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    3. Wall Street Morning Briefing: Hawkish Pressure Before Non-Farm Payrolls, Storage and AI Software Stocks Under Pressure, Copper Prices Near Historical Highs

    Wall Street Morning Briefing: Hawkish Pressure Before Non-Farm Payrolls, Storage and AI Software Stocks Under Pressure, Copper Prices Near Historical Highs

    By: rootdata|2026/08/07 04:29:00
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    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.

    US Stock Indices Close Lower, Copper Prices Near Historical Highs, Non-Farm Data Key for September Rate Hike

    On Thursday, all three major US stock indices closed lower, with the Dow Jones Industrial Average falling 0.85%, ending a five-day winning streak; the S&P 500 dropped 0.18%; and the Nasdaq fell 0.06%. The market took profits ahead of the non-farm payrolls, compounded by inflation repricing due to a sharp rise in oil prices, resulting in overall light trading, with Goldman Sachs' trading desk activity rated only 4 out of 10, and trading volume below the 5-day average by 12%.

    Yesterday, Iran advanced a draft regulation for the Strait of Hormuz, proposing to ban the passage of US, Israeli, and related vessels, imposing fines of up to 20% of the cargo value for violators. As a result, Brent crude rose 5% to $82.9, while WTI crude increased 4% to $77. Although Trump stated that the Strait of Hormuz is "somewhat open," he emphasized that the US Navy is executing a blockade against Iran, and the agreement "cannot be said to be officially reached yet." Goldman Sachs' energy team noted that before a new US-Iran agreement is confirmed or the situation escalates significantly, Brent crude prices may remain in the range of $80 to $90 per barrel.

    The US Treasury market continues to face pressure, with the 10-year Treasury yield rising about 6.5 basis points, up 1.37%, briefly testing the 4.70% mark during the day. Google's $25 billion large-scale bond issuance (with about $115 billion in orders, four times the expectation) further exacerbated supply pressure. The dollar rebounded supported by yields, testing the 100 mark on the dollar index.

    Gold briefly broke above $4,300 before retreating, ultimately closing flat. The World Gold Council noted that gold prices were flat in July, with future movements depending on real interest rates, the dollar, growth expectations, and central bank responses. A scenario of a second wave of high inflation similar to the late 1970s cannot be ruled out, but it does not automatically favor gold prices. A ban on copper and cobalt concentrate exports from the Democratic Republic of the Congo led to LME copper prices rising nearly 2%, reaching $14,369 per ton, the highest since January this year and approaching historical peaks. The logic behind rising copper prices has shifted from traditional growth recovery to a composite pricing influenced by supply constraints, AI data center electricity needs, grid upgrades, and trade policy uncertainties.

    Additionally, Trump signed an executive order imposing minimum price limits and a 15% tariff on imported polysilicon, wafers, and solar components, effective December 4, 2026; he also announced a ban on the export of tungsten waste and battery waste starting August 27. Market analysis suggests that tariffs, energy, and critical mineral policies are intertwining to form a new inflation framework, with the lithium battery, semiconductor, and military-industrial supply chains facing a reassessment of regional supply risks.

    Currently, there is a significant divergence in Wall Street's predictions for non-farm data, with forecasts ranging from an increase of 18,000 to 83,000 jobs. Deviations from expectations could trigger severe volatility in financial markets. Meanwhile, hawkish voices within the Federal Reserve are rising, with St. Louis Fed President Bullard stating that the probability of inflation remaining above target in the future is increasing, leaning towards supporting a rate hike. At the same time, the Financial Times reported that if inflation data is hot in the coming weeks, Fed Chair Waller is also prepared to push for a rate hike in September. Institutions such as BMO, TD Securities, Bloomberg, and UBS believe that if tonight's non-farm data is strong, combined with input inflation from rising oil prices, the Fed may maintain a hawkish stance in September.

    AI Application Software and Storage Stocks Hit Hard, Space and Energy Stocks Defy Trends

    Last night, AI application software and storage chips saw significant pullbacks due to disappointing earnings or guidance, while space concepts and some energy stocks strengthened due to event-driven factors. Overall, the Tech Seven index rose slightly by 0.23%, but breadth was weak, with hedge funds buying tech stocks and long-term funds reducing positions in information technology and healthcare. As the earnings season comes to a close, investors are beginning to reassess the sustainability of "high investment, high valuation".

    Notably, among the S&P 500 companies that have reported earnings, about 84.8% exceeded market expectations, far above the historical average of 68%, but stock price reactions have been notably tepid, indicating that the market is starting to focus more on future earnings guidance rather than already realized performance. Analysts believe that the market's tolerance for AI-related companies has significantly decreased, with computing power expansion facing severe constraints from memory, electricity, and capital expenditures.

