Preview of US Stock Market | The three major stock index futures had mixed performance. Dell Technologies rose after its earnings report, and Broadcom announced its financial results after hours.

Pre-Market Market Trends 1. As of September 2 (Wednesday), U.S. stock futures showed mixed results before the market opened. The Dow futures were up 0.19%, the S&P 500 futures were up 0.02%, while the NASDAQ futures were down 0.24%. 2. As of the same deadline, Germany's DAX index was down 0.44%, the UK's FTSE 100 index was down 0.31%, France's CAC 40 index was down 0.18%, and the Euro Stoxx 50 index was down 0.12%. 3. As of the same deadline, WTI crude oil was down 1.21%, priced at $89.13 per barrel. Brent crude oil was down 1.00%, priced at $93.70 per barrel. Market News The "September curse" is here, but there's almost no panic in the U.S. stock market! The unusual calm is what we should be most wary of. The U.S. market has entered one of the most volatile months in history, yet typical signs of market weakening are not present. The S&P 500 index remains near historical highs and is clearly above its 200-day moving average, making the likelihood of a significant drop this September lower than the historical average. Ari Beijing Worldia Diamond Tools, head of technical analysis at Oppenheimer, stated that while the S&P 500 hasn't continued its rapid rise recently, no "significant breakdown" has occurred. From a technical perspective, the risk of the U.S. market forming a significant top remains below historical averages. Relying solely on the notion that "September is the worst month of the year" is insufficient to judge this year's trends. Compared to seasonal patterns, it's currently more important to pay attention to volatility, bond yields, and Federal Reserve policy. As the second-quarter earnings season for S&P 500 constituents approaches its end, the dominant factors in September's market will shift from corporate performance back to the macro environment. Jack Janasiewicz, multi-asset portfolio manager at Natixis Investment Managers, believes that inflation, Fed policy, and bond yields will be the main variables influencing the market going forward. The war is far from over, oil prices remain stubborn, and the Fed finds itself in a tough spot regarding rate changes this September. Nick Timiraos, chief economic reporter for "The Wall Street Journal," referred to as the "Fed's mouthpiece," recently wrote that the Fed's interest rate meeting on September 15-16 faces an increasingly complex policy environment. A war lasting far longer than initially expected, continuously pushing energy prices higher, is hard to dismiss as a short-term variable. An energy crisis originally viewed as a temporary shock has lingered, and rising energy prices are re-examining the central bank's previous assessment of inflation shocks being "transitory," making it increasingly difficult for investors to believe that view can hold. Timiraos noted that the market currently bets that even if the Fed doesn't raise rates in September, an increase could still be on the table before December. Regardless of the action taken in September, rate hike expectations have already been significantly raised. If the Fed raises rates in September, the market will focus next on whether further hikes will follow, potentially pushing long-term U.S. Treasury yields even higher. On the other hand, if the Fed opts to stand still, new questions will arise: If Walsh believes inflation hasn't truly improved and that current borrowing conditions aren't sufficiently restrictive against the economy, how can keeping rates unchanged be justified? AI infrastructure spending may reach $5.5 trillion! JP Morgan: The bond market can absorb the wave of issuance, and tech giants can still leverage. As tech giants spark a wave of bond issuance to build AI data centers, concerns are growing about whether the U.S. investment-grade bond market can absorb the increasing debt supply. However, Stephanie Aliaga, global markets strategist at J.P. Morgan Asset Management, believes that the current leverage levels of major cloud computing companies remain low, and strong demand for AI computing power provides support for future cash flows. Therefore, the bond market has the capacity to absorb new issuances. J.P. Morgan estimates that the six largest hyper-scale cloud vendors could add approximately $1.5 trillion in debt on top of existing levels without putting significant strain on their financial health. Currently, bonds from these six major hyper-scale cloud companies account for about 5% of the U.S. investment-grade bond index, which has doubled from two years ago. As investments in AI infrastructure continue to expand, these tech giants' influence in the global bond market is rapidly increasing. A hawkish Federal Reserve versus energy inflation "hunts" gold, pushing gold prices nearly to zero growth this year! Concerns over deficits still drive Wall Street to look towards $5,000. Gold spot prices recently surged to a three-month high of $4,696.18 per ounce, driven by the U.S. Treasury expanding long-term Treasury buybacks, a weakening dollar index, and an uncontrolled expansion of fiscal deficits, as well as the "currency devaluation trade" wave. However, since last Friday's hawkish remarks from Federal Reserve Chairman Walsh at the Jackson Hole Global Central Banking Symposium, gold prices have continued to weaken. The subsequent escalation of the U.S-Iran conflict has made gold's recent trajectory increasingly bleak. Yet, the logic of long-term currency devaluation remains intact due to fiscal deficits, diluted purchasing power of the dollar, and central bank gold purchases. Recent forecasts show Citigroup has raised its three-month target price for gold from $4,500 to $4,800, maintaining a $5,000 target for the next six to twelve months; Goldman Sachs projects it to reach $4,900 by the end of 2026, forecasting average monthly purchases by central banks of 50 tons of gold, significantly higher than the pre-2022 average of 17 tons; Deutsche Bank is more cautious, forecasting average prices of $4,300 and $4,800 for the third and fourth quarters respectively, while warning that if the Fed continues raising rates, gold prices could fall to $3,800; Morgan Stanley believes its fourth-quarter target of $4,450 has already been achieved