Jones Industrial Average, and Nasdaq Composite are key stock market indexes that reflect the performance of the U.S. stock market, typically moving in tandem but with varying degrees of fluctuation [2] Group 1 - The S&P 500 index is designed to represent the performance of 500 large companies listed on stock exchanges in the United States [2] - The Dow Jones Industrial Average is a price-weighted index that includes 30 significant publicly traded companies [2] - The Nasdaq Composite index is heavily weighted towards technology and growth stocks, making it distinct from the other two indexes [2]

Market Insights - President Trump plans to appeal the global tariff ruling to the U.S. Supreme Court, citing an economic emergency in the U.S. He warns that a potential loss could lead to unprecedented market shocks [1] - Nearly 600 economists signed an open letter warning that the potential dismissal of Federal Reserve Governor Lisa Cook could threaten the independence of the Fed and erode trust in the U.S. financial system [1] - The ISM manufacturing index for August rose slightly to 48.7 but remains below the market expectation of 49, marking the sixth consecutive month below the neutral line [3] Economic Indicators - Japan's CPI for August increased by 1.7%, with the growth rate narrowing by 0.4 percentage points, the lowest since November of the previous year [4] - Eurozone's CPI for August rose by 2.1% year-on-year, while core CPI slightly decreased to 2.3%. Service prices saw a notable slowdown, increasing by 3.1% [3] Global Market Dynamics - The Dow Jones Industrial Average fell by 0.55% to 45,295.81 points, while the S&P 500 and Nasdaq Composite dropped by 0.69% and 0.82%, respectively [5] - Gold futures on COMEX rose by 1.51% to $3,599.5 per ounce, reaching a historical high [5] - U.S. oil futures increased by 1.56% to $65.62 per barrel, and Brent crude rose by 1.39% to $69.10 per barrel [6] Bond Market - The yield on 30-year German bonds reached its highest level since 2011, while French 30-year bond yields hit a new high since 2009 [7] - U.S. Treasury yields increased across various maturities, with the 10-year yield rising by 3.50 basis points to 4.260% [7] Currency Movements - The U.S. Dollar Index rose by 0.66% to 98.32, with the Euro and British Pound both declining against the dollar [8]

Group 1 - Trump had a 40-minute phone call with Putin, discussing support for direct negotiations between Russia and Ukraine [1] - Trump held a multilateral meeting with European leaders, including the President of Ukraine and heads of various European nations [1] - Indian Prime Minister Modi plans to reform the Goods and Services Tax in response to potential U.S. tariffs on Indian goods [1] Group 2 - Fitch Ratings confirmed New Zealand's rating at "AA+" with a stable outlook [1] Group 3 - The Dow Jones Industrial Average decreased by 0.08% to 44,911.82 points, while the S&P 500 fell by 0.01% to 6,449.15 points [2] - The Nasdaq Composite increased by 0.03% to 21,629.77 points [2] Group 4 - COMEX gold futures fell by 0.14% to $3,378.00 per ounce, while silver futures rose by 0.24% to $38.07 per ounce [3] Group 5 - U.S. oil futures rose by 0.97% to $62.58 per barrel, and Brent crude increased by 0.97% to $66.49 per barrel [4] - The U.S. dollar index increased by 0.31% to 98.16 [4]

Group 1 - The upcoming inflation trend data is expected to test the upward momentum of the US stock market, with some investors anticipating a potential pullback after the market reached record highs [1] - The S&P 500 index has risen over 8% year-to-date, nearing historical peaks, while the tech-heavy Nasdaq Composite has also hit new highs [1] - Analysts from Deutsche Bank and Morgan Stanley indicate that market valuations have been pushed to historical highs after a nearly uninterrupted rise over the past four months, suggesting a possible market correction [1] Group 2 - The July Consumer Price Index (CPI) report is set to be released next week, which could lead to market volatility, especially if inflation exceeds expectations [2] - Economists predict a year-over-year increase of 2.8% in the July CPI, and investors are closely monitoring the impact of tariffs on imported goods [2] - Following weak employment data, there has been a rise in bets on Federal Reserve rate cuts, with market expectations indicating at least two cuts this year [2] Group 3 - If the CPI increase exceeds expectations, it may pose risks to the prevailing narrative, potentially causing the Federal Reserve to hesitate on rate cuts [3] - The impact of higher tariffs on the economy remains a significant concern, despite the stock market reaching new highs [3] - Recent tariff increases have raised the average import tariff level in the US to its highest in a century, with new tariffs on semiconductor chips and pharmaceuticals announced [3]

