Overnight US Stock Market | Fed Rate Hike Probability Drops Sharply, All Three Major Indexes Rise Over 1%, Bitcoin Breaks Above $80,000

According to Zhihui Finance APP, on Thursday, the three major indexes rose sharply, all up more than 1%. Federal Reserve Governor Waller sent a dovish policy signal. He stated that although U.S. inflation remains significantly above the Federal Reserve's 2% target, recent data shows that the disinflation process is reappearing. If data released over the next two weeks confirm that this trend is continuing, he is inclined to support keeping rates unchanged at the September FOMC meeting.

In addition, U.S. Vice President Vance stated that he believes the Federal Reserve should lower interest rates. He said that if you look at the inflation data, you can be fairly confident that a rate cut by the Fed is an "appropriate and responsible" move. Vance stated that current data supports Fed action to lower rates.

According to the CME FedWatch tool, the probability of a rate hike at the Federal Reserve's September 15–16 meeting has fallen sharply from about 63% the previous day to around 48%. The market will next focus on the U.S. non-farm payroll report to be released on Friday to look for more clues on the future path of Fed monetary policy.

[U.S. Stocks] At the close, the Dow Jones rose 624.04 points, or 1.18%, to 53,685.99 points; the S&P 500 rose 81.01 points, or 1.06%, to 7,747.61 points; the Nasdaq Composite rose 366.23 points, or 1.40%, to 26,584.06 points. Tesla (TSLA.US) rose 5.4%, Nvidia (NVDA.US) rose 1.8%, SpaceX (SPCX.US) rose 6.4%, and Trip.com (TCOM.US) fell 5%. The Nasdaq Golden Dragon China Index fell 0.83%.

[European Stocks] The German DAX30 rose 153.44 points, or 0.59%, to 25,996.78 points; the FTSE 100 in the UK rose 79.44 points, or 0.74%, to 10,835.89 points; the CAC40 in France rose 5.77 points, or 0.07%, to 8,286.40 points; the Euro Stoxx 50 index rose 17.65 points, or 0.28%, to 6,379.80 points; the Spanish IBEX35 index rose 218.77 points, or 1.11%, to 19,997.77 points; the Italian FTSE MIB index rose 462.40 points, or 0.89%, to 52,254.50 points.

[Asian Markets] Nikkei 225 fell 0.17%, while the Korean Composite Index rose 0.26%.

[U.S. Dollar Index] The U.S. Dollar Index, which measures the dollar against six major currencies, fell 0.69% on the day, closing at 98.910 in the late forex market. At the close in New York, €1 traded at $1.1635, up from $1.1586 in the previous session; £1 exchanged at $1.3539, up from $1.3487; $1 exchanged at ¥155.50, down from ¥158.94 the previous day; $1 exchanged at 0.8068 Swiss franc, down from 0.8133; $1 exchanged at 1.3788 Canadian dollar, down from 1.3841; $1 exchanged at 9.5365 Swedish krona, down from 9.6250.

[Cryptocurrency] Bitcoin rose more than 5%, trading at $81,457 at the time of publication; Ethereum also rose more than 5%, trading at $2,507.

[Crude Oil] The price of light crude futures for October delivery on the New York Mercantile Exchange rose $0.28 to $91.30 per barrel, an increase of 0.32%. The price of London Brent crude for November delivery fell $0.11 to $95.52 per barrel, down 0.12%.

[Precious Metals] Spot gold traded at $4,473.45 per ounce; spot silver traded at $66.968 per ounce.

