Overnight U.S. Stocks | All Three Major Indexes Fall, 10-Year Treasury Yield Hits Nearly 20-Year High, Oil Prices Volatile, Gold Drops Nearly 4%

According to Zhitong Finance APP, on Monday, all three major indices fell, with technology stocks leading the decline. The U.S. 10-year Treasury yield climbed by 7 basis points to 5.23%, reaching a near 20-year high. International oil prices fluctuated sharply due to news related to U.S.-Iran talks and the Middle East situation. Spot gold dropped nearly 4%.

[U.S. Stocks] At the close, the Dow Jones Index fell 347.11 points, or 0.67%, to 51,481.51 points; the S&P 500 Index dropped 59.72 points, or 0.77%, to 7,683.69 points; the Nasdaq Composite Index slipped 248.34 points, or 0.92%, to 26,820.38 points. MongoDB (MDB.US) closed down more than 18%, marking its worst single-day performance since March; Qualcomm (QCOM.US) fell over 7%, SK Hynix (SKHY.US) and Intel (INTC.US) fell more than 5%, while Nvidia (NVDA.US) rose more than 1%.

[European Stocks] The German DAX30 Index dropped 34.22 points, or 0.13%, to 25,374.42 points; the UK FTSE 100 Index fell 10.37 points, or 0.10%, to 10,684.88 points; the French CAC40 Index rose 0.68 points, or 0.01%, to 8,078.48 points; the Euro Stoxx 50 Index rose 6.53 points, or 0.10%, to 6,309.35 points; the Spanish IBEX35 Index dropped 99.80 points, or 0.51%, to 19,600.30 points; and the Italian FTSE MIB Index fell 107.03 points, or 0.21%, to 51,759.90 points.

[Asia-Pacific Stock Markets] Nikkei 225 Index dropped 0.73%, Korea’s KOSPI Index fell 2.70%, India’s BSE SENSEX dropped 1.52%, and the Indonesia Composite Index fell 1.51%.

[Forex] The U.S. dollar index (DXY), which measures the dollar against a basket of six major currencies, rose 0.14% to 101.17.

[Cryptocurrency] Cryptocurrencies declined. Bitcoin fell more than 1% to $83,190; Ethereum slipped 0.12% to $2,673.09.

[Precious Metals] On Monday (September 28) at the close in New York, spot gold dropped 4.01% to $4,112.84 per ounce; spot silver fell 5.68% to $60.6452 per ounce.

[Crude Oil] WTI November crude oil futures closed up 0.20% at $92.60 per barrel. Brent November crude oil futures settled up 0.92% at $105.28 per barrel. Oil prices seesawed amid multiple “breaking news” events: the resumption of Saudi east-west pipeline exports pressured prices, rumors of an explosion in a Saudi city pushed prices higher, but then reports of “Iran agreeing to suspend uranium enrichment” sent prices down again, while “large divergences in U.S.-Iran negotiations” caused a rebound in oil prices.

[Metals] LME copper futures settled down $210 to $14,413/ton. LME aluminum futures fell $16 to $3,252/ton. LME zinc futures dropped $47 to $3,852/ton. LME lead futures fell $27 to $1,902/ton. LME nickel futures dropped $150 to $16,179/ton. LME tin futures fell $47 to $3,852/ton. LME cobalt futures dropped $500 to $39,140/ton.

[Macro News]

Trump says U.S. and Iranian representatives have exchanged messages through a mediator; U.S. media claim nuclear talks send positive signals. President Trump stated at the White House on the 28th that U.S. and Iranian negotiators have exchanged messages via a mediator. When asked about the progress of U.S.-Iran negotiations, Trump did not disclose specifics, only saying, “We will win,” and “The situation will have an outcome soon.” Earlier that day, media reported that indirect U.S.-Iran talks began on the morning of the 28th. Previously, Iranian media stated that Foreign Minister Araghchi would lead the Iranian delegation to meet with mediators in New York on the morning of the 28th to discuss the latest proposals on the current situation. Notably, U.S. media reported that U.S. officials revealed Trump was willing to reduce sanctions on Iran and release frozen Iranian funds in exchange for “concrete progress” on the nuclear issue. Saudi media reported Iran had agreed to suspend uranium enrichment in exchange for the U.S. easing sanctions. However, Trump later denied the U.S. media reports.

The U.S. 2-year Treasury yield is approaching the 5% mark, and the 10-year Treasury yield has reached its highest level since 2007. On Monday (September 28) at the close in New York, the U.S. benchmark 10-year Treasury yield rose by 7.56 basis points to 5.2361%, trading between 5.1899%-5.2719% throughout the day and steadily expanding gains, approaching the Q2 2007 high of 5.3228% by 23:00 Beijing time. The 2-year Treasury yield climbed 7.89 basis points to 4.9305%, trading in the range of 4.8869%-4.9534% through the session and nearing the April 30, 2024 intraday high of 5.0434%. The 20-year Treasury yield rose 5.31 basis points to 5.6011%, peaking at 5.6436%, a record since data collection began in 2020. The 30-year Treasury yield added 5.61 basis points to 5.5466%, reaching as high as 5.5794%, closing in on the Q3 2009 top of 5.8610%.

