Preview of US Stock Market | All three major stock index futures fell, Brent crude oil approached $92, U.S. Treasury yields rose, and tech stocks dropped sharply in pre-market trading.

Pre-Market Market Trends 1. As of September 1 (Tuesday) pre-market, U.S. stock futures are falling across the board. At the time of writing, Dow futures are down 0.48%, S&P 500 futures are down 0.43%, and Nasdaq futures are down 0.93%. 2. As of the time of writing, Germanys DAX index is down 1.08%, the UK's FTSE 100 index is down 0.67%, Frances CAC 40 index is down 0.31%, and the EURO STOXX 50 index is down 0.59%. 3. As of the time of writing, WTI crude oil is up 2.03%, priced at $87.50 per barrel. Brent crude is up 3.89%, priced at $91.81 per barrel. Market News After a month of relative calm, the U.S. and Iran have engaged in hostilities again, causing international oil prices and U.S. Treasury yields to rise. The renewed conflict has raised market concerns. Driven by higher international oil prices and expectations that the Federal Reserve will raise interest rates to curb inflation, as of the time of writing, the 10-year U.S. Treasury yield has risen by more than 2 basis points to 4.782%, the highest level since January of this year; the 30-year U.S. Treasury yield has also risen by more than 2 basis points to 5.273%; the 2-year U.S. Treasury yield, which is sensitive to monetary policy, stands at 4.35%. Money market data shows that the market currently believes there is nearly a 70% chance that the Federal Reserve will raise the benchmark rate by 25 basis points on September 16. The Treasury Departments buying support is only a drop in the bucket! A wave of corporate bond issuance amounting to $215 billion is expected in September, which may completely offset the benefits of Treasury purchases. Although Treasury Secretary Janet Yellen announced last month an expansion of buybacks for older bonds to counter rising yields, shocking the market, many investors still do not expect yields to reverse sustainably. Following a record issuance in August, September's anticipated corporate bond issuance of $215 billion will negate any impact from Treasury purchases. Simultaneously, virtually no one expects that worries over the U.S. fiscal deficit, which has suppressed government bonds, will dissipate in the short term. Meanwhile, the Federal Reserve's September meeting will test Chairman Kevin Warsh's resolve to take action on interest rates in the face of stubborn inflation; if the Federal Reserve hesitates in this matter, a sell-off in long-term Treasury bonds is expected to intensify. Longer-dated bonds are more susceptible to inflation concerns, so signs that the Federal Reserve is keeping rates unchanged amid rising consumer prices would give investors further reasons to avoid the struggling 30-year Treasury bonds. Warsh has placed interest rate hikes on the agenda, but the market may be betting too quickly. A few words from Warsh at the Jackson Hole annual meeting quickly changed the markets expectations for the U.S. interest rate path. Before Warsh's speech, the market believed the Federal Reserve would likely wait until December to raise rates; however, after his comments, the probability of a hike at the September meeting surged. Nonetheless, the markets bets on a rate hike may be premature. The Federal Reserve will receive a batch of critical economic data before making any final decisions, and the current performance of inflation and employment does not form a clear consensus for an urgent need to raise rates. The job market will be one of the most vital areas to observe. U.S. non-farm payroll data has shown weakness for three consecutive months. If this weeks employment data continues to weaken, it will further diminish the Federal Reserves case for tightening policy immediately. Inflation data is equally crucial. In July, the U.S. PCE price index rose by 3.7% year-on-year, and core PCE rose by 3.3%; however, the Dallas Fed's measure, which excludes extreme price fluctuations, is only at 2.3%, already close to the 2% policy target. Before the September meeting, the Federal Reserve will also receive a series of data on CPI, PPI, and employment. If any clear signs of cooling appear, current pricing for rate hikes may quickly decline. Castle Securities raises the alarm: Septembers curse combined with cheap options leads to a drastic deterioration in short-term risk-return for U.S. stocks. September is typically the worst-performing month for U.S. stocks, with the S&P 500 index showing the lowest average monthly return for the year. Currently, option prices are at their cheapest levels of the year the combination makes buying downside protection an attractive risk-reward proposition. This is the core viewpoint of Scott Rubner, head of equity and equity derivatives strategy at Castle Securities, in a report. Rubner noted that the bullish pattern that drove the S&P 500 to a historical high in August is changing. He pointed to the earnings calendar, stock buyback prospects, seasonal factors, and retail trading patterns as reasons for caution. Overall, they alter the short-term asymmetries. The catalysts for upward movement are becoming less obvious, while the catalysts for downward movement are steadily increasing. Warsh's hawkish stance shakes up the market! JP Morgan temporarily abandons its bullish view on U.S. stocks and adopts a cautious wait-and-see approach for the coming weeks. Following Fed Chairman Warsh's hawkish remarks last week, the market has significantly increased its bets on further rate hikes this year, making the uncertainty in interest rate prospects one of the primary pressures faced by U.S. stocks in the short term. Consequently, JPMorgan's trading team has temporarily abandoned its previous bullish stance on U.S. stocks