In the early hours of September 13, Beijing time, US stocks staged a "drama of ice and fire" — the market closed mixed on Friday, with the Nasdaq not only reaching a historic closing high but also soaring to 22182.34 points during the session; the S&P 500 was even more impressive, breaking through the 6600-point mark for the first time, hitting a new intraday high of 6600.21 points, while the Dow Jones fell against the trend by more than 273 points, a decline of 0.59%. Even more crazily, all three major stock indices turned positive this week, with the S&P achieving its best weekly performance since August, the Nasdaq rising for two consecutive weeks, and the Dow finally ending its losing streak with its first rise in three weeks.
The "engine" of this wave of market activity relies entirely on the Federal Reserve's "interest rate cut expectations" being maximized. This week's US data can be described as a "contradictory collection": August CPI rose 0.4% month-on-month, exceeding expectations, but the 12-month cumulative increase of 2.9% met expectations; even more explosive is that last week the initial jobless claims surged to 263,000, reaching a new high since October 2021, far exceeding the expected 235,000. Yet, this "bad data" has become the market's "stabilizer". A strategist from Principal Asset Management pointed out directly: the jobless claims data overshadowed the slight CPI beat, and the Federal Reserve's rate cut next week is not only a foregone conclusion but may even suggest that "a wave of rate cuts is coming."
The market's bets on interest rate cuts have already heated up to a boiling point. The CME FedWatch tool shows that the probability of a 25 basis point cut at the Fed's meeting on September 17 is almost a certainty, and some dare to bet on 'big'—bidding for a 50 basis point cut. The swap market is even crazier, with traders expecting there could be 2 to 3 cuts of 25 basis points within the year; Citigroup directly called for a total cut of 125 basis points over the next five meetings, while Morgan Stanley is more aggressive, predicting four consecutive cuts in September, October, December, and January next year, bringing rates down to 3.375%, and ultimately down to 2.875%.
But behind the excitement, the divergence has exploded. UBS directly poured cold water on it: 'The market has pushed the Fed's support expectations to the limit. If there is no 50 basis point cut next week, many investors will be disappointed, but I don't think they will cut that much at all.' Additionally, U.S. Treasury yields also added to the chaos, with the 10-year Treasury yield rising by 2 basis points to 4.04% on Friday, reversing the drop below 4% (the first time since April) seen on Thursday.
On one side are the historical highs of the Nasdaq and S&P, and on the other, institutions are in a fierce debate over the extent of interest rate cuts, alongside seasonal weakness and geopolitical risks lurking nearby—how long can this rebound in the U.S. stock market last? After the Federal Reserve makes its definitive decision next week, will the market see a 'reversal of expectations'? The answer will be revealed soon.#美联储降息预期升温
