Worries about the Federal Reserve raising interest rates caused the Nasdaq to drop 1%, while Apple and Nvidia both saw a 3% decline. Additionally, oil prices continued to rise, reaching their highest level in nearly ten months.

The U.S. ISM Services PMI for August exceeded expectations, reaching a six-month high of 54.5. It has been expanding for eight consecutive months, with the employment index reaching its highest level since November 2021. The new orders index also hit a six-month high, while the payment index reflecting inflation reached a four-month high.

Analysts believe that this data highlights the resilience of U.S. consumer demand and the overall economy, increasing the probability of avoiding a recession. However, rising cost pressures for service providers may lead to long-term high inflation. As a result, market expectations for a November interest rate hike by the Federal Reserve have increased.

Bets on a November interest rate hike by the Federal Reserve have risen to 45%.

Meanwhile, the "soft data" of the U.S. Markit Services PMI for August unexpectedly revised down to 50.5, hitting a new low since January this year. The price payment index also reached its lowest level in two months. The final value of the Markit Composite PMI was revised down to 50.2, also the lowest since February.

The Federal Reserve's Beige Book, which reflects the economic conditions in various regions, stated that U.S. economic activity experienced "moderate growth" from July to August. Consumer spending on travel exceeded expectations, while employment growth during the survey period was restrained. The overall pace of price increases in multiple regions has slowed down.

The U.S. Senate confirmed the nomination of Philip Jefferson as the Vice Chairman of the Federal Reserve. Since joining the Federal Reserve Board, he has voted in favor of every interest rate decision. Prior to the pause in June, he hinted at the possibility of a temporary halt to interest rate hikes.

Former Federal Reserve hawk and former President of the St. Louis Fed, Brad, expects one more interest rate hike this year. Eric, a voting member of the Federal Reserve in 2025 and President of the Boston Fed, stated that interest rates may be very close to or have already reached their peak, but inflation is not yet under control. He emphasized the need to patiently evaluate data and there may be reasons to further tighten policy. Analysts believe that Eric supports a pause in interest rate hikes in September, with a market probability of 91%.

The central bank governors of the Netherlands and Slovakia both support an interest rate hike by the European Central Bank in September, and the central bank governors of Germany and France also stated that this possibility cannot be ruled out. However, the Governor of the Bank of Italy called for a halt to interest rate hikes as the rate level is approaching a point where it can be stopped. The market expects a 40% probability of a 25 basis point interest rate hike by the European Central Bank on September 14, almost doubling from last week's bets.

Previously, investors had been avoiding increasing bets on an interest rate hike by the ECB due to data showing a deterioration in the Eurozone economy. The ECB survey on Wednesday showed that consumer inflation expectations for the next three years rose from 2.3% in June to 2.4% in July, exceeding the central bank's target. Germany's factory orders in July plummeted by 11.7% MoM, far below the expected decline of 4%. A German think tank warned that the country's economy could shrink or deteriorate to 0.5% this year.

The Bank of Canada kept its key interest rate unchanged at a 22-year high of 5%, in line with expectations. However, the policy statement cited concerns about sticky inflation and stated that they are "prepared to raise interest rates again." Short-term Canadian bond yields rose, but the Canadian dollar fell against the U.S. dollar. According to CCTV, the European Union has announced the strictest industry regulation, the "Digital Markets Act," which identifies tech giants such as Amazon, Apple, Google, Meta, Microsoft, and ByteDance as being in a position of absolute monopoly. These companies will be obligated to refrain from abusing their market dominance to suppress or acquire competitors, as well as establish links with competitors. Failure to comply will result in fines of up to 10% of their annual turnover.

Dow Jones falls another 200 points, Nasdaq down 1%, Apple down 3.6%, Intel down 3%, Tesla down 4.5% with halved losses

On Wednesday, September 6th, the US stock market opened and continued its downward trend for the second consecutive day, hitting a new daily low at noon. The Dow Jones fell the deepest, dropping 350 points or 1%. The Nasdaq fell 1% within the first hour of trading, and by midday, the decline expanded to 1.6%, leading the major indices. The S&P 500 also briefly fell over 1%. Information technology and non-essential consumer goods performed poorly, with popular tech stocks such as Tesla, Apple, and Nvidia all falling over 3%.

Analysts believe that the continuous rise in oil prices over the past two weeks has intensified concerns about inflation. The August US CPI is expected to be even hotter, and the Federal Reserve still has a long way to go before ending the rate hike cycle. Therefore, "high oil prices have intensified the sell-off of US bonds, pushed up the US dollar, and also weighed on the US stock market."

In the final trading session, the decline in US stocks narrowed slightly. The Dow Jones hit its lowest level in nearly two weeks since August 25th, while the S&P, Nasdaq, Nasdaq 100, and Russell small-cap stocks all hit their lowest levels since August 28th. The Nasdaq fell below the 14,000 mark, and the Nasdaq 100 failed to reach a new five-week high:

The S&P 500 index closed down 31.35 points, a decrease of 0.70%, at 4,465.48 points. The Dow Jones closed down 198.78 points, a decrease of 0.57%, at 34,443.19 points. The Nasdaq closed down 148.48 points, a decrease of 1.06%, at 13,872.47 points. The Nasdaq 100 fell 0.9%, and the Russell 2000 small-cap stock index fell 0.3%. The "fear index" VIX rose 3.21% to 14.46.

