Overnight US stocks | The three major indices rose this week with the Dow hitting a new high. Apple Inc. (AAPL.US) rose 4.8%. Chip stocks fell for two consecutive days.

On Thursday, the three major indices showed mixed movements, with the Dow hitting a new historical high. The US June non-farm payrolls report was weaker than expected, leading the market to believe that the Federal Reserve would temporarily postpone raising interest rates. Chip stocks fell, dragging the Nasdaq lower, and news emerged that Meta's CEO Mark Zuckerberg had expressed at an internal all-staff meeting that the development speed of AI intelligence models over the past four months had not met expectations. On Friday, US markets will be closed for a day. Due to the 2026 US Independence Day falling on a Saturday, American Financial Group, Inc. markets will close a day in advance on Friday (July 3rd) for a makeup holiday. This week, the Dow cumulative rose by 1.97%, the Nasdaq rose by 2.12%, and the S&P 500 index rose by 1.76%. [US stock market] At the close, the Dow rose by 594.18 points, up 1.14%, to 52,899.42 points; the Nasdaq fell by 207.36 points, down 0.80%, to 25,832.67 points; the S&P 500 index rose by 0.01%, to 7483.24 points. Micron Technology, Inc. (MU.US) fell 5.4%, SanDisk (SNDK.US) fell 14%, Intel Corporation (INTC.US) fell 5%, Seagate Technology Holdings PLC (STX.US) and Western Digital Corporation (WDC.US) fell by 10%. Apple Inc. (AAPL.US) rose by 4.8%, while Meta (META.US) fell by nearly 5%. The Nasdaq China Golden Dragon Index fell by 1.77%, and XPeng, Inc. ADR Sponsored Class A (XPEV.US) fell by around 4%. [European stocks] The German DAX30 index rose by 529.08 points, or 2.11%, to 25,598.19 points; the UK FTSE 100 index rose by 181.73 points, or 1.73%, to 10,660.07 points; the French CAC40 index rose by 137.57 points, or 1.65%, to 8,474.86 points; the Euro Stoxx 50 index rose by 84.55 points, or 1.35%, to 6,367.05 points; the Spanish IBEX35 index rose by 277.54 points, or 1.43%, to 19,684.14 points; the Italian FTSE MIB index rose by 847.94 points, or 1.64%, to 52,452.50 points. [Asian stock markets] The Nikkei 225 index fell by 2.47%, and the KOSPI index fell by 7.89%. [US dollar index] The US dollar index, which measures the US dollar against six major currencies, fell by 0.52% on the day, closing at 100.861 in the forex market. At the close of the New York forex market, 1 euro exchanged for 1.1433 US dollars, higher than the previous trading day's 1.1380 US dollars; 1 pound exchanged for 1.3348 US dollars, higher than the previous trading day's 1.3278 US dollars. 1 US dollar exchanged for 161.05 Japanese yen, lower than the previous trading day's 162.53 Japanese yen; 1 US dollar exchanged for 0.8035 Swiss francs, lower than the previous trading day's 0.8092 Swiss francs; 1 US dollar exchanged for 1.4182 Canadian dollars, lower than the previous trading day's 1.4216 Canadian dollars; 1 US dollar exchanged for 9.6679 Swedish Krona, lower than the previous trading day's 9.7300 Swedish Krona. [Cryptocurrency] Bitcoin rose by over 1.7% to $61,516.38, while Ethereum rose by over 4.9% to $1697.8. [Crude oil] Light crude oil futures for delivery in August on the New York Mercantile Exchange rose by 11 cents to $68.69 per barrel, an increase of 0.16%; Brent crude oil futures for delivery in September rose by 23 cents to $71.80 per barrel, an increase of 0.32%. [Precious metals] Spot gold rose by 2.29% to $4124.07, while spot silver was at $60.946. [Macroeconomic news] The largest volatility gap since 2008, signaling a cooling trend in the tech bull market. Reports indicate that tech stock growth has slowed recently, leading to wavering confidence among traders. The volatility gap between the Nasdaq 100 index and the S&P 500 index has widened to its highest level since the 2008 financial crisis. This is mainly due to investors showing a stronger willingness to buy Nasdaq put options, indicating rising concerns about potential pullbacks in tech stocks, especially in the AI sector. On Thursday, the Semiconductor ETF (SMH.US) fell by over 5%, further reflecting the weakening momentum of previously popular tech stocks. Despite this, the enthusiasm for bullish options in the market, while somewhat reduced, remains at a high level. Analysts believe that although the summer market is usually calm, the volatility of tech stocks is expected to