Preview of US Stock Market | All three major stock index futures rose together. Chip stocks and optical communication stocks rallied in pre-market trading. ARM (ARM.US) gained over 4%.

Pre-market Market Movements 1. On Friday, September 25, U.S. stock index futures rose across the board in pre-market trading. 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%. U.S. chip stocks and optical communication stocks rallied in pre-market trading. ARM rose over 4% after falling nearly 8% yesterday, SanDisk gained over 2%, while AMD, SK Hynix, and Western Digital Corporation rose nearly 2%. Micron Technology, Inc. and Intel Corporation gained around 1%. Optical communication stocks surged in pre-market trading, with Coherent up nearly 3%, Lumentum and Marvell Technology, Inc. up about 2%, and Corning Inc and Applied Optoelectronics, Inc. up nearly 2%. 2. As of press time, Germany's DAX index was up 0.83%, the U.K.'s FTSE 100 was up 0.32%, France's CAC 40 was up 0.27%, and the Euro Stoxx 50 was up 0.82%. 3. 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 Fed plans to raise bank supervision threshold. Sources say the Fed is drafting 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 costs and could drive industry consolidation. The Fed is expected to soon propose recalibrating the thresholds at which banks become subject to 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. Bank of Japan's inflation gauge accelerates, providing grounds for further rate hikes. The Bank of Japan's measure of underlying inflation accelerated last month and is now well above target, providing grounds for continued increases in the benchmark interest rate. A report released by the BOJ on Friday showed that consumer prices (CPI) 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 Group, Inc. Asset Management underweight large cloud service providers, expects bond issuance wave to continue. Goldman Sachs Group, Inc. Asset Management believes that with a flood of new debt hitting the market, it is currently underweight the companies borrowing the most in the AI sector and expects hyperscalers to continue issuing large amounts of debt. Lindsay Rosner, head of multi-sector fixed income investing at Goldman Sachs Group, Inc. 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." Yen poised for biggest single-day gain in over 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 U.S. President 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 U.S. Treasury Secretary Bessent on a range of issues including foreign exchange. Wall Street faces a new interest rate paradigm, with 5% Treasury yields potentially becoming the norm or even a floor. As U.S. 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 U.S. government's borrowing costs, including $100-per-barrel oil, the AI investment boom, and the massive U.S. budget deficit that has driven debt to a record $40 trillion. Meanwhile, the Fed remains determined to push down inflation that has persistently exceeded target for years. Today, nearly all benchmark U.S. 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 Nio disrupts palm oil: Indonesia and Malaysia output expected to fall 3% in 2027, prices may rise toward $1,226. Persistent drought caused by a strong El Nio will depress yields next year, with palm oil production in Indonesia and Malaysia 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 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 say 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.US) Q4 revenue and profit beat expectations, paid membership growth missed expectations. Costco reported fiscal 2026 fourth-quarter results for the period ended August 30 after Thursday's U.S. market close. Data showed 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 increased 7% to $1.85 billion, slightly above market expectations. Paid membership growth during the period was below expectations. The company's stock moved little in after-hours trading. Executives said on a Thursday call with analysts that Costco's gasoline and travel businesses performed well, while home goods, small electronics, and beauty products also drove sales growth. Adjusted same-store sales rose 6.7% in the quarter, beating expectations. Tesla, Inc. (TSLA.US) officially announces Semi electric truck begins mass production deliveries, reiterates 50,000 annual production target. On September 25, Tesla, Inc. (TSLA.US) announced that the Semi electric truck has begun mass production deliveries. Tesla, Inc. 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, Inc. from the electric sedan and SUV market into commercial freight. The company did not disclose Semi production plans or pricing but reiterated plans to produce 50,000 Semis per year at the Nevada factory. Up to 7,000 yuan off, Tesla, Inc. (TSLA.US) cuts prices again in promotion. Tesla, Inc. announced its latest promotional offers. For orders placed on or before October 31, 2026, the Model 3 lineup offers a limited-time final payment discount of 5,000 yuan, while some Model Y variants offer a limited-time final payment discount of 7,000 yuan. Customers can also enjoy a combination of benefits: "5 years 0 interest, 8,000 yuan limited-time paint option benefit, or exclusive charging benefits choose one of three." In addition, some Model 3 variants will enjoy an 8,000 yuan insurance subsidy. After applying the above policy discounts, the Model 3 starts at 222,500 yuan, and the Model Y starts at 256,500 yuan. Musk discloses Colossus 2 expansion timeline: NVIDIA Corporation (NVDA.US) chip count 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 Corporation (NVDA.US) chips by the end of this year compared to current levels. xAI has now been merged into SpaceX (SPCX.US). He is accelerating the expansion of computing power. Musk posted on X that Colossus 2 currently has 110,000 NVIDIA Corporation GB200 chips and 440,000 GB300 chips. He also said that 220,000 GB300 chips will be brought online 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 Events Preview Beijing Time 20:30: U.S. August durable goods orders MoM Beijing Time 22:00: U.S. September University of Michigan Consumer Sentiment Index final reading