Overnight US stocks | August's non-farm payrolls significantly exceeded expectations, strengthening bets on a Fed interest rate hike. All three major indices fell, while SanDisk (SNDK.US) rose by 11.9%.

On Friday, all three major indices closed lower, and the yield on the 2-year U.S. Treasury reached a new high since January 2025. In August, the U.S. non-farm payrolls increased by 162,000, significantly above the Dow Jones economists' forecast of 53,000. The unemployment rate remained at 4.1%, aligning with market expectations. In addition to the August job growth figures, the employment data for June and July were both revised upward. The Dow Jones fell 0.3% this week; the S&P 500 rose 0.1%, and the Nasdaq Composite saw a weekly gain of 0.4%. The U.S. markets will be closed on Monday due to the holiday. As of the close, the Dow Jones Industrial Average fell 272.51 points, or 0.51%, to 53,413.60; the S&P 500 dropped 29.29 points, or 0.38%, to 7,718.42; and the Nasdaq Composite decreased by 77.07 points, or 0.29%, to 26,506.99. Tesla, Inc. (TSLA.US) fell 5.92%, Apple Inc. (AAPL.US) declined 2.51%, and Microsoft Corporation (MSFT.US) was down 2.04%. The AI chip sector strengthened, with SanDisk (SNDK.US) up 11.9%, SK Hynix (SKHY.US) rising 8.14%, Micron Technology, Inc. (MU.US) increasing by 6.1%, and Intel Corporation (INTC.US) gaining 4.51%. The Nasdaq China Golden Dragon Index increased by 0.89%. XPeng, Inc. ADR Sponsored Class A (XPEV.US) dropped 1.75%, Baidu Inc Sponsored ADR Class A (BIDU.US) rose 4.07%, and Alibaba Group Holding Limited Sponsored ADR (BABA.US) was up 1.26%. In European markets, the DAX 30 index in Germany rose by 44.63 points, or 0.17%, to 26,052.20; the UK FTSE 100 index gained 0.25 points, remaining nearly unchanged at 10,831.77; the French CAC 40 index fell by 7.63 points, or 0.09%, to 8,278.77; the Euro Stoxx 50 index increased by 11.86 points, or 0.19%, to 6,394.45; the Spanish IBEX 35 index rose by 44.81 points, or 0.22%, to 20,045.01; while the Italian FTSE MIB index decreased by 139.97 points, or 0.27%, to 52,105.50. In Asian markets, the Nikkei 225 index increased by 1.26%, and the Korean Composite Index rose by 1.64%. The U.S. dollar index, which measures the dollar against six major currencies, rose by 0.27% that day, closing at 99.177. As of the end of trading in New York, 1 euro was exchanged for 1.1611 dollars, down from the previous day's 1.1635 dollars; 1 pound was traded at 1.3514 dollars, lower than the previous day's 1.3539 dollars. 1 dollar was exchanged for 156.22 yen, up from the previous days 155.50 yen; 1 dollar was worth 0.8102 Swiss francs, higher than the previous days 0.8068 francs; 1 dollar equated to 1.3839 Canadian dollars, up from the previous day's 1.3788 dollars; and 1 dollar was exchanged for 9.5775 Swedish kronor, higher than 9.5365 kronor the day before. In the cryptocurrency market, Bitcoin fell by 1.8%, trading at 79,694.5 yuan; Ethereum decreased by over 1.7%, at 2,452 dollars. In commodities, the October light crude oil futures price at the New York Mercantile Exchange rose by 18 cents, closing at 91.48 dollars per barrel, an increase of 0.2%; while the November futures for Brent crude oil rose by 76 cents, closing at 96.28 dollars per barrel, up by 0.8%. In precious metals, spot gold fell by 0.94% to 4,431.54 dollars per ounce; and spot silver dropped by 1.12% to 66.218 dollars per ounce. In macro news: Trump said the Iran conflict is not a big deal for the U.S., stating that we are not currently in a state of war. U.S. President Trump described the ongoing conflict between the U.S. and Iran, which has lasted over six months, as insignificant, and he would not classify it as a major war. Trump stated on Friday that it is a "military conflict," but "not a big deal for us," noting that neither side is engaged in ongoing combat. He responded to Vice President Pence's earlier remarks about not referring to it as a war, asserting that in many places, that's indeed the case, and stated that the U.S. is only conducting intermittent strikes. Trump compared the 18 American military fatalities in this conflict to the Vietnam and Afghanistan wars, stating, losing one person is too many, while those two wars resulted in tens of thousands of U.S. military casualties. He also noted that the U.S. has achieved