Preview of US Stock Market | The three major stock index futures are all rising, Trump's "tariff big stick" targeting furniture, heavy trucks and drugs, tonight PCE data is coming.

1. On September 26 (Friday) before the US stock market opened, the futures of the three major US stock indexes rose together. As of the time of publication, Dow Jones futures rose by 0.22%, S&P 500 index futures rose by 0.15%, and Nasdaq futures rose by 0.09%. 2. As of the time of publication, the German DAX index rose by 0.67%, the UK FTSE 100 index rose by 0.53%, the French CAC 40 index rose by 0.74%, and the European Stoxx 50 index rose by 0.72%. 3. As of the time of publication, WTI crude oil fell by 0.15%, to $64.88 per barrel. Brent crude oil fell by 0.14%, to $69.66 per barrel. Market News Tonight, the PCE data, the most favored inflation indicator by the Federal Reserve, will be released. After recent data showed stronger resilience in the economy facing tariffs than expected, the key PCE inflation report to be released at 8:30 p.m. Beijing time on Friday becomes especially important. Although the market generally expects that this favorite inflation indicator of the Federal Reserve will not show a very worrying increase, investors want to know if there are any hidden details. Forecasters expect that this report will show that the annual rate of inflation in August measured by Personal Consumption Expenditures (PCE) will reach 2.7%, higher than July's 2.6%, and the monthly rate will reach 0.3%, higher than last month's 0.2%; the core PCE, excluding the volatile food and energy sectors, is expected to have risen by 2.9% in the past year, the same as July, with the monthly rate falling slightly from 0.3% last month to 0.2%. Up to 100%! Trump's "tariff big stick" targets furniture, heavy trucks, and drugs. US President Donald Trump announced on Thursday that starting from October 1, the US will impose high tariffs on various imported products. Specifically, a 50% tariff on kitchen cabinets, bathroom vanity cabinets, and related products, a 30% tariff on imported furniture, a 25% tariff on imported heavy trucks, and a 100% tariff on patented and branded drugs. Trump wrote in a post on Truth Social on Thursday evening: "From October 1, 2025, we will impose a 50% tariff on all kitchen cabinets, bathroom vanity cabinets, and related products. In addition, we will impose a 30% tariff on upholstered furniture." The various tariffs imposed by Trump have significantly raised furniture prices in the past year. Data from the US Bureau of Labor Statistics show that furniture prices rose by 4.7% last month compared to August 2024. Milan calls for rapid and substantial interest rate cuts! JP Morgan pours cold water: the arguments lack persuasiveness and are unlikely to gain support within the Federal Reserve. Milan, the newly appointed director of the Federal Reserve, stated on Monday that the current interest rate level is too high, and he called for substantial and rapid interest rate cuts in the coming months to avoid unnecessary layoffs in the labor market. This is the first time Milan has publicly spoken about policy stance since joining the Federal Reserve Board. Milan pointed out that the neutral interest rate is significantly declining. In the past, this rate may have been systematically overestimated, and recent changes in tariffs, immigration restrictions, and domestic tax policies have further lowered the neutral interest rate. Therefore, in order to avoid causing harm to the economy, interest rates need to be significantly reduced. In his speech at the Economic Club of New York, he said, "In short, monetary policy is deeply restrictive. Keeping short-term rates about two percentage points higher than the neutral level could lead to unnecessary layoffs and higher unemployment." Liquidity alarm ringing! Bank of America Corp's reserves drop sharply for seven consecutive weeks, falling below $3 trillion. Due to the continuous outflow of liquidity from the financial system, the reserves of Bank of America Corp have dropped significantly for the seventh consecutive week, falling below $3 trillion. Bank reserves are a key factor in the Federal Reserve's decision to continue reducing its balance sheet. According to data released by the Federal Reserve on Thursday, bank reserves fell by about $21 billion to $2.997 trillion for the week ending September 24. This is the lowest level since the week of January 1. This decline comes as the US Treasury has increased debt issuance efforts after raising the debt ceiling in July to rebuild cash balances. This has sucked liquidity from the Federal Reserve's other liabilities on the books, such as overnight reverse repurchase agreements (RRP) and bank reserves. But as the so-called RRP approaches depletion, commercial bank reserves held by the Federal Reserve have been declining. Beware of the "October volatility" in the US stock market! Goldman Sachs Group, Inc. warns: history shows it is more turbulent than other months. The market is closely watching the Federal Reserve's upcoming interest rate adjustment measures, while an important earnings season is also approaching, and the threat of a government shutdown in the US is becoming more severe. Against this backdrop, the US stock market will face another risk factor. According