The S&P 500 index closed below the 50-day moving average, major US stock indices have fallen this week

All 11 sectors of the S&P declined, with the information technology/tech sector falling 1.4%, consumer discretionary down nearly 1%, telecommunications services down 0.5%, and the energy sector up 0.14%.

Tech stocks fell together but narrowed their losses in the final trading session. "Metaverse" company Meta fell 0.3% from its three-week high; Apple fell 3.6%, marking its worst performance in a month; Tesla fell 4.5% and closed down 1.8%, both deviating from their one-month highs; Amazon, which was mentioned in the European regulatory act, fell 1.4%, Google A fell 1%, and Microsoft fell 0.2% from its five-week high; Netflix fell 0.7%, deviating from its highest level in a month and a half. Chip stocks also narrowed their losses in the final trading session. The Philadelphia Semiconductor Index fell nearly 2% before closing down 0.8%, pulling back from the one-month high set last Friday. Intel, which will participate in the Citigroup Global Technology Conference, initially dropped nearly 2% but rebounded by 0.7%, reaching a 13-month high. AMD fell over 1% from its three-week high, while Nvidia dropped 4% and closed at a week-and-a-half low, far from the closing historical high set last week.

Most AI concept stocks experienced a pullback. Palantir Technologies rose 0.6%, while SoundHound.ai fell 2% for the second consecutive day, reaching a low point in over a week. BigBear.ai fell over 5% and closed down more than 1%, moving away from its three-week high. C3.ai saw a slight increase before the earnings report, but dropped 8% after-hours, raising doubts among investors about whether the company can seize the AI boom.

On the news front, Tesla's official Weibo account announced that the 2 millionth Tesla vehicle has rolled off the production line at its Shanghai Gigafactory. However, it also warned that due to global plans to shut down factories, both car production and deliveries in the third quarter are expected to decline, triggering concerns about profit margins. Qualcomm's CEO predicted that artificial intelligence will create a new upgrade cycle for smartphones, and the Snapdragon Summit in October may bring significant developments in mobile technology.

Popular Chinese concept stocks initially bucked the trend and rose, but eventually followed the decline of the US stock market. The ETF KWEB rose 1.6% before a slight drop, CQQQ rose 0.8% before turning down 0.2%, and the Nasdaq Golden Dragon China Index (HXC) rose 1.3% before falling 0.5%, dropping below the 7100-point mark and further moving away from the three-week high.

Among the Nasdaq 100 constituents, JD.com fell 1.4%, Baidu fell 0.5%, and Pinduoduo rose 0.5%. In other individual stocks, Alibaba fell 0.2%, Tencent ADR fell 0.4%, Bilibili rose nearly 1%, NIO fell 2%, Li Auto rose 0.2%, and XPeng rose 1%. Faraday Future fell over 18% to a historical low. Luckin Coffee rose 4.6%, following a 5% increase in the previous trading session.

Regional bank stocks fell 2.3% to a two-week low. The industry benchmark, the KBW Bank Index, dropped 1.4% to a week-and-a-half low, reaching the lowest level since October 2020. The KBW Nasdaq Regional Banking Index (KRX) reached its lowest level since November 2020 on May 1. The SPDR S&P Regional Banking ETF (KRE) hit its lowest level since October 2020 on May 4. Short-term bond yields have risen more, deepening the financing cost pressure for regional banks.

The "Big Four" banks in the United States narrowed their losses in the final trading session, with Citigroup turning positive, while Bank of America and Wells Fargo cut their losses in half to 1%. Regional banks, on the other hand, experienced deeper declines. Western Alliance Bancorp fell nearly 5%, Zions Bancorporation and Keycorp fell over 3%, and PacWest Bancorp fell over 1%.

Other stocks with larger changes include:

"Retail investor favorite" AMC Entertainment Holdings fell nearly 37%, dropping below $10 to a historic low and marking its largest single-day decline in two and a half years since February 2021. The company plans to issue up to 40 million shares to raise funds.

Streaming media company Roku briefly rose over 14% to a one-month high, announcing a 10% workforce reduction, office space consolidation, and an improved revenue guidance for the third quarter.

Co-working giant WeWork initially rose nearly 17% but later fell over 4%, hovering near its all-time low. The company plans to renegotiate almost all office lease contracts and close underperforming spaces.

Southwest Airlines saw the deepest decline, falling over 3% to a three-month low, as it lowered its revenue guidance for the third quarter and expects higher-than-expected fuel costs.

European stocks fell, with Italy's stock index, which had risen against the trend yesterday, leading the major national indices with a 1.5% decline. The pan-European Stoxx 600 index fell 0.57%, marking its sixth consecutive day of decline. The home goods sector fell over 2%, leading the market, while bank stocks fell 1.5% and the Italian banking index fell over 3%.