significant outcomes regarding Iran. Polls indicate that the American public's approval of Trump's handling of the Iran conflict is low. The conflict's impact on rising energy prices places pressure on the Republican Party to maintain control of Congress in the midterm elections in November. Trump administration officials previous remarks downplaying the impact of the conflict have also faced criticism from Democrats. Bessent: Oil prices may drop to 40 dollars after the Iran conflict ends, and U.S. Treasury yields will fall. U.S. Treasury Secretary Bessent observed that oil prices could significantly drop to 40 dollars per barrel after the Iran conflict ends, as increased oil supplies will drive down Treasury yields. Bessent mentioned that once the Iran conflict concludes, there will likely be an oil supply surplus, suggesting prices could see 50 or 40 dollars per barrel as a large volume of supplies comes onto the market. The recent U.S.-Iran military conflict had pushed Brent crude above 95 dollars, while WTI crude approached 90 dollars. Bessent added that the recent rise in energy prices has heightened market concerns about inflation, leading to an increase in global benchmark bond yields; the yield on 10-year U.S. Treasury bonds hit its highest level of 2023 this week. Bessent also downplayed the impact of the Norwegian Sovereign Wealth Fund's plans to reduce its holdings in U.S. Treasuries, stating that the fund simply aims to diversify its investments in other U.S. assets, including bonds related to Fannie Mae and Freddie Mac. Strong employment data reinforces bets on Fed rate hikes, but no widespread risk aversion on Wall Street. The stronger-than-expected U.S. August employment data has reignited market bets that the Federal Reserve may raise interest rates, but risk assets on Wall Street have shown no signs of significant panic. Data indicates that the job market has gained resilience, leading traders to raise their expectations for a rate hike at the Fed's meeting on September 16. U.S. Treasuries faced selling pressure, the dollar strengthened, and the S&P 500 dropped on Friday, yet still recorded a weekly gain. Unlike previous interest rate hikes that often triggered a flight of funds, the current bond market adjustment has not spread to other risk assets. Credit spreads remain low, and pressures in corporate bonds and equity markets are limited. JPMorgan stated that liquidity in U.S. Treasuries has visibly deteriorated, but the corporate bond ETF and equity index futures markets have yet to show similar tightness. The resilience in the market largely stems from economic growth and corporate earnings, particularly as investments in AI continue to drive significant capital expenditures in tech companies. Analysts suggest that the current focus is more on whether yields will rise rapidly rather than on the employment data itself. Future market attention will turn to inflation data and whether the Fed will reconsider its rate hike path due to inflation pressures. If yields rise rapidly, investors may be forced to reduce their risk exposure. Fed's Harker: Inflation remains too high; now is the time to act. Fed's Harker stated that after discussions with businesses in the Fourth District, economic data and corporate feedback indicate that the current monetary policy is not restrictive enough, and inflation remains too high, necessitating action. Harker mentioned that the head of a medium-sized manufacturing company in northeastern Ohio told her that even though their industry is typically affected by high-interest rates, they believe the Federal Open Market Committee (FOMC) should raise rates due to significant increases in input costs. She stated that inflation is currently above 3%, the labor market is stable, and close to her estimate of maximum employment levels, with Fourth District businesses also reflecting ongoing cost increases and facing difficult choices. Harker noted that economic data and corporate feedback send the same signal: the policy is not sufficiently restrictive, and the longer inflation remains above target, the harder it will be to bring it back down. She expressed that there is a strong sentiment now that it's time to take action. U.S. Justice Department pauses antitrust cooperation with Canadian government, trade dispute