Pre-market market movements.
On Friday, September 25, US stock index futures were all higher ahead of the open. As of press time, Dow futures were up 0.41%, S&P 500 futures were up 0.40%, and Nasdaq futures were up 0.73%.
US chip stocks and optical communications stocks rallied in pre-market trading. ARM Holdings (ARM) jumped more than 4% after falling nearly 8% the previous day, SanDisk rose more than 2%, while AMD, SK Hynix, and Western Digital each gained nearly 2%. Micron Technology and Intel rose around 1%. Optical communications stocks surged in pre-market trading, with Coherent up nearly 3%, Lumentum and Marvell Technology up about 2%, and Corning and Applied Optoelectronics up nearly 2%.
As of press time, Germany's DAX index was up 0.83%, the UK's FTSE 100 was up 0.32%, France's CAC 40 was up 0.27%, and the Euro Stoxx 50 was up 0.82%.
As of press time, WTI crude oil fell 2.42% to $92.32 per barrel. Brent crude fell 1.67% to $104.82 per barrel.
Market News
The Federal Reserve plans to raise the threshold for bank supervision. Sources said the Fed is developing a plan to raise the asset threshold that triggers stricter supervision of large banks, a move that would exempt some lenders from costly additional regulatory burdens and could drive industry consolidation. The Fed is expected to soon propose recalibrating the thresholds at which banks must undergo balance sheet stress tests, liquidity, capital, and other stricter regulatory rules to reflect inflation and economic growth factors. Three of the people familiar with the matter said the Fed is expected to propose these adjustments later this year.
The Bank of Japan's inflation gauge accelerated, providing grounds for further rate hikes. The BOJ's measure of underlying inflation accelerated last month and has risen well above its target, providing justification for continuing to raise the benchmark interest rate. A report released by the BOJ on Friday showed that consumer prices excluding fresh food and special factors rose 2.6% year-on-year in August, accelerating from 2.3% in July. Special factors include government subsidies for gasoline and utilities. The gauge excluding fresh food, energy, and special factors rose to 1.8% from 1.6% in July.
Goldman Sachs Asset Management is underweight large cloud service providers and expects the bond issuance wave to continue. Goldman Sachs Asset Management believes that with a large influx of new debt into the market, the firm is currently underweight the companies with the largest AI-related borrowing and expects hyperscalers to continue issuing debt heavily. Lindsay Rosner, head of multi-sector fixed income investing at Goldman Sachs Asset Management, said in a media interview on Thursday: "We think hyperscalers will issue a lot of bonds. We are underweight the sector overall because we know there will be more supply." Rosner said: "This has been the case throughout the year, with new issuance replacing existing bonds."
The yen is poised for its largest single-day gain in more than two weeks. On Friday, the yen rose as much as 0.6% to 157.95 per dollar, the best performer among G10 currencies. Japanese Finance Minister Satsuki Katayama said that US President Donald Trump expressed concern about the yen's depreciation during his meeting with Japanese Prime Minister Sanae Takaichi this week; Takaichi responded that the yen's undervaluation is a problem. Katayama said she disclosed some details of the talks after consulting with the Prime Minister's Office and said Japan will continue to maintain close communication with US Treasury Secretary Scott Bessent on a range of issues including foreign exchange.
Wall Street faces a new interest rate landscape, with 5% US Treasury yields potentially becoming the norm or even a floor. As US Treasury yields break through one high after another, Wall Street and Washington are increasingly realizing a reality: this may not just be a bond market selloff, but a fundamental shift. Multiple factors have combined to push up the US government's borrowing costs, including $100-per-barrel oil, the AI investment boom, and the massive US budget deficit that has driven debt to a record $40 trillion. At the same time, the Fed remains determined to push down inflation that has persisted above target for years. Now, nearly all benchmark US Treasury yields are hovering around 5% or higher, with the five-year Treasury yield breaking above 5% on Wednesday for the first time since 2007.
El Nino stirs up palm oil: Indonesia and Malaysia production expected to drop 3% in 2027, prices may rise toward $1,226. Persistent drought caused by a strong El Nino will depress yields next year, and palm oil production in Indonesia and Malaysia is expected to decline in 2027, tightening global supply and pushing prices higher. According to the median estimate of a survey of seven analysts, combined production from the world's two largest palm oil producers is expected to fall by about 3%. Indonesia's output is expected to drop to 49 million tons, while Malaysia's is expected to fall to 19.5 million tons. Analysts said that combined with Indonesia's expanding palm-based biodiesel blending policy and declining yields from aging palm trees, the persistent drought could curb supply and push benchmark palm oil prices toward 5,000 ringgit ($1,226) per ton in 2027.
Individual Stock News
Costco (COST) Q4 revenue and profit beat expectations, but paid membership growth fell short. Costco released its fiscal 2026 fourth-quarter results for the period ended August 30 after the US market close on Thursday. Data showed that Costco's Q4 total revenue rose 11% year-on-year to $95.72 billion, beating market expectations; adjusted earnings per share came in at $6.57, also beating expectations, with tariff refunds contributing 15 cents to EPS. The data also showed that in the fourth quarter, membership fee revenue rose 7% to $1.85 billion, slightly above market expectations. Paid membership growth during the period fell short of expectations. The company's stock price moved little in after-hours trading. Executives said on a Thursday call with analysts that Costco's gasoline and travel businesses performed well, and home goods, small electronics, and beauty products also drove sales growth. Adjusted same-store sales rose 6.7% in the quarter, beating expectations.
Tesla (TSLA) officially announced the start of mass production and delivery of the Semi electric truck, reiterating its target of 50,000 units per year. On September 25, Tesla (TSLA) announced the start of mass production and delivery of the Semi electric truck. Tesla executives previously said at the Sparks, Nevada factory that deliveries of the Semi to the first customers would begin this week, nearly nine years after CEO Elon Musk first unveiled the electric heavy truck. The Semi is designed for long-haul freight, expanding Tesla from the electric sedan and SUV market into commercial freight. The company did not disclose production plans or pricing for the Semi but reiterated plans to produce 50,000 Semis per year at the Nevada factory.
Up to 7,000 yuan off, Tesla (TSLA) cuts prices again in a promotion. Tesla announced its latest promotional offers. For orders placed on or before October 31, 2026, the entire Model 3 lineup will receive a limited-time final payment reduction of 5,000 yuan, while some Model Y variants will receive a limited-time final payment reduction of 7,000 yuan, along with a combined benefit package offering a choice of one of three options: 5 years of zero interest, an 8,000 yuan limited-time paint option benefit, or special charging benefits. In addition, some Model 3 variants will enjoy an 8,000 yuan insurance subsidy. After applying these policy benefits, the Model 3 starts at 222,500 yuan, and the Model Y starts at 256,500 yuan.
Musk discloses the Colossus 2 expansion timeline: the number of NVIDIA (NVDA) chips could more than double by year-end. Elon Musk said that Colossus 2, the AI computing cluster built by his xAI company, could have more than double the number of NVIDIA (NVDA) chips by the end of this year compared with the current level. xAI has now been merged into SpaceX (SPCX.US). He is accelerating the expansion of computing capacity. Musk posted on X that Colossus 2 currently has 110,000 NVIDIA GB200 chips and 440,000 GB300 chips. He also said that 220,000 GB300 chips will be put into operation next week, with another 220,000 expected in November. If "lucky," another 220,000 chips could come online by the end of December.
Key Economic Data and Event Preview
Beijing time 20:30: US August durable goods orders month-on-month.
Beijing time 22:00: US September University of Michigan consumer sentiment index final reading.
Comments