and sees a path to break $5,000 by 2027. Stock Information Dell Technologies, Inc. Class C (DELL.US) accelerates its "AI cash printing machine": Q2 net profit surges more than twofold, with a backlog of AI server orders at $95 billion, annual revenue guidance skyrockets to $192 billion. According to its financial report, for the second quarter of fiscal year 2027 ending July 31, the company's revenue rose 58% year-over-year to $46.97 billion, exceeding analysts' average expectation of $44.92 billion; net profit was $4.13 billion, a significant increase from $1.16 billion the previous year; adjusted EPS was $7.04, far higher than the average analyst expectation of $4.92. As of the end of Q2, backlog orders for AI servers stood at $95 billion, seen as a key leading indicator for future revenue. The company also provided a strong third-quarter guidance, expecting adjusted EPS of $6.50 and revenue of $49 billion, while analysts previously expected adjusted EPS of $4.49 and revenue of $41.42 billion. Moreover, it has significantly raised its full-year outlook for fiscal year 2027, now anticipating adjusted EPS of $25.50 and revenue of $192 billion, compared to the previous guidance of adjusted EPS of $17.90 and revenue ranging from $165 billion to $169 billion. As of the report time, Dell Technologies, Inc. Class C rose nearly 8% in pre-market trading on Wednesday. Revenue doubles, but stock price declines! With the label of "AI copper synergy explosion," Credo (CRDO.US) faces a slowdown in profit margins. The financial report shows that for the first quarter of fiscal year 2027 ending August 1, the company's revenue grew 114.7% year-over-year to $479 million, exceeding analysts' average expectation of $472 million; adjusted EPS rose 130.8% year-over-year to $1.20, also above analysts' average estimate of $1.17. Looking ahead, Credo forecasts second-quarter revenue of $525 million to $535 million, with the midpoint of $530 million exceeding analysts' average expectation of $516.5 million. However, Credo's first quarter GAAP gross margin fell 290 basis points year-over-year and 370 basis points quarter-over-quarter to 64.5%, while the midpoint for second quarter guidance decreased to 63.9%. Even though the company reported strong core performance metrics and revenue outlook, relatively weak gross margin data contributed to a decline in the stock price after hours. As of the report time, Credo fell over 9% in pre-market trading on Wednesday. AI hackers have become the norm! Palo Alto Networks (PANW.US) emerges as the biggest winner, with comprehensive guidance for fiscal year 2027 exceeding expectations. Cybersecurity company Palo Alto Networks announced a full-year profit outlook that surpassed Wall Street's expectations, largely due to strong demand from various enterprises for protection against increasingly sophisticated artificial intelligence systems. The financial report revealed that the company achieved revenues of $3.41 billion for the fourth quarter of fiscal year 2026, up 34.3% year-over-year, exceeding estimates by $60 million; adjusted EPS was $1.02, beating expectations by $0.04. The company stated in a Tuesday announcement that it expects adjusted EPS for fiscal year 2027 to range from $4.16 to $4.19, exceeding Wall Streets average expectation of $4.11; it anticipates annual recurring revenue (ARR) for next-generation security business to be between $11.075 billion and $11.175 billion, representing a year-over-year growth of 22% to 23%, also above market expectations. As of the report time, Palo Alto Networks fell over 2% in pre-market trading on Wednesday. Revenue growth hits a multi-year high, and full-year guidance is fully upgraded! MongoDB (MDB.US) after earnings, however, plummets: Atlas growth does not meet invisible expectations, triggering profit-taking. The document database company MongoDB reported its fiscal year 2027 second quarter results ending July 31. The financial report showed that MongoDB's Q2 revenue increased by 30% year-over-year to $771.8 million, surpassing analysts estimates of $735 million, representing the highest quarterly revenue growth since fiscal year 2024. Diluted EPS was $1.90, compared to $87 million or $1.00 from the same quarter last year, far exceeding the market expectation of $1.62. The company raised its full-year revenue guidance from $2.92 billion to $2.96 billion to a new range of $2.99 billion to $3.03 billion, with the midpoint of $3.01 billion exceeding analysts consensus of $2.96 billion. The annual adjusted EPS guidance was raised from $5.95 to $6.14 to a new range of $6.39 to $6.58, with a midpoint of $6.485 surpassing market consensus of $6.13. However, as Atlas cloud database business growth did not meet some investors' higher expectations, coupled with the stock already having surged significantly over the past month, the market's error tolerance turned out to be extremely low. As of the report time, MongoDB fell nearly 13% in pre-market trading on Wednesday. Net ARR growth exceeds 40%, total bookings hit a record high! GitLab (GTLB.US) Q2 results strongly beat expectations. The financial report showed that DevSecOps platform giant GitLab achieved revenues of $286.3 million for the fiscal year 2027 second quarter, up 21.3% year-over-year, exceeding expectations by $12.94 million; adjusted EPS was $0.24, beating expectations by $0.06. The company's total bookings for software development, security, and operations platforms reached a historical high and indicated that net annual recurring revenue (ARR) grew over 40%. Looking ahead, GitLab expects third-quarter revenue to be between $281 million and $283 million, while the market expects $281 million; it anticipates EPS to be between $0.19 and $0.20, while the market consensus is $0.18. As of the report time, GitLab rose nearly 21% in pre-market trading on Wednesday. Important Economic Data and Event Forecasts 8:15 PM Beijing Time: U.S. August ADP Employment Change (thousands) 9:05 PM Beijing Time: Fed Governor Barr speaks on "Economic Outlook and Financial Inclusion" 10:00 PM Beijing Time: U.S. July Factory Orders Month-on-Month (%) Earnings Forecasts Thursday Morning: Broadcom Inc. (AVGO.US), Hewlett Packard Enterprise Co. (HPE.US), Snowflake (SNOW.US), NetApp (NTAP.US) Thursday Pre-Market: Ciena (CIEN.US), Hello Group Inc. Sponsored ADR (MOMO.US)