Wall Street Morning Report: Oil Prices Nearing $100, Bond Market Awaits Bessent's Move, AI Computing Power Narrative Elevated Again, Apple Foldable Screen Faces Major Test

Every Monday to Friday morning, we focus on macroeconomics, US stocks, AI, precious metals, and crude oil, using data to review the market and trends to seize opportunities, produced by PANews.

"Tanker War" in the Middle East Ignites Oil Prices, Gold Falls for Three Consecutive Days, Copper Prices Hit New Highs

All three major stock indices closed lower, marking the second consecutive trading day of decline. The Dow Jones Industrial Average fell by 1.18%, the S&P 500 dropped by 0.58%, and the Nasdaq Composite Index decreased by 0.32%.

Geopolitical risks escalated rapidly on Tuesday, with the US military claiming to have destroyed five Iranian oil tankers. Prior to the action, the Iranian Revolutionary Guard had launched ballistic missile attacks on US ships twice; Iranian media reported that tankers were attacked near Khark Island, prompting Iran to warn that tankers in Kuwait and Bahrain could become targets and urged crew members to evacuate. The Houthi attacks on Saudi energy facilities also intensified, leading to temporary shutdowns of multiple facilities in Saudi Arabia. WTI crude oil approached $94 during trading, rising over 2%; Brent crude neared the $100 mark, reaching a multi-month high. Goldman Sachs slightly raised its oil price forecast, suggesting that the duration of the Middle East conflict could extend until 2027, with oil price risks still significantly skewed to the upside.

The rise in oil prices directly elevated inflation expectations, with the monetary market now pricing in over a 60% chance of a Federal Reserve rate hike this month. Pressure on the Federal Reserve is also increasing:

• Macquarie has moved its first rate hike forecast from December to September, expecting another hike in the first quarter of 2027;
• Bank of America warned that if the core PCE for August rises to 0.24% or higher and the Federal Reserve does not act, the market may doubt its commitment to combating inflation;
• Claudia Sahm, the proponent of the "Sahm Rule," believes the Federal Reserve should not change its policy for the White House or elections, nor should it raise rates to prove its independence; the key is still economic data.

Spot gold fell below the $4,400 mark and recorded three consecutive declines. Goldman Sachs' metals chief, Anthony Kim, still believes that the gold bull market is merely on a "long pause," not an end, stating that around $4,000 is a solid bottom; Goldman Sachs' research department expects central bank gold purchases and reserve diversification demand to push gold prices to $4,900 per ounce by the end of 2026.

Copper prices continue to hit historical highs, with the main copper futures contract on the Shanghai exchange surpassing 110,000 yuan per ton for the first time; LME three-month copper touched $14,624 per ton during trading. On the supply side, global copper mine production declined in the first half of the year, with Chilean exports affected by weather and mining disruptions; on the demand side, AI data centers, grid upgrades, and new energy vehicles are reshaping the copper consumption curve. Citi expects copper prices could rise to $15,000 per ton by the end of the year, and if AI demand or manufacturing rebounds beyond mining supply capacity, it could peak at $17,000 per ton. Expectations of US tariffs are also siphoning global copper inventories, with data from Saxo Bank showing that the US holds nearly 70% of exchange copper inventories, while its consumption accounts for only about 6% to 7% of the global total.

Strengthening Yen Weighs on Dollar, Bond Market Focuses on Bessent's Repo

The dollar weakened slightly, with the dollar index falling 0.32% to 98.855, primarily dragged down by the strengthening yen; the dollar fell to about 153.4 against the yen, touching as low as 152.89 during trading. Japan's wage data exceeded expectations, reinforcing the case for the Bank of Japan to continue raising rates; Bessent made strong remarks against yen shorts, claiming to have insights into the Bank of Japan and policymakers' movements, stating, "I am the dealer now," unafraid of traders betting against him. Morgan Stanley believes that arbitrage trades can still withstand a stronger yen, unless a catalyst emerges to further elevate overall volatility, the recent rebound in the yen may not derail emerging market arbitrage trades.

The global long bond sell-off has not stopped, with the yield on the US 10-year Treasury remaining around 4.8%, and the 30-year yield still at its highest level since 2007. Despite last night's 3-year Treasury auction demand being decent, with the bid-to-cover ratio reaching a new high since November last year, the market's real focus is on the maximum amount of 10- to 20-year Treasury repurchases to be announced by the US Treasury at 23:00 tonight.

Previously, the US Treasury stated that before November 4, each long-term Treasury repurchase would be at least $4 billion, doubling from the previous $2 billion, with room for further expansion. Predictions regarding tonight's "move" vary among major institutions:

• Morgan Stanley estimates that the actual constraint limit for a single repurchase could be around $10 billion, and if that level is reached, the quarterly net issuance of US Treasuries with maturities over 20 years could decrease by about 55%;
• Wrightson ICAP believes that $5 billion to $6 billion is a more reasonable starting point;
• Barclays expects the Treasury may adopt an "at least $4 billion each time" open-ended statement to maintain policy flexibility.