Group 1 - The Federal Reserve's Daly indicates that the timing for interest rate cuts is approaching, with the likelihood of more than two cuts this year being higher [1] - South Africa's trade and foreign affairs department warns that the 30% tariffs imposed by the US on South African goods could severely impact the economy, potentially leading to the loss of approximately 30,000 jobs [2] - The Bank of Japan's meeting minutes reveal that some members are considering the possibility of resuming interest rate hikes once trade issues stabilize [3] Group 2 - The Dow Jones Industrial Average rose by 585.06 points, closing at 44,173.64, an increase of 1.34% [4] - COMEX gold futures increased by 0.85% to $3,428.60 per ounce, while silver futures rose by 1.40% to $37.45 per ounce [5] - The 2-year US Treasury yield fell by 2.70 basis points to 3.671%, while the 10-year yield decreased by 2.35 basis points to 4.196% [5]

Group 1 - Gold has outperformed the S&P 500 index over the past 20 years, with a return of 616% compared to the S&P 500's 421% [1] - As of Wednesday, gold has increased nearly 29% since the beginning of 2025, while the S&P 500 has only risen 8.1% this year [3] - The recent strong performance of gold is attributed to concerns over government debt levels and a weakening dollar, leading to increased demand for alternative currency assets [3][4] Group 2 - Gold has historically been a hedge against crises, but since 2020, it has shown strong performance even during stable market periods, indicating a new paradigm [4] - The relative performance of gold has fluctuated over the past 20 years, with exceptional performance from 2005 to 2014 due to low confidence in the financial system [7] - Many countries are now including gold in their foreign exchange reserves as part of a long-term strategy to diversify away from dollar-denominated assets [7] Group 3 - The SPDR Gold Shares ETF has attracted over $8 billion in inflows this year, despite a recent 1.2% decline [7] - The company believes that gold remains a valuable addition to diversified investment portfolios [8]

Core Viewpoint - The U.S. stock market shows resilience, with the S&P 500 index approaching historical highs, driven by easing geopolitical risks and falling oil prices [1][8]. Market Performance - The S&P 500 index remained stable, while the Nasdaq Composite rose by 0.3% and the Dow Jones Industrial Average fell by 0.3% [2][3]. - Recent market movements were influenced by a significant drop in oil prices, with WTI crude futures plummeting 6% on Tuesday, alleviating inflationary pressures and encouraging capital inflow into the stock market [8]. Chinese Stocks and Foreign Investment - Chinese stocks are gaining attention from foreign investors, with UBS reporting a shift from underweight to neutral or even overweight positions in Chinese equities [4]. - Goldman Sachs maintains an overweight recommendation for A-shares and Hong Kong stocks, projecting a target of 4600 for the CSI 300 index and 84 for MSCI China, indicating about a 10% upside potential [4]. - Morgan Stanley highlights that global investors are underexposed to Chinese stocks, predicting that Hong Kong markets and Chinese ADRs will attract significant capital inflows in the next 6-12 months [5]. Valuation and Growth Potential - Chinese equities are perceived as attractive due to their higher value-for-money and better growth prospects, with a free cash flow yield of 7.8% compared to 4.2% for U.S. tech giants [5]. - HSBC notes that the profit growth level of the Chinese stock market is now comparable to that of the U.S., while valuations remain at half of U.S. stock levels [6]. Economic Data and Federal Reserve Focus - The market's short-term focus is shifting towards upcoming U.S. new home sales data and Federal Reserve Chairman Jerome Powell's congressional testimony, which are expected to provide insights into economic fundamentals and policy direction [11]. - Powell has previously indicated that monetary policy will remain stable, with a need to assess the impact of tariffs and global market changes on price structures [11].

Core Viewpoint - The U.S. stock market indices have retraced some of their gains, with the S&P 500 and Nasdaq Composite turning negative during the day, while the Dow Jones Industrial Average is up by 0.2% [1] Group 1 - The S&P 500 index has shown a reversal in its upward trend, indicating potential volatility in the market [1] - The Nasdaq Composite index has also experienced a decline, reflecting broader market concerns [1] - The Dow Jones Industrial Average has managed to maintain a slight increase, suggesting some resilience among certain sectors [1]