Overnight US Stocks | S&P 500 and Nasdaq Reach All-Time Highs, Storage Concept Stocks Plunge, SK Hynix (SKHY.US) Drops Over 6%
At the close, the Dow Jones Index rose by 253.32 points, or 0.49%, to 51,521.22 points; the S&P 500 Index increased by 45.03 points, or 0.58%, to 7,818.98 points; and the Nasdaq Composite Index gained 122.48 points, or 0.45%, to 27,599.79 points.
According to Zhichong Finance APP, on Tuesday, the three major stock indices closed higher, with the S&P 500 and Nasdaq hitting historical highs. The S&P 500 index closed above 7,800 points for the first time. U.S. Treasury Secretary Janet Yellen insisted that the government’s debt burden is manageable. Yellen tried to reassure investors, saying a combination of economic growth and spending limits will "soon" begin to alter the U.S. government’s borrowing trajectory. In a fireside chat Monday night in Pennsylvania, she stated that the government will begin to "reverse this trend".
[U.S. Stock Market] At the close, the Dow Jones index rose 253.32 points, or 0.49%, to 51,521.22 points; the S&P 500 index was up 45.03 points, or 0.58%, at 7,818.98 points; the Nasdaq Composite rose 122.48 points, or 0.45%, to 27,599.79 points. Storage concept stocks plunged, with Seagate Technology (STX.US) down 9%, Western Digital (WDC.US) nearly 7% lower, Moderna (MRNA.US) off 7.7%, and SK Hynix (SKHY.US) more than 6% down. The Nasdaq Golden Dragon China Index gained 0.3% at the close, with Alibaba (BABA.US) falling by more than 1%.
[European Stocks] The German DAX30 index rose by 197.98 points, or 0.78%, to 25,452.19; the UK FTSE 100 gained 43.33 points, or 0.41%, to 10,541.27; the French CAC40 increased 30.97 points, or 0.40%, to 7,865.07; the Euro Stoxx 50 was up 30.81 points, or 0.49%, to 6,272.95; Spain’s IBEX35 index rose 139.98 points, or 0.73%, to 19,439.68; and Italy’s FTSE MIB index gained 425.12 points, or 0.84%, to 51,243.50.
[Asia-Pacific Markets] The Nikkei 225 index climbed 1.05%, Korea’s KOSPI fell 0.89%, and Indonesia’s Composite Index rose 1.21%.
[Foreign Exchange] The U.S. Dollar Index, which measures the greenback against six major currencies, dropped 0.33% for the day, closing at 101.833 in late forex trading. By the close in New York, 1 euro traded for 1.1261 U.S. dollars, up from 1.1215 in the previous session; 1 British pound traded for 1.3277 U.S. dollars, up from 1.3219. 1 U.S. dollar exchanged for 158.12 Japanese yen, up from 158.00; 1 U.S. dollar was quoted at 0.8313 Swiss francs, up from 0.8307; 1 U.S. dollar traded for 1.4209 Canadian dollars, down from 1.4256; 1 U.S. dollar exchanged for 9.9861 Swedish kronor, lower than 10.0403.
[Cryptocurrency] bitcoin hovered near $85,000, quoted at $85,575 at press time; ethereum fell 0.69% to $2,696.
[Precious Metals] Spot gold was quoted at $4,163.82 per ounce; spot silver at $61.364 per ounce.
[Crude Oil] The price of light crude oil futures for November delivery on the New York Mercantile Exchange rose 1 cent to settle at $89.44 per barrel, up 0.01%; December delivery Brent crude futures on the London market increased by 26 cents to close at $100.58 per barrel, up 0.26%.
[Macro News]
Federal Reserve’s Daly: AI, Tariffs and Energy Shocks Could Require Further Rate Hikes if Persistent. San Francisco Fed President Mary Daly stated that the AI boom may boost chip demand beyond high-end AI chips to the broader semiconductor market. Some companies have begun to lock in storage chip supplies in advance, even redesigning products to reduce chip use. She thinks the price pressure from this AI wave might not be a one-off shock, and relief could take longer than the Fed’s usual assumption of one to three years. Daly said she fully supports the Fed’s September rate hike, and whether more action is needed depends on whether shocks from AI, tariffs, and Mideast-driven energy prices dissipate; if such factors persist longer or combine, further tightening may be needed. If the shocks are temporary, further rate hikes may not be necessary.