Bessent attempted to downplay market concerns about "the Treasury conducting quantitative easing," emphasizing that expanding old debt repurchases is to calm the "feverish" state of the bond market, aiming to return the market to equilibrium rather than implementing quantitative easing. At the same time, he refuted concerns about US credit, pointing out that if investors were genuinely worried about US debt, they should sell US Treasuries and turn to German bonds, but in reality, the US bond market has performed relatively more robustly. Bloomberg strategist Brendan Fagan warned that if the repurchase amount announced tonight exceeds market expectations, it may be interpreted as the Treasury releasing a stronger policy signal, thereby lowering long-term yields in the short term. However, since this repurchase amount is still relatively small compared to the vast US Treasury market, market analysts believe that the performance of the 30-year swap spread may better reflect the market's true judgment on supply changes than nominal yields.

AI Computing Power Demand "Never Enough," Chips Celebrate Amidst Market Declines

The market is pressured by oil prices and interest rates, but funds continue to buy into AI computing power, optical communications, semiconductors, cloud computing, and storage. The Philadelphia Semiconductor Index rose by 1.3%, and the VanEck Semiconductor ETF (SMH) increased by 1.19%, with 21 component stocks rising and 9 falling.

OpenAI continues to elevate the narrative of AI demand, not only releasing ChatGPT Images 2.5 (with a maximum generation speed increase of 50%, generating over 3 billion images weekly through related models) but also announcing that its latest undisclosed model solved one of the seven Millennium Prize Problems—the Navier-Stokes existence and smoothness problem—using up to about 10,000 AI agents working together in just 88 hours, with computing costs reaching millions of dollars.

OpenAI researcher Sebastian Bubeck described this as the "stunning pinnacle" of the past twelve months' trajectory. UCLA professor Terence Tao likened it to finding a path to a hidden waterfall, valuable but potentially undermining the deep understanding process of humans, akin to machines lifting weights for people at the gym. More AI images, videos, and agent tasks mean more demand for servers, chips, storage, and networking equipment.

IREN CEO Daniel Roberts also reinforced this logic, stating that global computing power supply may never keep up with AI demand, as each unit of computing power brought online may instead stimulate more demand. Goldman Sachs expects that by the end of 2027, US data center capacity will double compared to 2024 and triple by 2030, reaching about 125 gigawatts, enough to supply power to over 100 cities the size of San Francisco. IREN plans to invest up to $30 billion in AI business development over the next year, having raised about $19 billion in the past 12 months through convertible bonds, chip collateral financing, customer prepayments, and equity financing.

Apple's press conference at 1 AM tomorrow is the biggest highlight in consumer electronics, marking the debut of new CEO John Ternus. The market is focused on three points: the starting price of the first foldable iPhone may be around $2,099, with some discussions even pointing to $2,199; the Pro series may see a price increase of $150 to $200 due to rising memory and storage costs; the standard iPhone 18 may be delayed until spring 2027, breaking a decade-long release rhythm. Gurman stated that memory shortages have significantly pushed the pricing of the foldable iPhone beyond Apple's early expectations, with the price of the high-capacity version potentially approaching $3,000, which is both a positive for ASP and a risk for demand elasticity. Bank of America Securities believes that Apple’s stock often experiences a "buy the rumor, sell the news" type of pullback after the press conference, but this year the stock has already fallen about 6% in the 30 to 60 days prior to the event, and the reaction will depend on the extent of price increases, Siri AI adoption, and management's statements on foldable screen demand.

Specific Project Actions and Stock Price Fluctuations:

• Intel up 9.05%: Market rumors suggest the company may raise consumer-grade PC processor prices by about 10% in October, marking another price action this year, seen as a signal for profit margin recovery. At the same time, the demand for AI agents and local computing power has also brought CPUs back into focus. Related sectors: AMD up 5.9% (TAM doubles to over $2 trillion + Helios excess orders), TSMC up 2.4%, ASML up 3.8%.

• Qualcomm up 3.17%: Reached a multi-generational AI data center custom chip cooperation with Amazon, granting Amazon up to 25 million stock warrants with an exercise price of $161.26, corresponding to a maximum procurement of $60 billion.

• Lumentum up 11.04%: AI data centers are transitioning from electrical interconnection to optical interconnection, directly benefiting Lumentum. Among related optical communication stocks, Corning rose 7.56%, Coherent rose 7.10%, and Applied Optoelectronics rose 5.70%.