[Macroeconomic News]

U.S. initial jobless claims edged up last week, labor market remains stable. The number of Americans filing initial claims for unemployment benefits rose slightly last week, indicating labor market conditions at the end of August did not change substantially. Department of Labor data released Thursday showed seasonally adjusted initial claims increased by 2,000 to 206,000 for the week ended August 29, slightly above economists’ expectations of 205,000. Since the start of this year, initial claims have remained within the relatively low range of 189,000 to 230,000, consistent with what economists call a "low hiring, low firing" labor market. Although domestic U.S. demand remains strong, employers remain reluctant to significantly increase headcount amid aggressive trade and immigration policies. A report from Challenger released Thursday showed that hiring plans announced by companies in the first eight months are up 37% from the same period in 2025. However, the report also notes, "These positions do not appear to be filling quickly."

U.S. July trade deficit widens to highest since early 2025. Driven by a surge in imports of computers and other technology equipment, the U.S. trade deficit widened sharply in July to the highest level since early 2025. Department of Commerce data released Thursday showed the July U.S. goods and services trade deficit expanded by 24.4% from the previous month to $88.6 billion, compared with an economist forecast median of $90.2 billion. Imports rose 2.8%, exports fell 2.1%. The report showed that imports of capital goods (including computers and accessories, semiconductors, and telecom equipment but excluding autos) surged 11.4%, the biggest monthly gain since 1993. The rapid growth in technology imports reflects the investing boom in artificial intelligence, which is a key driver of U.S. economic growth. Meanwhile, recent months have seen trade deficit fluctuations as the Iran war has boosted global demand for U.S. petroleum products and U.S. companies have worked to ease supply chain disruptions.

Fed's Waller: Rate hike in September will depend greatly on August CPI. Fed Governor Waller stated his next rate decision will "largely depend on" the August inflation data to be released next week, and that even a moderate increase in inflation could prompt him to support a rate hike at the upcoming policy meeting. He said, "If we continue to make progress towards the 2% target, I am willing to support holding the policy rate at its current level. But if inflation comes in hotter than anticipated, I will consider a rate increase." Waller described current policy as slightly restraining economic growth and added, "Rising inflation may not prompt me to support further tightening. If there is evidence that the trend towards the 2% target reverses in August, a modest policy adjustment will help ensure inflation returns to target." He also said, "Although inflation is still well above the FOMC’s 2% target, recent data show we are finally seeing some signs of cooling inflation."

U.S. PMI data indicates economic rebound in Q3. Data released today shows that the U.S. S&P Global August services PMI rose from 54.6 to 56.5, below a preliminary 56.8 but still a sharp increase, marking the highest since December 2024 as service sector activity grew strongly while manufacturing continued to expand but at a slower pace. According to survey data, U.S. economic performance currently leads other global economies. The ISM services PMI for August rose from 54.1 to 55.4, above the expected 54.1, the highest since February 2026. S&P Global Market Intelligence economist Usamah Bhatti said: “In August, the overall rate of growth in U.S. private sector business activity accelerated, signifying a clear gear shift in the economy. However, supply delays remain high, especially for manufacturers, and overall price pressures are still above historical averages.”

Media: Oman rejects Iran’s Hormuz Strait fee proposal. According to reports, Oman has quietly rejected Iran’s proposal to charge commercial vessels service fees in the Strait of Hormuz. Knowledgeable regional officials say Oman refused to agree to an environmental and safety services fee, even on a voluntary basis, despite prior claims by Iran’s Revolutionary Guard that a deal had been reached. A U.S. official said that even Tehran had not finalized the proposed revenue-sharing deal’s terms. Previously, after a meeting in Tehran between Iranian Foreign Minister Araghchi and Omani Foreign Minister Busaidi, Guard spokesperson Hussein claimed the two countries had reached an accord on waterway delineation and revenue sharing in the Strait of Hormuz.

U.S. July copper imports hit record high. Official data from the U.S. Department of Commerce released Thursday shows that, driven by traders continuing to import large amounts of copper ahead of potential tariffs, U.S. refined copper and copper alloy imports reached 225,094 tonnes in July—a record high. According to Trade Data Monitor, July’s volume released by the Department of Commerce is the highest of any month since 1990, up 78% month-on-month and 8% year-on-year.

