Interest rate cut expectations rise, Dow Jones leads gains, technology stocks converge

U.S. stocks continued their optimism after the previous day's inflation data. The Fed's bet on interest rate cuts in September heated up, Dow Jones strengthened and took the lead, and other indexes fluctuated at high levels. Market focus turned to upcoming producer prices and retail sales to confirm cooling inflation and demand trends.

Differences in the four major indexes show that funds are turning into a boom cycle

The Dow Jones Industrial Average was provisionally reported at 44,777.26, up 0.72%; the S & P 500 was provisionally reported at 6,454.40, up 0.13%; the Nasdaq Composite Index was provisionally reported at 2,706.98, up 0.12%; the Philadelphia Semiconductor Index was provisionally reported at 5,874.24, up 0.58%. The market showed that cyclical and interest-rate sensitive stocks were relatively strong, while growth technology stocks were converging.

The probability of interest rate cuts in September is close to the downward support of pricing interest rates

After the consumer price index fell slightly below expectations, CME FedWatch showed traders almost fully priced a rate cut in September, and the market was discussing the possibility of starting a half-yard rhythm. U.S. Treasury Secretary Scott Bessent called on the Federal Reserve to cut interest rates by a total of 150 to 175 basis points this year and supported a 50 basis point cut in September first. Ten-year bond yields fell intraday, easing pressure on valuations.

AI and semiconductor trends diverge, Huida retracts back and becomes stronger

Nvidia(NVDA, NVDA) fell 1.15% to 181 intraday, taking some profits from high-end stocks;Advanced Micro Devices(AMD) increased in volume, up about 5.7%, driving Fai to maintain a red market. The market also reflects the cloud AI supply chain's reassessment of the pace of costs and capital expenditures, and the turmoil in the theme of high cost-to-profit ratio has intensified.

Large technology stocks are mixed and limited performance of the technology index

Apple(Apple, AAPL) rose 1.24%, Amazon(Amazon, AMZN) rose 1.43%, Tesla(Tesla, TSLA) rose slightly 0.21%, Microsoft(Microsoft, MSFT) fell 0.76%, Meta Platforms(Facebook, META) fell 0.64%, and Alphabet(Google parent company, GOOGL) fell slightly 0.18%. Differences in equity stocks make the finger's bounce limited.

Housing builders benefit from a decline in interest rates, and the overall group strengthens

Lennar(LEN) rose about 5.42%, D.R. Horton(D.R. Horton, DHI) synchronously rose. The fall in yield rates has strengthened the market's expectations for downward mortgage interest rates, driving up buying sentiment among builders and related supply chains; intraday transactions are usually larger than usual, indicating that funds are actively deploying interest rate-sensitive targets.

Active media and consumer goods themes: M & A news boosts risk appetite

Warner Bros. Discovery(WBD) surged about 7.93%, with subject buying pushing up individual stock volatility. Gildan Activewear(GIL) agreed to acquire Hanesbrands(HBI) for approximately US$2.2 billion. The stock prices of both parties are rising. The market interprets that the integration of the apparel industry will improve costs and channel efficiency.

Individual negative conditions suppress the trend of some industries and electronics OEMs

Jabil(Jabil Electronics, JBL) fell about 4.75%, indicating that the electronics foundry community is still divided on order and inventory digestion. GE Aerospace and GE Vernova fell about 4.57% and 4.45% respectively, putting industrial stocks under pressure. V2X(V2X, VVX) bucked the trend and rose due to the upward rating of securities firms, and defense themes attracted funding attention. CAVA Group(CAVA, CAVA)'s share price weakened as same-store sales declined and its outlook revised.

Futures and volatility indicators are stable, commodities and foreign exchange markets are heading for divergence

Major stock index futures fluctuated simultaneously with spot trading, while the VIX panic index changed limited, reflecting the stability of short-term volatility expectations. International oil prices fell, while gold prices rose; the US dollar index weakened, and the euro, pound and yen rose. Cryptocurrencies performed differently, and market risk appetite remained neutral and stable.

Data-intensive period is approaching, the market focuses on inflation and terminal demand

Investors will focus on PPI and retail sales to verify the inflation path and consumption resilience after CPI. If price pressure continues to ease and consumption does not cool down significantly, expectations of interest rate cuts are expected to continue and benefit interest-rate sensitive stocks; conversely, it may also trigger concerns about economic slowdown, causing funds to return to large-scale weighted and defensive stocks. In the short term, communication between data and the Federal Reserve will be the focus of observation.