Preview of US Stock Market | The three major stock index futures are mixed, the dollar index is approaching its year-to-date high, and Schneider Electric plans to acquire PTC (PTC.US) for $22.6 billion.

Pre-market Market Trends 1. On Monday, October 5, before the U.S. stock market opened, the three major U.S. stock index futures were mixed. As of press time, Dow futures rose 0.06%, S&P 500 index futures rose 0.01%, and Nasdaq futures fell 0.21%. 2. As of press time, Germany's DAX index rose 0.14%, the UK's FTSE 100 index rose 0.51%, France's CAC 40 index fell 0.76%, and the Euro Stoxx 50 index rose 0.01%. 3. As of press time, WTI crude oil fell 0.83% to $90.35 per barrel. Brent crude oil rose 0.36% to $102.62 per barrel. Market News U.S. September ISM services index to be released soon: price and employment subindexes worth watching. The U.S. Institute for Supply Management (ISM) will release the September ISM services PMI on Monday. Data showed that the August ISM services PMI was 55.4, higher than 54.1 in July, marking the 26th consecutive month in expansion territory above 50. Among the components, the business activity index rose to 61.7, and the new orders index rose to 60.9, indicating that demand in the services sector remains strong. However, two subindexes in the report deserve special attention. The August services employment index was only 47.8, in contraction territory for the second consecutive month; at the same time, the prices paid index rose to 72.6, the highest level since August 2022. This indicates that the U.S. services sector currently presents a combination of "strong demand, weak employment, and high price pressure." Therefore, if September data continue to show the prices index above 70 while the employment subindex improves again, it could reinforce the view that the economy remains resilient and inflationary pressure persists, thereby supporting market expectations for further Federal Reserve rate hikes. Dollar index approaches its year-to-date high, overheating overbought risk. Renewed European fiscal pressure and political uncertainty have boosted safe-haven demand for the dollar. Affected by a weaker euro, the Bloomberg Dollar Spot Index rose as much as 0.4%, extending the index's three-week rally and approaching its highest level of the year. But some indicators show the dollar is already overbought, and the rally faces reversal risk. The market is focused on this week's U.S. ISM services PMI, employment data, and Friday's University of Michigan consumer sentiment index, while also watching the Federal Reserve meeting minutes (last month the Fed hiked rates for the first time in three years) and officials' speeches to judge the rate path. Credit Agricole G10 FX research head Marinov warned that an overbought and overvalued dollar is vulnerable to negative data shocks, and if investors reassess the FOMC's hawkish consensus, the dollar could come under pressure; the bank's model recommends going long the pound and Swedish krona against the dollar. Raw sugar futures hit a nearly two-year high, concerns over tightening global supply intensify. Raw sugar futures extended gains as weather and production concerns in major sugar-producing countries intensified, and market worries about tightening global supply continued to build. The most-active raw sugar futures in New York rose as much as 2%, reaching their highest level since December 17, 2024, extending last week's gain of nearly 8%. White sugar futures also rose in tandem. The El Nino weather pattern is increasing supply concerns across the Shenzhen Agricultural Power Group market, and sugar crops are expected to be among the first affected. At the start of the year, the market widely expected a global sugar surplus, but weather risks are changing that expectation. Chris Beauchamp, chief market analyst at investing and trading platform IG, said: "Weather concerns are driving the recent rise in sugar prices, and sugar prices may further test the August high." Excessive rain in Brazil, the world's largest sugar producer, has slowed sugarcane harvesting and crushing. India, the world's second-largest sugar producer, has been hit by its weakest monsoon since 2015 and is expected to see lower sugar output. In Europe, the European Union's agricultural resource monitoring service expects sugar beet yields to be below the five-year average. Normally, a decline in production in one region can be offset by higher output elsewhere, but if multiple major sugar-producing countries suffer adverse weather at the same time, that supply buffer may be weakened. Saudi Aramco CEO warns: global oil supply buffer is "scarily low." Saudi Aramco CEO Amin Nasser said on Monday in London that oil inventories that serve as a global buffer against supply shocks are "scarily low," and unless the Strait of Hormuz reopens, market risks could intensify further. Nasser's remarks came days after the Group of Seven (G7) and its partners decided to release up to 100 million barrels of emergency oil and diesel reserves to ease rising fuel costs. "Until the Strait of Hormuz is fully reopened and market confidence is restored, the harsh reality is that price pressure will intensify on both crude and refined products," Nasser said at the Energy Intelligence Forum in London. "The crude supply tightness is already severe, but refined product prices have risen even more." Nasser said releasing inventories will buy economies some time, but it cannot solve the supply-demand imbalance. He said that even if Hormuz, a key shipping chokepoint, reopens, energy-consuming countries may need as long as two years to replenish inventories. DBS CIO: NVIDIA Corporation (NVDA.US) forward P/E is only 17 times, AI tech stocks far from bubble territory. DBS Group Chief Investment Officer Hou Wey Fook said that NVIDIA Corporation's price-to-earnings ratio and its expected 70% earnings growth next year show that artificial intelligence (AI)-driven tech stocks are far from entering bubble territory. Data show that NVIDIA Corporation's current stock price is about 17 times its expected earnings over the next 12 months. Hou compared this valuation with Cisco Systems, Inc.'s (CSCO.US) 100 times valuation before the dot-com bubble burst. "If the benchmark company of the AI trade is valued at only a little over ten times, how can you call it a bubble?" he said in an interview, adding that semiconductors and AI still have "tailwinds" in this cycle. However, Hou still advocates a "barbell" strategy to "control overall portfolio volatility": combining growth tech stocks with investment-grade fixed income products to achieve stable returns, while using hedge funds and gold as intermediate risk diversification tools. Individual Stock News Schneider Electric plans to acquire U.S. engineering software developer PTC (PTC.US) for $22.6 billion. France's Schneider Electric reached an all-cash deal to acquire U.S. industrial software company PTC, valuing PTC at $22.6 billion, in a move aimed at improving its business portfolio for industrial AI. Schneider Electric announced on Monday that it proposed to acquire PTC for $205 per share in cash, a 42% premium to the stock's closing price on the previous trading day. PTC's board has decided to recommend that shareholders approve the transaction. PTC surged 36% in pre-market trading. Qualcomm (QCOM.US) reaches multi-year patent licensing agreement with Huawei. Huawei and Qualcomm announced on Monday a broad multi-year patent licensing agreement covering cross-licensing of their patent portfolios in multiple fields including 5G, computing, artificial intelligence, and networking, as well as Qualcomm's acquisition of some Huawei U.S. patents. The transaction will be completed after obtaining necessary regulatory approvals. According to reports, this is the first patent licensing agreement between Huawei and Qualcomm covering 5G technology. Qualcomm rose more than 4% at one point in pre-market trading. BP p.l.c. Sponsored ADR (BP.US) plans to improve capital efficiency, CEO accelerates restructuring after half a year in office. BP p.l.c. Sponsored ADR CEO Meg said the company needs to improve the efficiency of shareholder capital use. Six months after taking the helm, she is working to reshape the oil giant. Meg said on Monday at the Energy Intelligence Forum in London: "Decision-making is very important. In the past, we did not carefully manage shareholder capital." As BP p.l.c. Sponsored ADR's first CEO hired from outside the company, Meg quickly pushed for restructuring after taking office, following years of poor performance at BP p.l.c. Sponsored ADR. Related measures include selling low-return assets, streamlining the company's structure, and appointing a new chairman. She said in August that BP p.l.c. Sponsored ADR had not fully realized its potential and had "lost too much value." The Iran war pushed up oil and gas prices, giving Meg some support in advancing the company's restructuring. However, on Monday she declined to say when BP p.l.c. Sponsored ADR would resume stock buybacks, saying only that the company would continue to repay debt and would not increase spending. Meg said: "In our industry, BP p.l.c. Sponsored ADR has been the most leveraged company for more than a decade." From Micron (MU.US) to Hon Hai: AI supply chain results beat expectations one after another, global infrastructure spending remains red-hot. NVIDIA Corporation (NVDA.US) partner Hon Hai Precision reported better-than-expected quarterly revenue, indicating that global AI infrastructure spending remains at a high level. In the three months ended September, Hon Hai's revenue totaled NT$3.03 trillion (about $95.4 billion), up 47% year over year. The analyst average estimate was NT$2.83 trillion. Hon Hai's strong revenue growth followed optimistic guidance from Micron Technology, Inc. last week, further evidence that AI spending continues to climb. This spending momentum has not weakened even as executives such as OpenAI's Sam Altman and Anthropic's Dario Amodei call for slowing AI development to ensure it remains under human control. Morgan Stanley renames NVIDIA Corporation (NVDA.US) as top semiconductor pick, industry bottleneck shifts to data center infrastructure; SpaceX and Amazon.com, Inc. cooperation opens growth space. Morgan Stanley's latest research report re-listed chip giant NVIDIA Corporation (NVDA.US) as its top pick in semiconductors, maintaining an "overweight" rating and a target price of $300. The institution believes the industry bottleneck is rapidly shifting from semiconductor capacity constraints to the construction speed and financing model of new data centers, and NVIDIA Corporation is well positioned to capture industry benefits through its product architecture, global customer ecosystem, and financing support capabilities. It is also bullish on incremental opportunities from Muse intelligent agents and new customer cooperation, and sees upside room in the company's valuation. Morgan Stanley emphasized that NVIDIA Corporation currently trades at only 15 times its fiscal 2028 earnings forecast, making the valuation highly attractive; even if the P/E ratio does not expand, earnings growth alone can still deliver solid investment returns. Important Economic Data and Event Preview 22:00 Beijing time U.S. September ISM non-manufacturing PMI