**U.S. stocks show mixed performance, with the Nasdaq falling nearly 0.9%;
**Long-term U.S. Treasury yields edge higher;
**Second-quarter revenue misses expectations, leading to a sharp drop in Pinduoduo's stock.
U.S. stocks experienced mixed movements on Monday, as the market awaited this week's key inflation report and NVIDIA's earnings report. By the close, the Dow Jones Industrial Average rose by 65.44 points, or 0.16%, to 41,240.52, while the Nasdaq Composite fell by 0.85% to 17,725.76, and the S&P 500 index declined by 0.32% to 5,616.84.
Market Overview:
San Francisco Federal Reserve President Mary Daly stated on Monday that she believes it is appropriate for the Federal Reserve to begin lowering interest rates, starting with a 25 basis point cut. "The labor market has achieved full equilibrium. The time to adjust policy has come."
Last week, Federal Reserve Chairman Jerome Powell's remarks had already set the stage for an interest rate cut. Considering that some concerning economic data triggered a sell-off at the beginning of August, investors are worried that the Federal Reserve might act too slowly, which could harm the U.S. economy. Morgan Stanley stated, "The recent data has been a bit weaker than the Federal Reserve expected, but not significantly so. We maintain our view that the rate-cutting cycle will begin and continue with a (25 basis point) cut... but a significant weakening in the job market would mean more room for larger or additional cuts."
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Oppenheimer Asset Management said in a report that Powell's signal to shift towards rate cuts might have been supported by the recent downward revision of annual job growth data by the Bureau of Labor Statistics.
Long-term U.S. Treasury yields edged higher, with the closely watched 2-year note at 3.93% and the benchmark 10-year Treasury at 3.81%. According to the CME Group's FedWatch tool, the likelihood of a 25 basis point rate cut stands at 67.5%, while the possibility of a 50 basis point cut is at 34.5%.
The much-anticipated personal consumption expenditure data for July (the central bank's preferred inflation indicator) on Friday may provide further insights into the trajectory of policy easing.CFRA Research's Chief Investment Strategist, Sam Stovall, stated: "The Federal Reserve will raise interest rates by 25 basis points in September, November, and December because they want the market to know they are not behind the curve, but at the same time, they want to ensure they do not enter a rate-cutting mode too quickly."
On the individual stock front, NVIDIA fell by 2.3%, with its latest earnings report on Wednesday garnering widespread attention. Kim Forrest, Chief Investment Officer at Bokeh Capital Partners, said: "NVIDIA's report card is about to be revealed. Their forecast for artificial intelligence demand over the next six months or so may be the most important data we get this week."
Ross Mayfield, an analyst at Baird, believes that the tech sector has concerns about NVIDIA's upcoming performance. "The market is in a fairly healthy state, but if tech falls behind, it's really hard to make greater progress—it's too big a weight in the index, and now it's acting like a laggard."
Apple rose by 0.2%, with the company announcing a press conference to be held at its headquarters in Cupertino, California, on Monday, September 9th. It is expected that the event will see the announcement of the new iPhone and Apple Watch models. Reports suggest that this year's iPhone models may be called the iPhone 16, featuring larger screens, redesigned cameras, and new color options. Additionally, Apple will roll out the latest version of iOS 18 to all users and launch the artificial intelligence application, Apple Intelligence.
Among other star tech stocks, Microsoft fell by 0.8%, Amazon by 0.9%, Meta by 1.3%, and Google rose by 0.3%.
Boeing fell by 0.9%, following the decision by NASA to select SpaceX, rather than the aircraft manufacturer's Starliner, to bring stranded astronauts back from space next year.
Pinduoduo plummeted by nearly 29%, after the company's second-quarter revenue fell short of market expectations.
In terms of economic data, U.S. durable goods orders rebounded by 9.9% in July, exceeding expectations, as defense and civilian aircraft saw a resurgence in growth. The Dallas Fed indicated that the regional manufacturing index for August showed a slight improvement but remained below the boom-or-bust line, reporting at -9.7, due to positive production and shipments.
Oil prices surged significantly, as investors worried that the situation in the Middle East might disrupt the region's oil supply, with a substantial reduction in Libyan capacity, while the prospect of an interest rate cut in the U.S. boosted the global economic and fuel demand outlook. The near-month contract for WTI crude oil rose by 3.46%, trading at $77.42 per barrel, and the near-month contract for Brent crude oil increased by 3.05%, trading at $81.43 per barrel.
International gold prices fluctuated and edged higher, with the COMEX gold futures contract for delivery in August on the New York Commodity Exchange rising by 0.37%, trading at $2517.70 per ounce.
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