On Tuesday, all three major indices closed higher, with the S&P 500 and Nasdaq reaching record highs, according to Zhitong Finance. The S&P 500 closed above 7,800 points for the first time. US Treasury Secretary Bessent insisted that the government's debt burden is manageable. Bessent sought to reassure investors, saying that a combination of economic growth and spending restraints would "soon" begin to change the US government's borrowing trajectory. During a fireside chat in Pennsylvania on Monday evening, he said the government would begin to "reverse this trend."
US Stocks
At the close, the Dow Jones Industrial Average rose 253.32 points, or 0.49%, to 51,521.22; the S&P 500 gained 45.03 points, or 0.58%, to 7,818.98; and the Nasdaq Composite added 122.48 points, or 0.45%, to 27,599.79. Memory chip stocks tumbled, with Seagate Technology (STX.US) falling 9%, Western Digital (WDC.US) dropping nearly 7%, Moderna (MRNA.US) declining 7.7%, and SK hynix (SKHY.US) sliding more than 6%. The Nasdaq Golden Dragon China Index closed up 0.3%, while Alibaba (BABA.US) fell more than 1%.
European Stocks
Germany's DAX 30 rose 197.98 points, or 0.78%, to 25,452.19; the UK's FTSE 100 gained 43.33 points, or 0.41%, to 10,541.27; France's CAC 40 added 30.97 points, or 0.40%, to 7,865.07; the Euro Stoxx 50 climbed 30.81 points, or 0.49%, to 6,272.95; Spain's IBEX 35 advanced 139.98 points, or 0.73%, to 19,439.68; and Italy's FTSE MIB rose 425.12 points, or 0.84%, to 51,243.50.
Asia-Pacific Stocks
The Nikkei 225 rose 1.05%, South Korea's KOSPI fell 0.89%, and Indonesia's Composite Index gained 1.21%.
Forex
The US Dollar Index, which measures the greenback against six major currencies, fell 0.33% on the day to close at 101.833. At the New York close, 1 euro traded at $1.1261, up from $1.1215 the previous session; 1 pound was at $1.3277, up from $1.3219; 1 dollar was at 158.12 yen, up from 158.00 yen; 1 dollar was at 0.8313 Swiss francs, up from 0.8307 Swiss francs; 1 dollar was at 1.4209 Canadian dollars, down from 1.4256 Canadian dollars; and 1 dollar was at 9.9861 Swedish kronor, down from 10.0403 Swedish kronor.
Cryptocurrencies
Bitcoin hovered near $85,000, last trading at $85,575; Ethereum fell 0.69% to $2,696.
Precious Metals
Spot gold was at $4,163.82 per ounce, and spot silver was at $61.364 per ounce.
Crude Oil
Light crude for November delivery on the New York Mercantile Exchange rose 1 cent to close at $89.44 per barrel, up 0.01%; London Brent crude for December delivery gained 26 cents to close at $100.58 per barrel, up 0.26%.