and is now adopting a cautious attitude towards the market's movement in the upcoming weeks. However, JPMorgan emphasizes that this does not mean it has turned bearish on U.S. stocks. The firm believes U.S. economic data and corporate earnings still provide support, and the fundamentals of the stock market remain robust; rather, various short-term uncertainties may push U.S. stocks into a volatile phase before the Federal Reserve announces its next interest rate decision on September 16. Stock News U.S. tech stocks slide before the market opens. As of the time of writing on Tuesday pre-market, SanDisk Corporation (SNDK.US) is down over 3%, Micron Technology, Inc. (MU.US), SK Hynix (SKHY.US), Seagate Technology Holdings PLC (STX.US), Western Digital Corporation (WDC.US), and Intel Corporation (INTC.US) are all down over 2%, AMD (AMD.US) and Oracle Corporation (ORCL.US) are down nearly 2%, while Qualcomm (QCOM.US), Amazon.com, Inc. (AMZN.US), SpaceX (SPCX.US), Broadcom Inc. (AVGO.US), NVIDIA Corporation (NVDA.US), Microsoft Corporation (MSFT.US), and Meta Platforms, Inc. (META.US) are all down over 1%. Optical communication stocks are also generally down, with Marvell Technology, Inc. (MRVL.US) down nearly 3%, Astera Labs (ALAB.US) and Corning Inc. (GLW.US) down over 2%, and Coherent (COHR.US), Lumentum (LITE.US), Credo Technology (CRDO.US), and Nokia Oyj Sponsored ADR (NOK.US) down nearly 2%. Tesla, Inc. (TSLA.US) faces contrasting fortunes in the European auto market: registrations in France soar 279% in August, while they plummet 79% in Norway. In August, Tesla, Inc. showed diverse vehicle registration data across several European markets: registration numbers surged significantly in France and Denmark, while Norway and Sweden experienced notable declines. According to local automotive industry organizations, Tesla, Inc.'s new car registrations (commonly regarded as a leading indicator of sales) in France skyrocketed by 279%, while in Denmark, they grew by 104%. In contrast, Norway saw registrations drop by 79% year-on-year, with Sweden declining by 41%. After two consecutive years of declining annual sales, this year has seen a resurgence in Tesla, Inc.'s sales in the European market, mainly due to last year's low comparison base, rising fuel prices, government purchase incentives, and the sustained growth in electric vehicle demand. Registration data from the UK and Germany, the two largest automotive markets in Europe, is expected to be released later this week. Amazon.com, Inc. (AMZN.US) faces allegations of manipulating auctions! It is being sued jointly by the FTC and 22 states, potentially facing massive civil fines. The U.S. Federal Trade Commission (FTC) and various states have jointly sued Amazon.com, Inc., accusing the e-commerce giant of systematically overcharging advertisers by more than $20 billion since 2019. The lawsuit claims that Amazon.com, Inc. misled 1.2 million advertisers, including over 500,000 small and medium-sized enterprises, regarding the pricing and terms of its so-called sponsored listings (the products users see at the top when searching in its online marketplace). The FTC, responsible for enforcing antitrust and consumer protection laws, and 22 state attorneys general allege that Amazon.com, Inc. manipulated the auction process used to set ad prices on its platform in violation of the law. This lawsuit could lead to billions of dollars in civil fines. Broadcom Inc. (AVGO.US) unveils its latest developments in private AI cloud and agent governance at the VMware Explore 2026 conference, accelerating the implementation of enterprise-level AI. At the VMware Explore 2026 conference held in Las Vegas, Broadcom Inc. highlighted its latest initiatives in AI agent governance, open-source security, and data sovereignty. The semiconductor giant officially launched the VMware private AI cloud, providing enterprises with a path to production-readiness, allowing them to securely build, run, and govern inference loads, agent applications, and traditional enterprise workloads on a unified private cloud platform. This means that companies can now run AI production tasks in local environments. Additionally, Broadcom Inc. launched VMware AI Factory as the software-defined foundation for its private AI cloud. The company also introduced several new solutions for controlling and governing AI agent behavior, including AgentMinder, VMware vDefend, and VMware Avi load balancer. Novartis AG Sponsored ADR (NVS.US) faces mixed news regarding its neuroimmunology pipeline: patient deaths led to the suspension of CAR-T clinical trials, while late-stage trials for MS oral medication show success. Novartis AG Sponsored ADR announced the suspension of eight clinical trials for experimental therapies targeting autoimmune and neurological diseases at the end of August, after three patient deaths. This experimental therapy is known as CAR-T cell immunotherapy. However, Novartis AG Sponsored ADR received positive news from another front. The company's experimental oral medication for multiple sclerosis achieved success in two late-stage clinical trials, with the potential to become a new oral treatment for this central nervous system autoimmune disease. The trials showed that patients treated with remibrutinib had reduced relapse rates and brain lesions compared to those treated with teriflunomide, and no liver safety signals were observed. Important Economic Data and Event Forecasts 22:00 Beijing time: U.S. August ISM Manufacturing PMI 22:00 Beijing time: U.S. July JOLTs Job Openings (in thousands) Earnings Forecasts Wednesday morning: Dell Technologies, Inc. Class C (DELL.US), Palo Alto Networks (PANW.US), Credo Technology (CRDO.US), MongoDB (MDB.US), Gitlab (GTLB.US) Wednesday pre-market: Yatsen Holding Ltd. ADR Class A (YSG.US)