Fed Governor Bowman: Fed to Reshape Bank Regulatory System and Reassess Asset Threshold for Tighter Oversight. The Federal Reserve plans a sweeping overhaul of its U.S. banking regulatory system, shifting current bank inspection oversight from district Fed presidents to a new structure giving its Washington headquarters clearer responsibility. The Fed’s top banking supervisor unveiled the reform plan Tuesday. Michelle Bowman, the Fed’s vice chair for supervision, said the overhaul will divide the country into five banking supervisory regions, each led by a "regional head." In prepared remarks for a St. Louis Fed event, Bowman said the current structure "weakens the vital link between responsibility and accountability." Bowman stated: "The Fed’s supervisory function will be realigned to foster a culture of accountability and clear decision-making authority." Under the new arrangement, the five regional heads will oversee all supervisory activity in their respective areas, though actual inspections will remain handled by local Fed Reserve Bank staff. Bowman also announced the Fed will consider adjusting the asset-size threshold, which determines at what size a bank faces stricter regulatory requirements, later this year.
JPMorgan CEO Dimon: Mythos Model Increased Global Cybersecurity Risk ‘Tenfold’. JPMorgan CEO Jamie Dimon said Anthropic’s new AI model, Mythos, has sharply increased global cybersecurity risk. “Since the emergence of Mythos, the risks brought by AI have risen tenfold. AI has created vulnerabilities we didn’t know existed, and we’d already been worried about cybersecurity before those technologies appeared,” Dimon said on Tuesday. He noted AI exposes banks to new kinds of security vulnerabilities that had not existed or been detected before. Dimon said, “The negative side is clearly what you’re seeing about AI agents, Mythos, and other potentially troublesome technologies. Those concerns are reasonable and real.” However, he said he won’t get caught up in debate over whether AI constitutes an “existential threat.” “I won’t get hysterical over questions like ‘Is this an existential threat?’ What we’re doing now is rolling up our sleeves and starting to work on solutions,” Dimon remarked.
Institution: Bank of Canada May Only Hike Twice, First Move Likely Delayed Until Early Next Year. Canada’s Central 1 Credit Union expects the Bank of Canada may only hike rates twice this cycle, with the first move unlikely until early next year—much less aggressive than current market pricing implies. Central 1 economist Bryan Yu said Canada is in a period of elevated uncertainty with the economic outlook changing quickly. Together, surging U.S. and Canadian bond yields, tariff impacts, and large swings in oil prices make policy decision-making harder. Yu said Canada’s core inflation remains close to 2%, while trade uncertainty could slow economic growth by end-2026. Meanwhile, higher bond yields may dampen the real estate rebound and limit the Bank of Canada’s scope and need for further tightening.
[Stock-Specific News]
SpaceX Plans to Raise $40 Billion to Buy Nvidia Chips. According to reports, SpaceX (SPCX.US) is seeking to raise $40 billion through an Apollo-led financing for purchasing Nvidia (NVDA.US) chips. Insiders say the company plans to raise around $10 billion through bank loans and another $30 billion via investment-grade debt to finance its large-scale chip orders. Private equity group Apollo is expected to lead the deal and help market the debt to a wide group of investors. Pimco is reportedly among a small set of lenders in talks to help finance the transaction. The deal is expected to close in 2027.
Apple Reportedly Teams Up with LG to Expand Smart Home, Plans to Launch Door Locks, Cameras Etc. Media reports quoting sources say Apple (AAPL.US) aims to launch smart doorbells, thermostats, and other smart home devices and is collaborating with LG Electronics to develop peripherals. These products will connect with the enhanced Apple HomePod mini and new Apple TV set-top box to form a smart home ecosystem. Apple is expected to announce these products on October 13th. Jointly developed with Korea’s LG, the new line-up will also include smart door locks and security cameras. Despite the joint development, the products will carry the LG brand. LG will be responsible for production and product support. Through such “second-party supplier” arrangements, Apple can rapidly expand its ecosystem without shouldering the full cost and complexity of supporting a wide range of peripherals.
