Preview of US Stock Market | The three major stock index futures showed mixed results, with Brent crude oil rising above 97 dollars. Broadcom and Huayi Technology declined after their earnings reports.

Market Trends Before Opening 1. As of September 3 (Thursday) pre-market, the U.S. stock index futures are mixed. At the time of writing, Dow futures are up 0.20%, S&P 500 futures are up 0.07%, and Nasdaq futures are down 0.15%. 2. As of the time of writing, Germanys DAX index is up 0.08%, the UKs FTSE 100 is up 0.52%, Frances CAC40 is down 0.25%, and the Euro Stoxx 50 is down 0.07%. 3. As of the time of writing, WTI crude oil is up 1.92%, trading at $92.76 per barrel. Brent crude is up 1.45%, trading at $97.02 per barrel. Market News Bond market volatility and the "September curse" pose key tests for U.S. stocks! Barclays urges investors to lower risk exposure. Emmanuel Cau, Head of European Equity Strategy at Barclays PLC Sponsored ADR, stated that seasonal factors in September, the upcoming midterm elections, interest rate fluctuations, and impending AI-related IPOs are further reinforcing the rationale for stock investors to selectively reduce risk exposure. Among these, the rising bond yields are a major concern for stock investors. Market fears are growing that rising oil prices will push inflation higher, leading the yield on the 10-year U.S. Treasury bond to rise to 4.8%, nearing the 5% level typically seen as detrimental to stocks. Speculation that the Federal Reserve will be forced to raise interest rates is also increasing, which in turn pushes bond yields higher. He emphasized, "Its hard to see the stock market continue to rise if the bond market fails to achieve some degree of stability. I believe there is now a reason to selectively reduce beta risk exposure." "Cautious money" may ironically set the stage for an upward shift: Is the S&P 500 targeting 8000 points? In recent months, investors have adopted a defensive posture in response to market uncertainties. However, as caution becomes consensus, an ironic situation is emerging: the real pain trade for the market is actually moving upward. While overall positions remain net long, the directional risk exposure of "cautious money" is at its lowest level since the "Liberation Day" in April 2025. Data from Goldman Sachs Group, Inc. indicated that net leverage for U.S. long-short strategy funds fell to 47.6% last week, with the long-short ratio slightly below 1.6. Both indicators have reached their lowest levels in the past year. Bobby Molavi, Head of Execution Services for Goldman Sachs Group, Inc. in Europe, the Middle East, and Africa, remarked that current positions are "much cleaner than before." He believes that some froth has been removed, and the phenomenon of retail investors chasing gains seems to have weakened. The next two weeks will be crucial, with the likelihood of a rate hike in the Federal Reserve's meeting on September 15-16 now approaching 70%. U.S. non-farm payrolls and inflation data could either reinforce the current rationale or completely reverse the market narrative. However, in the context of current light positioning, if the market rebounds, fund managers may be forced to chase prices. Schroders global makes a rare shift: from "years of underweight" to "slight overweight," betting on a long-term rebound in U.S. Treasuries. Asset management giant Schroders global has recently increased its holdings in long-term U.S. Treasuries, arguing that after this round of sell-offs, yields have approached a temporary top. Johanna Kyrklund, Global Chief Investment Officer at Schroders global, stated regarding the 10-year U.S. Treasuries, "From a valuation perspective, the current levels are more attractive than before. Given the recent rise in yields, we believe it is appropriate to allocate a certain duration now." This judgment comes at a time when bond yields in major global markets have surged to multi-year highs. Kyrklund remarked, "We believe that the current levels are roughly at the top of the range of this round of yield fluctuations. Currently, the 4.80% to 5% range is of buying value for us, and we expect to see a tradable rebound, with yields potentially retreating to around 4.5%." Bank of America Corp: Friday's non-farm payrolls are unlikely to be "the final word"; the key to September's rate hike lies in the CPI. Amid recent sharp fluctuations in the bond market, investors are awaiting two sets of critical U.S. data that may influence the Federal Reserve's decision: the August non-farm payroll report, due on Friday, and the August consumer price index (CPI), to be released on September 11. However, in the eyes of Bank of