“Big Short” Burry: The AI bubble may burst sooner than initially thought. The investor, known for aggressively shorting the U.S. housing market ahead of the 2007-2009 global financial crisis, said he is converting his core short positions in AI stocks into put options for more cost-effective leverage in a shorter time frame. In his Monday investment newsletter, Burry wrote: “Fundamentally, I am moving up my timeline.” “Therefore, I want short positions with more leverage. A better timeline makes more leverage acceptable. Speaking of leverage, nothing fits better than options—in this case, put options—which are relatively cheap given the exceptionally tight VIX and other volatility indicators.”

Fed Governor Cook: The productivity boost from AI is not enough to offset near-term inflation pressures. Cook stated that the productivity improvements brought by AI in the future may not be sufficient to offset recent price pressures, warning that this trend could raise inflation across the broader economy. The Fed official pointed out that large-scale data center investments have increased competition for shared resources such as energy and construction labor. Over the past year, electricity and water prices have each risen about 5%. In the context of businesses having deployed only a small portion of the promised $2 trillion in capital—and AI-fueled stock market gains boosting consumption—she warned that broader price pressures may appear. Cook expects productivity gains to bring “moderate disinflation” in the coming years but also cautions that she does not see these effects arriving in time to offset the increasingly widespread inflation pressures later this year. Cook said this month’s Fed rate hike was in response to persistently high inflation and emphasized that future policy would depend on economic data. She also said the labor market appears ready to withstand rate hikes, noting that the unemployment rate is trending downward and other metrics suggest the job market is “roughly balanced and gradually improving.”

Deutsche Bank: Copper prices may surge over 50% in six months due to supply shortages. Deutsche Bank expects copper prices to rise more than 50% over the next six months to $22,050 per ton as buyers compete for dwindling inventories. Copper prices have already seen significant gains this year, with expectations that the U.S. government may impose tariffs on refined copper, prompting large inflows into the U.S. market and exacerbating tightness elsewhere. Daniel Ghali, Deutsche Bank’s head of metals research, wrote in a report, “Metal markets around the world are engaged in an unprecedented scramble for copper. As each market tries to retain copper within its jurisdiction, we anticipate the global benchmark price for copper will continue to rise.” Deutsche Bank projects copper prices will climb to $22,050 per ton by Q2 2027, at which point demand restraint may accelerate. Ghali wrote that if current stockpiling rates persist, unrestricted, freely available inventories will approach zero by the end of 2028. This theoretical “inventory exhaustion” level is the point the market must avoid through higher prices. According to Deutsche Bank’s estimate, freely available copper inventories are presently at their lowest on record.

[Company News]

Major Milestone! SpaceX (SPCX.US) Starship achieves first orbital flight but mission ends early, deploying 26 V3 Starlink satellites. SpaceX’s flagship rocket, Starship, successfully reached Earth’s orbit for the first time on Monday, completing the commercial space company’s most ambitious mission to date. This marks a critical transition from suborbital testing to orbital flight for the $15 billion-plus vehicle, which has been in development for nearly a decade. Despite one engine shutting down prematurely during the flight, the spacecraft continued to execute key maneuvers as engineers made real-time assessments, ultimately reaching the planned orbit. The mission was initially set to last about 10 hours and complete six Earth orbits, but SpaceX decided to end the mission early. The flight team is expected to command Starship to deorbit three hours after reaching orbit. During the mission, Starship also deployed 26 V3 version Starlink satellites for the first time. Elon Musk posted on X that these V3 satellites are operating normally. The V3 Starlink satellites each have approximately ten times the download capacity of the current V2 satellites.

AMD (AMD.US) acquires World Labs for $8.2 billion, with Fei-Fei Li appointed as chief scientist. AMD is making a major all-stock transaction wager on the next frontier of AI—understanding and simulation of the physical world. On September 28, AMD announced it would acquire AI startup World Labs for about $8.2 billion in an all-stock deal. Co-founded by renowned AI research pioneer Fei-Fei Li, who serves as CEO, World Labs specializes in spatial intelligence and 3D environment simulation. After the transaction closes, Fei-Fei Li will join AMD as executive vice president and chief scientist, reporting directly to CEO Lisa Su. The acquisition is expected to complete by the end of 2026, pending regulatory approval and closing conditions. This move means AMD aims to internalize research capabilities into a chip design driver, positioning itself to compete directly with Nvidia in physical AI fields such as robotics and simulation.

MongoDB (MDB.US) closes down over 18%, posting its worst single-day performance since March. On Monday, MongoDB closed down 18.46% at $334.68. News broke that CEO Chirantan “CJ” Desai abruptly resigned to lead the newly established enterprise platform business at Meta Platforms (META.US). MongoDB’s board has named Dev Ittycheria as interim president and CEO. The board has initiated a formal search for a successor with the help of an executive search firm.

Navitas Semiconductor (NVTS.US) obtains U.S. government contract, shares surge after hours. As of press time, Navitas Semiconductor shares soared more than 16% in after-hours trading on Monday. The company stated it has received a contract from the U.S. Army Research Laboratory for the ALATTIS project, aimed at developing next-generation 10 kV silicon carbide power semiconductor technology for defense applications. ALATTIS stands for “Accelerated Large Area 10 kV Silicon Carbide Insulated Gate Bipolar Transistor Prototype Project.” The effort is to develop domestic manufacturing processes for 10 kV silicon carbide IGBT and PIN diode devices. The project is funded by the U.S. Army Research Laboratory under the DEVCOM framework and supported by JETX. Details such as contract value, duration, and location were not disclosed in the announcement.