to the derivatives team at Goldman Sachs Group, Inc., the historical price volatility of the S&P 500 index in October is about 20% higher than in other months. The Goldman Sachs Group, Inc. team tends to buy short-term options on trading days with catalysts while avoiding buying volatility contracts during non-event periods to take advantage of the volatile market during this earnings season. The Goldman Sachs Group, Inc. derivatives team said that since 1928, the historical price volatility of the S&P 500 index in October has been about 20% higher than in other months. In recent decades, this number has been even higher because the fourth quarter usually brings a lot of positive news for companies. Stock News Consumer demand remains stable, Costco Wholesale (COST.US) Q4 earnings exceed expectations. Costco Wholesale exceeded expectations in the fourth quarter earnings, indicating that consumers prioritize buying essentials and seeking discounts, and consumer spending remains healthy. Data shows that Costco Wholesale recorded total revenue of $86.156 billion for the fourth quarter ending in August, an 8% increase year-on-year, better than market expectations; net profit was $2.61 billion, compared to $2.354 billion in the same period last year; diluted earnings per share was $5.87, higher than market expectations, and $5.29 in the same period last year. Costco Wholesale's Q4 membership fee revenue was $1.724 billion, compared to $1.512 billion in the same period last year. Intel Corporation (INTC.US) becomes a new favorite in the market! Investors rush to buy call options betting on continued gains. Investors are heavily betting on Intel Corporation, believing that the stock's continued weeks-long rise will continue as this chip manufacturer seeks further partnerships and investments from the U.S. government, NVIDIA Corporation (NVDA.US), and other companies. Since September 17, Intel Corporation's stock price has risen by a cumulative 37% to $33.99. Data shows that the implied volatility of Intel Corporation's three-month options has soared to its highest level since the stock market selloff in April this year due to tariffs, but investors are not seeking to hedge against downside risks, but are buying call options that profit from further increases. At the same time, the premium of call options relative to put options for Intel Corporation has surged to its highest level since 2013. A large number of trades are concentrated in short-term contracts, with options expiring on Friday accounting for more than one-third of the total volume. Proposed TikTok U.S. business transaction priced at only $14 billion, Oracle Corporation (ORCL.US), Silver Lake, and MGX to hold 45% stake with board seats. U.S. President Trump has approved a proposal that allows TikTok to continue operating in the U.S., with Vice President Pence stating that the transaction will value TikTok's U.S. business at approximately $14 billion. According to the proposal, the U.S. investment group will hold TikTok's U.S. business, with Oracle Corporation serving as the provider of TikTok's security services. The specific members of the investment group have not been finalized. The deadline for the transaction to be completed is within 120 days, and it is unclear whether the Chinese side will approve the deal. According to sources, Oracle Corporation, Silver Lake Capital, and UAE's MGX are in discussions to invest in TikTok's U.S. business and obtain board seats. One source stated that the Trump administration recently encouraged MGX to join a non-Chinese holding alliance. ByteDance's shareholding in TikTok's U.S. business will be less than 20%. After a $34.5 billion fine, Alphabet Inc. Class C (GOOGL.US) may face heavy fines again for its search business in the EU. Alphabet Inc. Class C may face a second fine in the coming months for violating significant EU tech regulations, currently under consideration by the European Commission. Earlier this month, the European Commission imposed a $34.5 billion fine (approximately 29.5 billion) on this tech giant in a case related to online advertising technology. This new fine is related to charges filed in March this year, which accused Alphabet Inc. Class C of favoring its own vertical search engines (such as Alphabet Inc. Class C Shopping, Alphabet Inc. Class C Flights, Alphabet Inc. Class C Hotels) over competitors' similar products. These cases against Alphabet Inc. Class C are filed under the EU's Digital Markets Act. Sources revealed to the media that if Alphabet Inc. Class C can provide an improved resolution, it may avoid this latest fine. Important Economic Data and Events Forecast 8:30 p.m. Beijing Time: US August Personal Spending Rate (%) and US August PCE Price Index Annual Rate (%). 10 p.m. Beijing Time: Final value of the University of Michigan Consumer Confidence Index for September in the US. 1:00 a.m. the next day Beijing Time: Total US Rig Count as of September 26. 9:00 p.m. Beijing Time: FOMC Voter 2027, Richmond Fed President Barkin speaks. 10 p.m. Beijing Time: Federal Reserve Director Bowman speaks. 1 a.m. the next day Beijing Time: Federal Reserve Director Bowman participates in a discussion on monetary policy decision-making methods. 3:30 a.m. the next day Beijing Time: CFTC releases weekly position report.