U.S. Stock Market Outlook | The three major stock index futures are mixed, with employment data replacing inflation as the focus, and the market betting on three interest rate cuts within the year

1. As of September 12 (Friday) before the US stock market opens, the three major US stock index futures are mixed. As of the time of writing, Dow futures are down 0.15%, S&P 500 futures are down 0.08%, and Nasdaq futures are up 0.04%.

1. As of the time of writing, the German DAX index is down 0.17%, the UK FTSE 100 index is up 0.37%, the French CAC40 index is down 0.37%, and the Euro Stoxx 50 index is down 0.28%.

1. As of the time of writing, WTI crude oil is up 1.76%, priced at $63.47 per barrel. Brent crude oil is up 1.97%, priced at $67.68 per barrel.

Market News

Unemployment data replaces inflation as the focus! Fed rate cut expectations solidify, with the market betting on three rate cuts this year. US Treasury bonds are expected to continue their upward trend, achieving a fourth consecutive week of gains. The unemployment claims data released on Thursday reinforced market expectations that the Fed will cut rates next week. The yield on the 10-year Treasury bond rose slightly by 2 basis points to 4.04%, but is still expected to decline for the fourth consecutive week, marking the longest losing streak since February. The more rate-sensitive 2-year yield rose slightly to 3.55%. As the market has fully priced in a 25 basis point rate cut next week, the focus now shifts to the pace of easing for the remainder of the year. US President Trump has repeatedly expressed a desire for significant rate cuts, but traders remained more cautious until yesterday. Current money market pricing indicates an 80% probability of two more rate cuts by the end of the year. Morgan Stanley expects the Fed to cut rates by 25 basis points at each of its remaining three meetings this year.

Is a nearly 10% increase just an appetizer? Wall Street is optimistic that small-cap stocks can rise another 20%! The Russell 2000 index (which includes some of the riskiest stocks in the market) has seen a rapid rise recently, with several Wall Street strategists believing that this rally has just begun. As a key indicator of small-cap stock performance, the Russell 2000 index has risen nearly 10% since the end of July, double the increase of the S&P 500 index. Compilation data shows that through bottom-up integration of analysts' target prices, analysts expect the "outperformance" of small-cap stocks to continue over the next year: the Russell 2000 index is expected to rise another 20%, while the expected increase for the S&P 500 index is 11%.

OpenAI reaches a non-binding agreement with Microsoft (MSFT.US): Non-profit parent company will hold over $100 billion in shares. On Thursday local time, OpenAI announced that it has reached a non-binding agreement with its largest investor, Microsoft (MSFT.US), which will allow OpenAI to advance its restructuring plan Transforming it into a for-profit company. OpenAI stated that the non-profit parent company will retain $100 billion or more in shares. It is reported that OpenAI announced a non-binding memorandum of understanding (MOU) with Microsoft, initiating the next phase of cooperation and reaching an agreement on the revised partnership. According to the agreement, OpenAI plans to transform its for-profit division into a Public Benefit Corporation (PBC). If this transformation is approved by regulatory agencies in the United States, it will provide OpenAI with new financing avenues and potentially create conditions for a future IPO.

U.S. mortgage rates see the largest drop in a year, leading to a surge in refinancing demand from homeowners. U.S. mortgage rates have experienced the largest decline in a year, driving a surge in refinancing demand from homeowners looking to save money. Freddie Mac stated in a release that the average rate for a 30-year fixed mortgage is 6.35%, down from 6.5% last week. Borrowing costs have been on a downward trend for several months and fell again after last Friday's disappointing employment report. Additionally, data from Texas-based mortgage technology company Optimal Blue shows that as of Monday, consumers could lock in a 30-year loan at a rate of 6.27%, the lowest level in nearly a year. The company noted that the following day, as rates slightly rebounded, the volume of rate locks surged to the highest single-day level since 2022.

