Global stock markets showed unstable trends due to rising producer prices, increased unemployment benefits, and soaring Treasury yields.
The US Department of Labor announced that the Producer Price Index (PPI) for August increased by 0.4% month-over-month. This met expert forecasts but showed a clear acceleration compared to July's 0.1% increase. In particular, the surge in energy prices due to the renewed Iran conflict is believed to have significantly impacted inflation.
This figure significantly exceeded market expectations of 205,000. The 4-week moving average of claims also stood at 206,000, while continuing claims decreased to 1,774,000 compared to the previous week.
US Treasury yields surged, increasing financial market instability. The benchmark 10-year Treasury yield rose to 4.932% during trading, reaching its highest level since November 2023. The 30-year Treasury yield climbed to 5.354%, its highest since June 2007. This rapid increase in yields pushed the probability of a Federal Reserve (Fed) rate hike to 70%.
This brings the deposit rate to 2.5%. This rate hike is interpreted as a measure in response to the increased instability of energy prices due to the recent Middle East conflict.
Despite soaring Treasury yields, he assessed that current interest rates are somewhat low given the economic situation and large capital expenditures. Druckenmiller criticized the Federal Reserve's restrictive policy stance and added that he has reduced his AI-related investment by 20% compared to six months ago. He maintained a cautious stance, wary of a potential AI performance bubble.
Oracle's Q1 revenue increased 30% year-over-year to $19.35 billion, and adjusted earnings per share (EPS) of $1.92 exceeded market expectations. Notably, core cloud infrastructure revenue more than doubled year-over-year to $7.4 billion, and AI cloud backlog grew by $30 billion, demonstrating strong growth.
Adobe's Q3 revenue increased 13% to $6.76 billion, and adjusted earnings per share (EPS) reached $6.13. However, the residual contract value (RPO) of $22.16 billion fell short of market expectations, and a 18% increase in research and development expenses raised concerns about cost burdens, which negatively impacted the stock price.
TSMC achieved its highest-ever monthly revenue in August, reaching NT$514.8 billion, a 53% year-over-year surge. This achievement was driven by the full utilization of its 3nm, 4nm, and 5nm advanced processes. However, despite these strong results, the stock closed down 1.6% amidst a general sell-off in the semiconductor sector.
CEO Jensen Huang defined AI as global infrastructure and suggested the possibility of 70% revenue growth next year. However, renewed concerns about cyclical financing for AI investments are believed to have negatively impacted the stock price.
Price increases of up to 41% in India and up to 21% in the US were reflected. Major investment banks such as JPMorgan and TD Cowen maintain a positive outlook on Apple, but opinions among brokerages regarding the prospects of a foldable iPhone remain divided.
The company plans to expand its total production capacity to 845,000 liters.
This contract runs from June 2027 to June 2034, with an option to extend for up to three years. The stable scale, representing over 2.5% of last year's revenue, led to a 5% increase in the after-market following the contract news.
Through this partnership, S2W plans to combine OpenAI's frontier models with its security technology and expand its artificial intelligence (AI) red-teaming and threat modeling businesses. The news led to a surge in S2W's stock price.
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