Canada’s July trade surplus narrowed sharply to C$769 million. Data from Statistics Canada on Thursday showed that due to declines in gold and energy exports, especially to the U.S., Canada’s July trade surplus narrowed sharply to C$769 million, compared with economists’ expectations of C$3.18 billion. The total value of exports in July fell 2.3%, while imports rose 2.2%, pushing the trade surplus down sharply from C$4.2 billion in June. Unwrought gold, silver, platinum, and alloys exports fell 13.1%, as foreign purchases of Canadian-owned gold decreased along with shipments to the U.S. Statistics Canada noted that lower prices also contributed to reduced gold exports. Since peaking in February, exports for precious metals have fallen 9%.

[Individual Stock News]

Volkswagen to cut costs with a major overhaul, plans to cut 50,000 jobs and shutter four plants. Volkswagen announced a comprehensive reform plan to cut 50,000 jobs or more and potentially close several plants. This decision follows extended negotiations among management, labor unions, and the German state of Lower Saxony. Volkswagen Group said Thursday that this restructuring would be “the most far-reaching transformation plan in the company’s history.” Earlier this year, CEO Oliver Blume proposed a plan that could cut up to 100,000 jobs and close as many as four plants. Volkswagen’s supervisory board has already confirmed that about 500,000 units of excess capacity exist in Europe. The company noted that its plants in Emden, Zwickau, Hanover, and Neckarsulm currently have no competitive follow-up production projects over the next five to eight years, and said alternative uses are being explored. The plan is expected to cut about 50,000 positions throughout the group, including management roles.

Zuckerberg expressed opposition to establishing a national AI regulatory agency in a call with Trump. According to reports, Meta CEO Mark Zuckerberg opposed a plan to set up a nationwide AI regulatory authority in a phone call with U.S. President Trump last month. People familiar with the matter said Trump reached out to Zuckerberg during the week of August 17 to discuss the White House’s idea for a "FINRA-style" AI regulatory agency. This plan, proposed by Google DeepMind CEO Demis Hassabis, would establish an independent body similar to the Financial Industry Regulatory Authority to review and risk-test advanced AI models. Zuckerberg argued such an agency should reflect the Trump administration’s more relaxed stance on AI regulation but did not ask Trump to change his position. The White House said the Trump administration wants to strike a balance between promoting AI innovation and ensuring safety. The plan is still under consideration, and the White House is also weighing an industry-led self-regulation model. Previously, Zuckerberg has said overly stringent oversight could slow down AI model rollouts and affect U.S. competitiveness in AI.

OpenAI releases GPT-6 Astra model, says it may be close to AGI. OpenAI began the rollout of its new flagship GPT-6 Astra model on Thursday, claiming major advances in business tasks such as financial modeling and engineering design. The initial rollout is limited to selected organizations, including those part of OpenAI’s Daybreak Access cybersecurity project, and will later extend to ChatGPT Plus, Pro, Business and Enterprise users, as well as those using the model via API and Amazon Web Services. OpenAI said GPT-6 Astra had achieved significant improvements in computer operation, software programming, professional work, and reached top scores in FrontierMath Tier 1 math, ARC-AGI 3 reasoning, and ExploitBench cybersecurity benchmarks. OpenAI co-founder and president Greg Brockman stated that the timeline for achieving artificial general intelligence (AGI) has always involved ambiguity, but “looking back in a few years,” this milestone “might be this period, or this very model.” GPT-6 Astra is priced at $10 per million input tokens and $50 per million output tokens—2.5 times more expensive than the previous flagship GPT-5.6 Sol. OpenAI said the AI industry could eventually shift to charging per task instead of per token. At the launch event, Brockman said, "Welcome to the AGI era."

[Major Brokerage Ratings]

Oppenheimer: Raises Snowflake (SNOW.US) price target from $400 to $475

Melius Research: Raises Broadcom (AVGO.US) price target from $600 to $610