Interest rate cut expectations ignite a "gold rush"! Gold prices break through historical inflation peaks, silver prices rise to a 13-year high. Driven by expectations that the Federal Reserve is preparing to lower U.S. interest rates, gold is poised to rise for the fourth consecutive week, with inflows into gold-backed exchange-traded funds also supporting gold prices. Gold prices broke through $3,650 per ounce, rising nearly 2% this week, and reached a historic record during Tuesday's trading session. In tandem, silver prices broke through $42 per ounce, reaching the highest level since 2011. Thursday's data showed that U.S. consumer prices rose as expected in August, providing Federal Reserve policymakers with room to lower borrowing costs following a series of weak labor market data releases.

Individual Stock News

Adobe (ADBE.US) Q3 earnings exceed expectations, strong performance outlook highlights promising returns from AI capabilities. Adobe provided a strong quarterly revenue outlook, indicating that the software manufacturer's investments in artificial intelligence capabilities are paying off. Data shows that for the third quarter ending August 29, revenue grew by 11% to $5.99 billion. Analysts had previously expected $5.91 billion. The earnings per share, excluding stock-based compensation and other items, was $5.31, while the average expectation was $5.18. Sales in the digital media segment, which includes Adobe's flagship creative and document processing software, grew by 12% to $4.46 billion. The annual recurring revenue for this highly watched segment was $18.6 billion.

Self-sufficiency is "crucial"! Microsoft (MSFT.US) invests heavily to enhance its self-developed AI models. Microsoft plans to expand its physical infrastructure to train its own artificial intelligence (AI) models, hoping these models can compete with companies like OpenAI and Anthropic Mustafa Suleyman, Microsoft's head of consumer artificial intelligence, stated at an all-staff meeting on Thursday that the company will make "large-scale investments" in its computing power clusters to train models. According to attendees, Suleyman told employees that it is crucial for a company of Microsoft's scale to have the capability to be self-sufficient in the field of artificial intelligence. He added that Microsoft has adopted a strategy of deepening its cooperation with OpenAI, collaborating with other model manufacturers, and building self-developed models.

CleanCore (ZONE.US) aims to become the "next Strategy"? Copying the "Treasury" script, targeting 1 billion Dogecoins. CleanCore Solutions, focused on clean products, announced on Thursday Eastern Time that as an important part of its recently launched "Treasury Reserve Plan," the company has currently accumulated over 500 million Dogecoins (DOGE-USD). This marks half of the company's goal to purchase up to 1 billion of this meme token within 30 days. Boosted by the company's large-scale coin-buying initiative, some investors are beginning to envision that the company will replicate the cryptocurrency accumulation model of Strategy (formerly MicroStrategy) — continuously increasing its holdings of a particular cryptocurrency, thereby driving the company's stock price to follow the soaring cryptocurrency towards a "super bull market trajectory."

Apple (AAPL.US) smartwatch blood pressure detection feature approved by FDA, set to launch next week. Apple announced that its smartwatch blood pressure detection system will be launched next week, having received approval from the U.S. Food and Drug Administration (FDA) on Thursday. This feature was announced at Apple's latest product launch event in early September and will be available in 150 countries and regions, including the United States, Hong Kong, and the European Union. The company had previously stated that it was awaiting approval from the FDA and other regulatory agencies. According to Apple, the tool will utilize data from the optical heart rate sensor on the Apple Watch to analyze how the user's blood vessels respond to heartbeats over a 30-day period. If any signs of chronic hypertension (i.e., high blood pressure) are detected, users will be notified and encouraged to inform healthcare professionals of the results. The tool will be available on Apple Watch Series 9/10/11 and Ultra 2/3 models.

Important Economic Data and Event Forecast

Beijing time 22:00: U.S. September Michigan Consumer Sentiment Index preliminary value.

Next day Beijing time 01:00: U.S. total number of active drilling rigs as of the week ending September 12.

Next day Beijing time 03:30: CFTC weekly positions report