America Corp, these two pieces of data do not carry the same weight in the Federal Reserve's meeting on September 15-16. The bank considers the non-farm payroll report more like an "appetizer," with the true "main course" determining whether the Federal Reserve raises rates being the CPI. Bank of America Corp analysts stated on Wednesday, "The non-farm payrolls are unlikely to be the decisive factor for a September rate hike. A significantly weak report could reduce the probability of a rate hike, but the CPI remains key in determining whether the Federal Reserve will follow through with a hike. We maintain our judgment of a September rate hike." The bank particularly highlighted that inflation remains a primary concern for the current Federal Reserve. Goldman Sachs Group, Inc. bullish on gold reaching $4,900 by year-end: Derivatives hedging could act as an "amplifier," driving prices higher. Goldman Sachs Group, Inc. predicts that the central banks' ongoing push for diversification of foreign exchange reserves will continue to provide structural support for gold, with prices expected to reach $4,900 per ounce by the end of 2026. The institution believes that central banks' increased purchases of gold are not a short-term phenomenon but a long-term adjustment of reserves. Analysts noted, "We continue to view the high levels of central bank gold accumulation as a multi-year trend, consistent with recent survey evidencecentral banks are diversifying reserves to hedge against geopolitical and financial risks." Goldman Sachs Group, Inc. expects central banks globally to buy an average of 50 tons of gold per month in 2026, significantly higher than the average of 17 tons per month before 2022. In addition, the demand for bullish gold options from investors is increasing, partly due to a desire to hedge against risks posed by large-scale changes in government policy on portfolios. The demand for derivatives not only provides extra buying power for gold but may also act as an amplifier: hedging purchases when prices rise could reinforce upward momentum, while hedging sales when prices fall could further depress prices. Stock Updates Short-term growth dims, long-term AI computing power blueprint shines! Major clients ignite an ASIC super cycle, Broadcom Inc. (AVGO.US) explodes with a $230 billion AI semiconductor outlook. Data shows that Broadcom Inc. reported revenues for the third quarter of $29.591 billion, a year-on-year increase of 86%, exceeding the market expectation of around $29 billion. Total revenue for AI semiconductors, including AI ASIC and Ethernet switching chips, reached $16.7 billion, a year-on-year increase of 221% and a quarter-on-quarter increase of 54%, surpassing the market expectation of $15.9 billion. Adjusted earnings per share were $3.32, up 96% year on year, beating the markets expectation of $3.23. The company's guidance for total revenue in the fourth quarter is $34.8 billion, slightly below market expectations of $35.1 billion, which is the most direct reason for Broadcom Inc.'s stock price pressure following the earnings report. However, during the earnings call, the company raised its guidance for AI business revenue for fiscal year 2026 from $56 billion to $58 billion; in fiscal year 2027, guaranteed supply is expected to double AI revenue to around $115 billion; fiscal year 2028 AI semiconductor revenue is expected to double again to reach $230 billion. The company also expects earnings per share for fiscal year 2028 to exceed $30, significantly higher than the consensus estimate being revised upwards to around $26.5. As of the time of writing, Broadcom Inc. fell over 3% in Thursday's pre-market trading. Hewlett Packard Enterprise Co. (HPE.US) Q3 earnings exceeded expectations, AI server and networking demand "explosive" but supply chain issues unsolved. The earnings report shows that Hewlett Packard Enterprise Co. achieved revenues of $12.21 billion in the third fiscal quarter, a year-on-year increase of 33.7%, exceeding analysts' previous expectations of $11.9 billion; the adjusted earnings per share were $1.11, far exceeding the market expectation of $0.93. The company stated that continued investments by cloud service providers and enterprise customers in AI, server upgrades, and data center capacity have driven strong demand for the companys high-performance servers and networking equipment. By business segment, the networking sector performed particularly well, with third-quarter revenues up 75% year on year to $2.89 billion. Of this, data center networking revenue was $382 million, up 112.2%; routing sales soared by 270%. Given the ongoing strong demand for AI, the company