remain higher than the overall market. Trump: Will continue to seek to remove Fed Governor Cook through "winning lawsuits." Despite the US Supreme Court ruling that the president currently does not have the power to remove Fed Governor Lisa Cook, Trump still plans to try to dismiss Cook from the central bank. When asked about how he intends to "get rid of" Cook, Trump responded, "By winning this case." Trump said, "The Supreme Court sent the case back not based on the substance of the case, but on 'procedure and process'." The opinion issued by the US Supreme Court on Monday did leave open the possibility of Cook being removed in the future. Fed's Daly emphasizes no change in dual mandate goals but willing to assess the economy in new ways. Fed's Daly stated that inflation is expected to begin slowing down, but there is still significant uncertainty about the economic outlook. Daly said at a Bank of Spain event on Thursday, "We continue to keep policy at a slightly restrictive level, so inflation should come down." She noted that following the US's war with Iran, tariffs in spring and rising oil prices pushed up inflation. She appreciated the easing momentum in oil prices after the US and Iran reached a ceasefire agreement, calling it "a hopeful relief," but warned that the economic future is still unclear. She outlined several scenarios that could require a different response from the Fed and indicated that the Fed may need to be more proactive in addressing persistent inflation. Daly also mentioned that she is open to using different and novel methods to assess the economy, but emphasized the importance of not changing the Fed's dual mandate goals of promoting full employment and stable prices. US non-farm payrolls lower than expected, prompting the market to lower Fed rate hike expectations. The US economy added 57,000 non-farm payrolls in June, lower than Wall Street's expectations. After three consecutive months of employment growth exceeding expectations, the pace of job growth slowed in June, leading the market to lower expectations for a Fed rate hike. Data released by the US Labor Department on Thursday showed that job growth in June significantly dropped from the downward-revised 129,000 jobs in May and was also lower than the economists' forecast of 115,000 jobs. This report marks a significant cooling in the labor market after three consecutive months of better-than-expected job growth. Despite the decline in job growth, it is still well above the target of adding 1,000 jobs annually on average in 2025. The unemployment rate slightly decreased from 4.3% in May to 4.2%. Due to the lowered expectations for a Fed rate hike, the US dollar weakened. Futures traders currently predict that the Fed will raise rates in December. Previously, the market expected a rate hike in October. US initial jobless claims decline, companies still avoiding mass layoffs. Last week, US initial jobless claims slightly declined as companies continued to avoid mass layoffs. The US Department of Labor stated on Thursday that for the week ending June 27, initial jobless claims were at 215,000, lower than the market's expectations of 220,000, and down from the previous week's 216,000. Continuation jobless claims for the week ending June 20 were at 1.814 million. According to the latest employment situation report released by the US Department of Labor, the US added 57,000 new jobs in June. However, given the relatively low number of recent jobless claims, it indicates that companies are not laying off workers at a rapid pace. Citi: Aluminum prices expected to bottom out in the short term and rise to $3,500 by the end of the year. Citi stated that aluminum prices are expected to hit a bottom within the next month and gradually increase to between $3,300 and $3,500 per ton between September and December. This forecast is based on multiple factors, including the Federal Reserve's dovish policy shift, declining real interest rates, improved demand outlook, and a continuous decline in visible inventory due to the consumption of inventory days. Recently, the decline in aluminum prices has mainly reflected weaker-than-expected demand, slowed inventory depletion, reduced political risks for GEO Group Inc, speculative unwinding of positions, and rising market expectations of increased future supply. In the past month, aluminum prices have fallen