escalates. Reports indicate that the U.S. Department of Justice's antitrust division was asked this week to suspend all cooperation with the Canadian government, marking the latest development amid escalating trade disputes between the two countries. Linda Marshall, head of international affairs at the DOJ's antitrust division, requested that officials cease collaboration with Canadian counterparts on case and policy matters but did not specify the reasons. DOJ officials noted that this directive is quite rare, as the U.S. typically maintains cooperation with other countries' competition regulators, even when the governmental relationships are not close. U.S. and Canadian antitrust agencies had long collaborated on issues such as alleged price manipulation in auto parts, air cargo investigations, and merger reviews in the tech and aerospace sectors. This suspension of cooperation comes as the U.S.-Canada trade dispute continues to heat up. Following a breakdown in trade talks last month, the Trump administration imposed a 50% tariff on 20 billion dollars of Canadian goods, after which Canadian Prime Minister Mark Carney retaliated with similar tariffs on some U.S. goods. The U.S. Justice Department and the White House have yet to comment on this matter. In individual stock news: The S&P index adjustment list for September has been announced, with several tech stocks entering the core index. S&P Dow Jones Indices announced adjustments to several index components, affecting the S&P 100, S&P 500, and S&P MidCap 400 indices, which will take effect on September 21, 2026. The S&P 100 index will add Palo Alto Networks (PANW.US), Arista Networks (ANET.US), SanDisk (SNDK.US), and Dell Technologies, Inc. Class C (DELL.US), while NIKE, Inc. Class B (NKE.US), Colgate (CL.US), and Honeywell Aerospace (HONA.US) will be removed. For the S&P 500 index, Bloom Energy (BE.US), Illumina (ILMN.US), and Everpure (P.US) will be added. For the S&P MidCap 400 index, HubSpot (HUBS.US), AGNC Investment Corp. (AGNC.US), Corcept Therapeutics Incorporated (CORT.US), and Brinker International, Inc. (EAT.US) will become new components. Tesla, Inc.'s Cybercab update fell short of expectations, and the stock price dropped nearly 6%. Tesla, Inc. (TSLA.US) saw its stock price fall nearly 6% on Friday, as the highly anticipated Cybercab autonomous taxi update did not meet Wall Street's expectations, raising investor concerns about its competitiveness against Waymo in the U.S. autonomous taxi market. Tesla held the Cybercab event in Austin, Texas, on Thursday, inviting only guests and not live-streaming the event, and CEO Musk did not attend. The company stated that users could experience the Cybercab autonomous driving service in a limited area in Austin through the Tesla Robotaxi app. A capital markets analyst at the Royal Bank of Canada noted that the event revealed limited new information, and critical issues related to pricing, production pace, and regulatory approvals remain unresolved. Wells Fargo & Company analysts also described the Cybercab launch event as disappointing, pointing out that Tesla's Austin operations face early operational issues. Additionally, the U.S. National Highway Traffic Safety Administration has initiated a review inquiry to confirm whether the Cybercab complies with federal safety standards and has completed the necessary safety certifications. Tesla's stock had risen by 5.4% the day before the event. Anthropic prepares for IPO; Morgan Stanley and Goldman Sachs Group, Inc. may play key underwriting roles. Reports suggest that AI company Anthropic is nearing the selection of Morgan Stanley (MS.US) and Goldman Sachs Group, Inc. (GS.US) for key roles in its Initial Public Offering (IPO) and plans to announce IPO documents as soon as next week. According to sources familiar with the matter, Morgan Stanley is currently leading as the lead underwriter, responsible for the IPO's strategic advisory; Goldman Sachs Group, Inc. is expected to act as the stabilizing agent, ensuring stability in initial trading. JPMorgan (JPM.US), Citigroup (C.US), and Barclays (BCS.US) are also expected to play important roles in the transaction. Anthropic expects to go public in New York by late September or early October, and this IPO will test investor demand for rapidly growing AI firms.