significantly raised its earnings expectations, projecting revenue growth for fiscal year 2026 to reach 34% to 37%, up from a previous forecast of 29% to 33%; adjusted earnings per share are expected to range between $3.75 and $3.85, compared to the previous expectation of $3.35 to $3.45. The company also raised its performance guidance for fiscal year 2027. However, because management warned that supply constraints continue to limit growth, as of the time of writing, Hewlett Packard Enterprise Co. fell over 4% in Thursday's pre-market trading. AI coding assistants ignite growth! Snowflake (SNOW.US) lavishly exceeded full-year guidance. The earnings report shows that Snowflake's total revenue in the second fiscal quarter ending in July had a year-on-year growth of 35% to $1.55 billion; product revenue increased 37% year on year to $1.49 billion, exceeding the market expectation of $1.42 billion. However, the remaining performance obligations (RPO), a measure of future contract amounts, stood at $9 billion, slightly below the market expectation of $9.37 billion. The AI product line was the biggest highlight of the quarter. The company revealed that its embedded AI programming assistant CoCo gained over 2,000 new enterprise customer accounts in the quarter, bringing the total number of accounts using it to 9,100. Management emphasized during the conference call that CoCos adoption rate is reflected not only in customer numbers but also in the accelerated consumption month-over-month, demonstrating that the AI feature has shifted from "trial" to actual production-level deployment. Furthermore, the company expects full-year product revenue to reach approximately $6.07 billion, an increase from the forecast given in May, and also higher than the market forecast of $5.86 billion. As of the time of writing, Snowflake soared over 24% in Thursday's pre-market trading. Net income soared 66% year on year; next-quarter guidance exceeds expectations but still isnt enough! U.S. NetApp (NTAP.US) plummeted after earnings, with investors closely watching free cash flow and sustainability of growth. For the first fiscal quarter ended July 31, 2026, U.S. NetApp reported revenues of $2.03 billion, a year-on-year increase of 30%, exceeding the market expectation of $1.84 billion. Excluding contributions from an additional week this quarter, year-on-year growth is about 26%, still significantly above market estimates. Adjusted earnings per share were $2.58, increasing by 66% from the same period last year, also far exceeding analysts' expectations of $2.12. U.S. NetApp emphasized in its earnings report that artificial intelligence (AI) has shifted from a "future vision" to an "enterprise necessity" and has become an important engine for the companys growth. Management disclosed that in the first fiscal quarter, the company secured approximately 350 AI and data lake modernization transactions. The company also substantially raised its guidance for the full year. However, since investors focused on declining free cash flow, one-off beneficial factors, and concerns that second-half growth may slow significantly, as of the time of writing, U.S. NetApp fell over 8% in Thursday's pre-market trading. AI security demand surges! Revenues soared 29% and losses narrowed, Netskope (NTSK.US) Q2 performance exceeded expectations. The earnings report shows that Netskope's second fiscal quarter revenue grew 29% year on year to $221 million, compared to $170.8 million in the same period last year, and also exceeded market expectations of $214.2 million. Losses narrowed year on year; the adjusted per share loss was $0.03, better than the market expectation of a $0.07 loss. Annual recurring revenue (ARR) grew 27% to $899 million, and remaining performance obligations (RPO) soared 36% to $1.35 billion. Gross margin also expanded from 75% in the same period last year to 77%. CEO Sam stated that the performance growth is attributed to "sustained differentiated organic innovation" and market demand for the Netskope One platform in "security, networking, analytics, and AI." The company raised its revenue guidance for fiscal year 2027 to $888 million to $892 million, with the midpoint exceeding analysts' expectations of $881 million. As of the time of writing, Netskope rose over 11% in Thursday's pre-market trading. Important Economic Data and Event Forecast 20:30 Beijing time: Initial jobless claims in the U.S. for the week ending August 29. 20:30 Beijing time: Federal Reserve Governor Waller's interview. 22:00 Beijing time: U.S. ISM Non-Manufacturing PMI for August. Earnings Forecast Friday morning: DocuSign (DOCU.US), UiPath (PATH.US), Zscaler (ZS.US).