• CoreWeave up 11.72%: The market continues to buy into the logic of AI computing power shortages. IREN CEO stated that computing power supply is difficult to keep up with demand, further pushing up valuations of cloud computing companies. Among related stocks, NEBIUS rose 7.73% (reached a strategic cooperation with Palantir to provide AI-native computing infrastructure and cloud platforms for commercial clients), Oracle rose 2.36%, and IREN rose 5.04%.

• Tesla up 3.98%: After the Cybercab press conference, Musk confirmed that the vehicle's drive motor has achieved "zero rare earth" usage, and the range has not been affected, with the new rare earth-free motor reducing size by 18%, weight by 25%, and improving efficiency.

• Storage sector generally up: Apple is reportedly negotiating a 3 to 5-year NAND flash memory long-term contract with Kioxia, possibly without a price cap. Previously, Apple was a major buyer, accustomed to pushing prices down; now, to ensure AI and new device supply, it is also starting to prioritize volume locking. Seagate rose 6.49%, SK Hynix rose 4.83%, Western Digital rose 2.14%, but Micron fell 1.61%.

• SpaceX up 3.73%, total market value returning to $2 trillion. JPMorgan expects that the quarterly adjustment of the Nasdaq 100 effective September 21 may increase SpaceX's weight from 1.25% to about 1.51%, as over 1 billion shares of restricted stock will be released, increasing the free float ratio from less than 10% to nearly 30%. However, before the end of October, over 1 billion shares will still be released, and another approximately 1.3 billion shares will be tradable after the mid-November earnings report, with subsequent index fund allocation demand and insider selling intentions jointly determining supply and demand shocks.

• Bloom Energy (BE) up 9.63%: The company will be included in the S&P 500 index, effective before the market opens on September 21, bringing expectations of passive fund buying. At the same time, strong electricity demand from AI data centers has also attracted attention to power and fuel cell assets. Among related energy and AI power chains, nuclear service company HGP plans to go public via SPAC, focusing on providing adjustable nuclear power supply for AI data centers.

• Amgen down 10.08%: The failure of Novartis-related drugs in phase three has raised market concerns about the prospects of similar lipid-lowering protein (a) drugs. Among related medical stocks, Novartis fell 13.93%, Eli Lilly fell 2.22%, and Johnson & Johnson fell 2.22%.

• Meta down 0.53%: The company launched a personal AI agent, Muse, which can assist with shopping, booking, appointments, and filling out forms, offering monthly paid versions at $20 and $100. Zuckerberg stated that the personal AI assistant is Meta's biggest business opportunity, but the market is still waiting for real paid conversions. Related giants: Google up 0.02%, Microsoft down 1.15%, Amazon down 0.60%. Apple down 1.17% (cautious funds before the press conference, with foldable screen pricing and Pro series price increases being the main uncertainties); Nvidia down 2.01% (Google TPU externalization and inference cost-performance competition continue to exert marginal pressure).

Upcoming Focus:

September 9 (Wednesday)

• 23:00 US Treasury to announce the maximum amount for 10- to 20-year long-term Treasury repurchases: If the scale is significantly above $4 billion, especially close to $6 billion to $10 billion, it may short-term lower long-term yields and support growth stock valuations; if it only maintains the minimum level, the market may interpret it as insufficient policy signal, and long bond sell-off pressure may re-emerge.

• September 9-10, US Republican midterm election conference: The market is focused on Trump and the Republican Party's statements on tariffs, finance, immigration, and energy policy. If the policy tone is strong, it may affect the dollar, energy, defense, manufacturing repatriation, and global trade chain pricing.

• September 9-10, Paris Space Summit: US companies such as Blue Origin, SpaceX, StokeSpace, and Starcloud are reportedly absent, and attention should be paid to whether there will be political or commercial friction in US-EU space cooperation, which may create emotional disturbances for commercial space and satellite communication concept stocks.

• September 9-10, the 11th "Belt and Road Summit Forum": Held at the Hong Kong Convention and Exhibition Centre, attended by John Lee.

September 10 (Thursday)

• 01:00 Apple Fall Product Launch: The first foldable iPhone, iPhone 18 Pro, and iPhone 18 Pro Max will debut, marking the first product test for new CEO John Ternus. The market will focus on foldable screen pricing, inventory scale, first sale arrangements, Pro series price increase extent, and gross margin protection; if pricing is accepted by the market, the foldable screen, storage, panel, hinge, and precision manufacturing supply chains are expected to benefit.

• 01:00 $39 billion US 10-year Treasury auction: The current yield on 10-year Treasuries has risen to about 4.78%, and the bid-to-cover ratio, indirect bidder demand, and tail spread of this auction will be key to judging the long-end US Treasury's acceptance capacity. If the auction is weak, yields approaching 5% will suppress banks, real estate, and high-valuation growth stocks; if demand is robust, it will help alleviate interest rate shocks.

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