[Major Brokerage Ratings]
TD COWEN: Lowers American Express (AXP.US) price target from $338 to $335
BNP Paribas: Raises Microsoft (MSFT.US) price target from $549 to $604
Wells Fargo: Cuts United Airlines (UAL.US) price target from $17 to $14
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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Review Article - ROI - For Trump's Treasury, the "tail" of the auction is the toughest part: McKeever
Repeated, no changes to the main text. By Jamie McGeever Reuters, Orlando, Florida, October 6 - U.S. Treasury auctions are supposed to be dull, predictable, and lacking in news value. But these are unusual times, and the Trump administration now faces the risk of weak government bond sales making headlines. The U.S. Treasury plans to issue nearly $120 billion in bonds this week—the first auction of bonds other than short-term Treasury bills in two weeks: $58 billion in three-year notes on Tuesday, $39 billion in ten-year notes on Wednesday, and $22 billion in thirty-year bonds on Thursday. These auctions would ordinarily be inconsequential, but they're attracting increased attention due to the exceptionally weak auction results from September 22–24—particularly the five-year Treasury auction on September 23, which led to the largest jump in yields since April of last year. Since then, yields have not fallen back, and instead, have surged to multi-decade highs across most maturities. It's important to note that the possibility of a "failed" U.S. Treasury auction is nearly zero. The primary dealers—26 banks and institutions currently authorized by the New York Fed to act as Treasury market makers on Wall Street—are always involved. They essentially underwrite the sales, ensuring the smooth operation of the $30 trillion U.S. Treasury market, which is the most liquid in the world. This, in turn, keeps the entire global financial system running. Trillions of dollars of global debt, assets, and market derivatives are benchmarked off U.S. Treasuries. U.S. Treasuries also serve as collateral to "lubricate" the pipes of the U.S. and global financial systems—in repos, interbank lending, and financing. In short, as long as U.S. Treasuries remain the backbone of the global financial system, there will always be buyers in Treasury auctions. The perpetual question is the price at which these bonds ultimately clear. With borrowing costs in the secondary market now at their highest since the mid-2000s, it's reasonable to expect the Treasury will pay correspondingly high rates in the primary market. But as recent auction rounds have shown, there remains potential for negative surprises. “Too big for the market to digest?” The $70 billion five-year auction on September 23 was among the most concerning in recent years. Demand—as measured by bid-to-cover ratio—was the lowest in nine years. The Treasury sold these notes at a yield of 5.033%, more than 3 basis points above the market yield at the auction deadline. Three basis points might not sound like much, but for a five-year Treasury auction, that's highly unusual. This was the largest so-called "tail" since June 2022. JP Morgan analysts pointed out that the last time the five-year auction saw a three-basis-point tail was back in 2011—when the brewing debt ceiling crisis ultimately led to the U.S. credit rating being downgraded that August. Back to today, concerns over the U.S.'s bleak fiscal outlook have pushed up long-term borrowing costs. Consequently, markets widely expect the Trump administration to gradually shift the Treasury's massive funding needs toward the lower-cost, shorter end of the yield curve. That explains why the five-year auction two weeks ago caused such a stir. A three-basis-point tail is common in long-bond auctions, but rare for securities in the so-called "belly" of the curve. If the Treasury is forced to pay a higher premium to move these bonds, then Houston, we have a problem. Large auction tails can be caused by numerous factors, such as market volatility on the day of the auction or, more worryingly, underlying fundamental issues that could erode demand over time. It's usually difficult to distinguish between these dynamics, as they're not mutually exclusive. On the brighter side, this unease hasn't yet spread to the short end of the curve. At least, not for now. Three- and ten-year Treasury yields have risen by about 50 basis points from the last auction a month ago, hovering around 4.96% and 5.32% respectively. The 30-year yield is up about 35 basis points, to 5.65%. That should be high enough to attract strong demand and ensure smooth sales, right? Probably. But if we get a surprise, volatility and uncertainty could ripple across the entire market. Investors will be… watching developments like hawks. (The views expressed herein are those of the author, a Reuters columnist.) Enjoyed this column? Visit Reuters Open Interest, your essential new source for global financial commentary. Follow ROI on LinkedIn and X. You can also listen to the daily "Morning Bid" podcast on Apple, Spotify, or the Reuters app. Subscribe for seven-day-a-week in-depth analysis of market and financial news by Reuters journalists. US 5-year auction has biggest 'tail' since 2022 https://fingfx.thomsonreuters.com/gfx/mkt/dwpkmkzogpm/TAIL.png (For reader convenience, Reuters automatically translates its reports into several other languages. Automate
Will cancelling 20-year U.S. Treasury bonds backfire? BNP Paribas warns it could worsen market sell-off; maintains prediction of 30-year yield rising to 5.8%
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