by about 20% from around $4,450 per ton, shaking the upward trend that has persisted for over a year. However, Citi believes that it is not suitable to short aluminum prices at the moment, as the market was already in a supply shortage state before the recent shocks, and new supply is not likely to be able to keep up with demand growth in a timely manner. The bank also pointed out that concerns about a rapid return of supply from the Middle East may be exaggerated. [Individual stock news] Analyst: Meta acknowledges AI progress falls short of expectations, but not raising the "white flag." Analyst Adam Button stated that news reports cited information from an all-staff meeting at Meta Platforms (META.US), where CEO Mark Zuckerberg admitted that the development speed of AI intelligence agents over the past four months did not meet expectations. Meta has been in the spotlight recently, following reports that the company is considering selling excess computing power, leading to speculation that it may be withdrawing from the race in the foundational AI model field. Meta has also experienced internal culture shocks due to layoffs and reassignments and has attempted to ease employee sentiments through relatively surface-level methods such as offering snacks (comfort) and hosting hackathons (inspiring vigor). Zuckerberg admitted at the meeting that the department restructuring "could have been more efficient"; executives were concerned earlier in the year that "AI actions were not fast enough." However, Zuckerberg does not seem ready to surrender yet, stating that the best outcomes of the restructuring "have not been achieved" and still believes that the long-term trend aligns with the restructuring direction. This does not sound like a surrender. After the latest media reports, Meta's stock price came under pressure but soon rebounded. Report: Tesla, Inc. controls AI costs, restricting employees to $200 weekly. According to reports, Tesla, Inc. recently informed employees that starting from July 6, the internal AI computing and model call spending limit is set at $200 per week, with excess requiring approval. Engineers' weekly AI call costs previously amounted to thousands of dollars. Over the past six months, the company has been promoting the development of its own AI platform "Bottle Rocket," integrating models from OpenAI, Anthropic, and xAI, and gradually shifting from decentralized usage to company-level control. However, as AI is being deployed in customer service, sales, and automation processes, cost pressures have quickly become apparent, leading the company to tighten its budget. This change reflects many companies transitioning from encouraging rapid AI expansion to controlling costs. Companies such as Meta, Uber, and Walmart Inc. have also tightened their AI budgets. For Tesla, Inc., this is significant because Musk has stressed that the company's future value depends on AI products like Robotaxi and OptimusSiasun Robot & Automation, rather than traditional car sales. Currently, Tesla, Inc.'s revenue has stagnated for two consecutive years. Anthropic reportedly in talks with Samsung for custom AI chip matters. According to reports, Anthropic has begun early development work on its in-house AI chip and is in discussions with Samsung Electronics regarding potential foundry cooperation. This move follows OpenAI's example, aimed at further controlling the costly computational infrastructure that supports its AI models. Alphabet Inc. Class C and Amazon.com, Inc. have successfully developed their own chips after years of investment; Meta and Microsoft Corporation have introduced in-house chips; OpenAI partnered with Broadcom Inc. in 2024 to design its own chip and released their first product, Jalapeo, last month. Insiders stated that Anthropic is currently in the stage of determining chip positioning, required functionalities, performance levels, and integration into servers or server clusters. The company has had discussions with multiple chip design firms but has not entered detailed design, testing, and manufacturing stages. Insiders indicate that Anthropic is considering using Samsung's 2-nanometer manufacturing process and advanced packaging technologies. [Major bank ratings] HSBC HOLDINGS: Lowered Netflix (NFLX.US) target price from $113 to $104; raised Intel Corporation (INTC.US) target price from $100 to $200.