The US stock market last week presented a surface picture of gains in the S&P 500 Index of 1.2% and the Nasdaq Composite Index of 2%, masking the intense volatility in the bond market and establishing a dual narrative of artificial intelligence versus interest rates. Despite the modest overall rise in equities, the 10-year US Treasury yield repeatedly pushed higher, reaching an intraday peak of 5.2297% on Friday, the highest level since 2007. Meanwhile, Microsoft (MSFT.US) rose 3.66% on the positive news of its new Copilot release, becoming the core driver of the technology sector. On the geopolitical front, Trump rejected Iran's proposal regarding the Strait of Hormuz, causing oil prices to rise again in Asian trading early Monday. This week's market focus will center on JOLTS job openings data, the PCE price index, the nonfarm payrolls report, Micron (MU.US) earnings, and the OpenAI DevDay developer conference, with AI industry developments and interest rate expectations remaining the key variables driving trading logic.
The three major US stock indices all closed higher on Friday, but performance among technology giants showed significant divergence. The S&P 500 Index rose 0.51% on Friday to 7,743.41 points; the Nasdaq Composite Index gained 0.48% to 27,068.72 points; and the Dow Jones Industrial Average advanced 0.93% to 51,828.62 points. Market fear eased somewhat, with the VIX Index falling 5.11% to 14.87. The Philadelphia Semiconductor Index rose about 1.4%, indicating broad strength in the semiconductor sector. Among the "Magnificent Seven," five rose and two fell: Microsoft gained 3.66%, Apple (AAPL.US) rose 1.53%, Alphabet Class A shares (GOOGL.US) added 0.46%, Nvidia (NVDA.US) edged up 0.22%, and Amazon (AMZN.US) rose 0.12%; Tesla (TSLA.US) declined 1.54%, and Meta (META.US) dropped 3.33%. Notably, despite Meta's single-day pullback, its cumulative gain for the full week still reached approximately 13%, demonstrating strong medium-term momentum. In contrast, Chinese concept stocks showed weakness, with the Nasdaq Golden Dragon China Index falling 0.64% to 5,687.91 points.
Pressure in the bond market continued to build, with macro asset correlations becoming significantly pronounced. The 2-year US Treasury yield closed at 4.81%, and the 10-year US Treasury yield closed at approximately 5.16%, but it had risen to as high as 5.2297% intraday, the highest level since 2007; the 30-year US Treasury yield touched a peak of 5.5319%, the highest on record since 2004. In the energy market, WTI crude fell 2.3% to $92.41 per barrel, and Brent crude declined 2.1% to $104.32 per barrel. Precious metals were relatively stable, with spot gold rising 0.31% to $4,291.25 per ounce. The cryptocurrency market remained range-bound in Asian trading early Monday, with Bitcoin fluctuating around $84,000 and Ethereum priced at approximately $2,690.
Data compiled by Woofun AI shows that the surge in bond market yields stands in sharp contrast to the technology-led rally in stocks, reflecting the market's adaptation to and divergence over a high interest rate environment. AI industry catalysts and geopolitical risks are jointly driving market volatility. The new version of Copilot added code generation and persistent AI agent features, driving Microsoft up 3.66%; Qualcomm (QCOM.US) rose 4%, Dell (DELL.US) gained 5%, and Akamai (AKAM.US) advanced 3.2%. Akamai had previously signed an $11.6 billion cloud computing contract with Anthropic lasting seven years, highlighting long-term demand for AI infrastructure. The Muse project directed market attention toward agents, CPUs, and storage, while Copilot reinforced trading enthusiasm for enterprise software. US August core capital goods orders came in stronger than expected, with investment in computers and electronic equipment remaining resilient, indicating that AI capital expenditure continues to support corporate equipment demand.
Bond market volatility intensified, with the MOVE Index rising 30% for the week, the largest single-week increase since April 2025. The Federal Reserve just began its first rate hike in three years in September, and interest rate futures show roughly a 66% probability of at least another 25 basis point hike in October. On the geopolitical front, Iran proposed reopening the Strait of Hormuz within seven days and suspending regional conflicts, but Trump publicly rejected the plan on Saturday. Trump said on Sunday that he expected US negotiators to continue engaging with the Iranian side this week, causing international oil prices to rise more than 1% again in Asian trading early Monday. However, high-end AI chips did not enter this round of negotiations, with Greer emphasizing that high-performance US chips requiring export licenses are related to America's competitive advantage in AI, and no substantive discussions have been held. New details focused mainly on critical minerals, ordinary technology products, and supply chain rules.
This week's schedule is packed: on Tuesday, attention will be on US August job openings data (JOLTS) and OpenAI DevDay, the latter held in San Francisco focusing on Agents, APIs, and developer tools; Wednesday is the most critical, with the release of US August personal income and spending data (including core PCE), the ADP September private employment report, and Micron's fiscal fourth quarter 2026 earnings after the close, covering HBM, DRAM, and NAND pricing, gross margins, and next-quarter guidance; on Friday, the September nonfarm payrolls report will be released, with new job creation, the unemployment rate, and wage growth directly affecting pricing for the next rate decision. With long-end rates remaining above 5%, technology stock valuations increasingly depend on real orders and earnings delivery, and high-valuation companies lacking clear growth catalysts face greater pressure.
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