    The most shocking market news yesterday was Alphabet's announcement of a $25 billion large-scale bond issuance plan. This capital feast, with a subscription scale of up to $115 billion, not only directly drained market liquidity but also triggered a steep rise in long-term Treasury yields. Investors are beginning to be wary that the bottomless pit of AI infrastructure is dragging these tech giants' free cash flow into negative territory.

    Specific Project Actions and Stock Price Fluctuations:

    • SpaceX up 6.14%: The release of 911.5 million shares valued at $100 billion not only did not trigger a sell-off but instead led to a price increase. The market had already cleared marginal sellers in Wednesday's plunge, and retail investors' enthusiastic buying offset institutional caution. Musk announced an initial investment of $16.8 billion with Tesla to build the Terafab superchip factory, aiming for an annual production of 1 terawatt of computing power, igniting imagination for space AI infrastructure.

    • Most space concept stocks rose: Redwire up over 10%, Kratos Defense & Security Solutions up nearly 4%, Rocket Lab up over 1%, Boeing down over 3%, AST SpaceMobile down over 1%.

    • Western Digital down 13.03% / SanDisk down 6.81%: Although both companies reported better-than-expected Q4 earnings, their revenue guidance for the current quarter fell short of expectations, and gross margins showed signs of peaking, leading to ruthless selling. Citigroup and Jefferies quickly lowered SanDisk's target price, with Goldman Sachs stating that overly high market expectations have already priced in the positives.

    • Storage concept stocks faced a bloodbath: SK Hynix down nearly 5%, Micron Technology down over 1%, Roundhill Memory ETF (DRAM) down over 4.5%, while Silicon Motion rose nearly 9%.

    • Applovin down 19.66% / Datadog down over 19%: Applovin's Q2 revenue and Q3 guidance both disappointed, with the CEO admitting that the performance of the core AI model did not improve as expected, leading to tightened budgets from advertisers; Datadog faced a sell-off due to slowing Q3 revenue growth expectations.

    • AI application software stocks collectively collapsed: HubSpot down over 19%, ServiceTitan down over 3%, Cloudflare down nearly 3% (rebounding in after-hours trading), Unity Software surged over 15% due to better-than-expected earnings.

    • Google down 1.29%: Alphabet initiated a $25 billion bond issuance to support up to $205 billion in AI capital expenditures, with subscription enthusiasm surpassing Amazon and SpaceX. However, the massive bond issuance has heightened market fears of its free cash flow turning negative, dragging down its stock price.

    • Optical communication stocks strengthened due to infrastructure demand: AXT Inc up over 9%, Astera Labs up over 4%, Credo up over 2%, Lumentum up over 1%.

    • Tesla down 0.63%: Musk revealed that the massive computing power of Terafab will be allocated at a ratio of 1:3 between the Optimus humanoid robot and aerospace AI projects.

    • Oracle down 0.64% / Nebius down 13.29%: Michael Burry disclosed short positions on Oracle at $144.63 and on Nebius at $211.77, betting that their GPU depreciation is too slow, leading to inflated profits.

    • Airbnb up over 8% in after-hours trading: Q2 net profit surged 27%, booking volume hit a record high, and the company significantly raised its full-year earnings guidance, showcasing remarkable resilience in European and American travel demand.

    • Other giants: Microsoft (+2.54%) reached a new high for the year, with the company launching the largest data center in India to further solidify its cloud computing advantage; Meta Platforms (+0.19%) was ordered by a New Mexico judge to pay $567 million to a youth mental health relief fund, yet its stock price remained resilient. NVIDIA (-0.10%) is reportedly considering lowering the memory configuration of its next-generation Rubin Ultra chip due to shortages of HBM high-bandwidth memory, which may require customers to purchase more chips to run large models.

    Upcoming Focus:

    • August 7, 20:30: US July Non-Farm Employment Report: There is a significant divergence in Wall Street's predictions for job additions, ranging from 18,000 to 83,000. If the data is strong, it will solidify expectations for a Fed rate hike in September, boosting the dollar and Treasury yields; if the data is extremely weak, amidst current high oil prices, it will instantly trigger "stagflation" fears, with either outcome likely to cause severe turbulence in the stock, bond, and currency markets.

    • August 8, 4:30: CFTC will release the gold holdings report as of August 5, with Wednesday's single-day surge raising questions about whether it was due to passive liquidation by CTA funds or strong intervention by institutional bulls. If active funds are absent, gold may face a critical buyer vacuum above $4,200.

    -- Price

    --

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