Macro News
Fed's Daly: AI, tariffs, and energy shocks may require further rate hikes if they persist. San Francisco Fed President Daly said chip demand driven by the AI boom could spread from high-end AI chips to the broader semiconductor market, with some firms already locking in memory chip supply in advance and even redesigning products to reduce chip usage. She believes this round of AI-driven price pressure may not be a one-time shock, and it could take longer than the one to three years the Fed typically assumes to ease. Daly said she fully supports the Fed's September rate hike, and whether further action is needed will depend on whether shocks such as AI, tariffs, and energy prices pushed up by Middle East conflicts subside; if these factors persist longer or compound, further tightening may be needed, but if the shocks are only temporary, additional hikes may not be necessary. Fed Governor Bowman: The Fed plans to reshape the bank regulatory system and reassess asset thresholds for stricter oversight. The Fed plans a comprehensive overhaul of the US bank regulatory system, shifting from the current model where regional Fed bank presidents oversee bank examinations to a new structure with clearer accountability to Washington headquarters. The Fed's top bank regulator unveiled the reform plan on Tuesday. Fed Vice Chair for Supervision Michelle Bowman said the reform will create five new bank supervision geographic regions, each led by a "regional lead." In remarks prepared for a St. Louis Fed conference, Bowman said the existing structure "weakens the crucial link between responsibility and accountability." Bowman said: "The Fed's supervisory function will be realigned to build a culture that emphasizes accountability and clear decision-making authority." Under the new supervisory arrangement, five regional leads will be responsible for all supervisory activities in their regions. However, actual examinations will still be carried out by staff at the regional Fed banks. Bowman also announced that the Fed will consider adjusting asset-size thresholds later this year, which determine when banks become subject to stricter regulations. JPMorgan CEO Dimon: Mythos model makes global cybersecurity risk "ten times higher." JPMorgan CEO Jamie Dimon said the AI model Mythos launched by Anthropic has significantly increased global cybersecurity risks. Dimon said Tuesday: "After Mythos appeared, the risk brought by AI has risen tenfold. AI has created vulnerabilities we didn't previously know about, and even before these technologies emerged, we were already worried about cybersecurity." He said AI is exposing banks to new types of security vulnerabilities that previously did not exist or had not yet been discovered. Dimon said: "The negative side is obviously what everyone sees with AI agents, Mythos, and other technologies that could cause trouble. That concern is reasonable and real." However, he said he would not get caught up in debates over whether AI constitutes an "existential threat." Dimon said: "I won't get hysterical over questions like whether this is an existential threat. What we're doing now is rolling up our sleeves and getting to work to figure out how to solve these problems." Institution: Bank of Canada may hike only twice, with first move likely delayed to early next year. Central 1 Credit Union expects the Bank of Canada may raise rates only twice in this cycle, with the first move not coming until early next year, notably less aggressive than current financial market pricing suggests. Central 1 economist Bryan Yu said Canada is currently in a period of high uncertainty, and the economic outlook is still changing rapidly. The sharp rise in US and Canadian bond yields, tariff effects, and volatile oil prices have all made policy judgments more difficult. Yu noted that Canada's core inflation remains near 2%, while economic growth may slow by late 2026 due to trade uncertainty. At the same time, higher bond yields could also dampen the recovery in the housing market, limiting the necessity and room for the Bank of Canada to tighten monetary policy further.
Individual Stock News
SpaceX plans to raise $40 billion to buy Nvidia chips. According to reports, SpaceX (SPCX.US) is seeking to raise $40 billion through a financing plan led by Apollo to purchase Nvidia (NVDA.US) chips. People familiar with the matter said the company plans to raise about $10 billion through bank loans and $30 billion through investment-grade debt to support its large chip order. The people said private capital group Apollo is expected to lead the transaction and help sell the debt to a broad group of investors. Bond group Pimco is one of a small group of lenders in talks to provide financing for the deal, according to the people. The transaction is expected to be completed in 2027. Apple is reportedly teaming up with LG to expand into smart home devices, planning door locks, cameras, and more. According to media reports citing people familiar with the matter, Apple (AAPL.US) plans to launch smart home devices such as smart doorbells and thermostats, and is partnering with LG Electronics to develop related accessories. These products will connect to an upgraded Apple HomePod mini and a new Apple TV set-top box to form a smart home ecosystem. Apple is expected to release these new products on October 13. Products developed in partnership with South Korea's LG will also include smart deadbolt locks and security cameras. Although the two companies co-developed these accessories, the products will carry the LG brand. LG will handle production and product support. Through this kind of cooperation arrangement with so-called "second-party suppliers," Apple can rapidly expand its ecosystem without bearing the full cost and complexity of producing and supporting various accessories.
Bank Ratings
TD Cowen: Cut American Express (AXP.US) price target from $338 to $335. BNP Paribas: Raised Microsoft (MSFT.US) price target from $549 to $604. Wells Fargo: Cut United Airlines (UAL.US) price target from $17 to $14.
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