Two-Year Treasury Yield Reaches 5% Again, Euro-American 10-Year Bond Yields Hit Two-Week Highs Together

US Treasury yields rose collectively once again. The two-year Treasury yield, which is more sensitive to monetary policy, rose by a maximum of 7 basis points, surpassing the 5% mark and recovering all of last Tuesday's losses. The 10-year bond yield rose by nearly 4 basis points and briefly surpassed 4.30%, reaching a two-week high since August 23. Analysts believe that US Treasury prices were also suppressed by the issuance of nearly $37 billion in corporate bonds this week.

US Treasury yields rose for two consecutive days, with short-term bond yields rising more significantly. Inflation panic and the possibility of a rate hike in September have reignited, pushing European bond yields to a two-week high. The yield on 10-year German bonds, the benchmark for the eurozone, rose 4 basis points at the close, marking a four-day consecutive increase. Meanwhile, the yield on 10-year Italian bonds, which rose more than 6 basis points, reached its highest level since August 22. The yield on 2-year German bonds increased by approximately 8 basis points, while the yield on 2-year UK bonds fell by more than 3 basis points.

Oil prices hit a near ten-month high, with WTI futures rising nearly 1% and Brent crude closing above $90 for two consecutive days

Oil prices rose during the US stock market session, reaching a near ten-month high since mid-November last year. WTI October crude oil futures closed up $0.85, or 0.98%, at $87.54 per barrel, with a peak increase of 1.3% during the session.

Brent November futures closed up $0.56, or 0.62%, at $90.60 per barrel, marking the second consecutive trading day above the psychological level of $90 and reaching a daily high of nearly $91.

Brent crude closed above $90 for two consecutive days, while WTI rose more than 1% during the session

The spread between the front-month Brent crude futures and the six-month futures increased to $4.13 per barrel, and the spread between the front-month WTI and the six-month futures expanded to $4.88 per barrel, both reaching a nine-month high, reflecting recent supply concerns.

However, some analysts believe that the maintenance period of US refineries from September to October will lead to a decrease in demand, potential increases in supply from Iran, Venezuela, and Libya, as well as the continuous appreciation of the US dollar, which will put pressure on future oil prices.

The TTF Dutch natural gas, the European benchmark, and ICE UK natural gas futures both fell more than 10% at the close, following a more than 4% increase yesterday. Negotiations between Chevron and Australian unions were extended for one day, and the strike plans at two LNG terminals in Australia will be suspended until Friday.

The US dollar rebounds and stabilizes at a near six-month high, while offshore RMB falls by 240 points and drops below 7.32 yuan

After the better-than-expected US ISM services data, the US dollar index DXY, which measures against six major currencies, rebounded during the US stock market session, reaching a high of 0.2% and briefly breaking through the 105 level. It has risen for four consecutive days, reaching the highest level during the session in nearly six months since mid-March.

Some analysts believe that in addition to market expectations of the Federal Reserve maintaining higher interest rates for a longer period of time, the US dollar has also benefited from the safe-haven demand due to concerns about sluggish economic growth in Europe and other global economies.

The US dollar stabilizes at a near six-month high The euro rose slightly against the US dollar and held above 1.07, while the pound fell the deepest by 0.6% against the US dollar and briefly dropped below 1.25, both hovering at a three-month low. The Australian dollar, which fell more than 1% yesterday, rebounded slightly, moving away from its ten-month low.

The Japanese yen continued to fall to a ten-month low, but earlier it rose and approached the 147 level against the US dollar, prompting speculation about possible intervention in the foreign exchange market by Japanese government officials. The offshore renminbi fell below 7.32 yuan, dropping nearly 240 points from the previous day's close, hitting a two-week low.

Mainstream cryptocurrencies are generally falling. Bitcoin, the largest cryptocurrency by market capitalization, fell by 0.4% and dropped below $25,700, hitting the lowest level since mid-June. The second-largest cryptocurrency, Ethereum, fell by 0.8% and approached $1,620, the lowest level in nearly six months.

Spot gold falls below $1,920, hitting a one-week low, while copper falls by 1.4%, hovering at a two-week low.

The rise in US bond yields and the US dollar once again put pressure on gold prices. COMEX December gold futures fell by 0.43% to $1,944.20 per ounce, and the silver futures, which fell 2.8% yesterday, fell by another 1.5%, both falling for two consecutive days.

Spot gold fell by nearly $11 or 0.6%, dropping below the $1,920 level, falling for five consecutive days and erasing all gains since last Tuesday. Spot silver fell by 2% for two consecutive days and approached the $23 level, hitting a two-week low.

Spot gold falls below $1,920, approaching the 200-day moving average.

Concerns about global economic growth and the strengthening of the US dollar have weighed on London industrial metal prices. The economic barometer, "Dr. Copper," fell by more than $110 or 1.4%, dropping below $8,400 and hovering at a two-week low. In mid-August, it hit the lowest level in two and a half months, approaching $8,100.

London aluminum remained flat and stayed below $2,200, hitting a one-week low. London zinc moved away from its one-month high, and London lead further moved away from the seven-month high set last week. London nickel fell by more than 2% and dropped below $21,000 to a monthly low, while London tin fell by 0.7%, moving away from a four-week high.