Written by: Trend Research

Last week, US stocks ended mixed in the aftermath of interest rate hikes. The Dow Jones Industrial Average fell 1.7% for the week, marking the largest weekly decline since March, while the Nasdaq rose 0.7%, with chips and AI hardware continuing to outperform the market. Over the weekend, tensions in the Middle East escalated once again, with Houthi forces attacking Riyadh and the US and Iran exchanging hardline signals, causing oil prices to rise back above $101 on Monday; meanwhile, high-level US-China discussions on AI, tariffs, and critical minerals took place in New York. This week, US stocks will face a triple variable of high interest rates, high oil prices, and policy changes.

Chip stocks rose for the fourth consecutive day, with the Philadelphia Semiconductor Index outperforming the market for the week

The Philadelphia Semiconductor Index rose 2.78% to 11921.69 points last Friday, marking its fourth consecutive day of gains. SanDisk rose about 11%, Lumentum rose over 4%, and chip equipment stocks remained strong.

The S&P 500 gained 0.17% to close at 7650.50 points, the Nasdaq rose 0.40% to 26522.550 points, and the Dow fell 0.18% to 51682.64 points. The VIX fell 4.08% to 14.81.

The market breadth remained weak, with the number of declining stocks on the New York Stock Exchange and Nasdaq outnumbering those that rose. The seven giants showed mixed performance, with Nvidia up 1.34%, Amazon up 1.00%, and Google up 0.64%; while Apple fell 0.26%, Tesla fell 0.53%, Microsoft fell 0.80%, and Meta fell 2.43%. The Nasdaq Golden Dragon China Index rose 0.76% to 5787.39 points.

At the beginning of the week, the AI safety controversy caused chip stocks to drop sharply, but subsequently, optical communication, storage, and chip equipment stocks regained lost ground first. The index did not see significant gains, but the strong direction within tech stocks became increasingly concentrated. The recent rise in SanDisk is directly related to the rising prices of storage chips, indicating that funds are shifting towards hardware with clear performance support.

10-Year US Treasury Yield Returns to 5%, Rate Hike Pricing Rises to 55%

Interest rate pressures resurfaced last Friday. The yield on the 2-year US Treasury rose to 4.76%, and the 10-year yield climbed to 5.01%, breaching the 5% threshold again. The Federal Reserve has just initiated a new round of rate hikes, with the market pricing in another 25 basis point hike in October at around 55%.

High interest rates continue to put pressure on growth stock valuations, yet semiconductors are still able to outperform the market, indicating that recent industry catalysts and performance expectations have provided stronger support for some tech stocks.

WTI crude oil fell 1.58% to $100.30 per barrel on Friday, and Brent crude fell 0.93% to $104.87 per barrel. Spot gold rose 1.2% to around $4390.

Bitcoin Returns to $80,000, Crypto Concept Stocks Surge

Bitcoin surged nearly 6% last Friday, returning to $80,000, while Ethereum rose to around $2611.

Coinbase rose about 12%, Strategy rose about 15%, and Robinhood surged nearly 9%. Previously, the advancement of the US cryptocurrency market structure legislation faced obstacles, putting pressure on the sector; however, recent progress on tokenized stocks and digital assets regulation has led to a rapid rebound in crypto assets.

Regulatory momentum remains the most direct catalyst for this sector, and attention continues this week on whether there will be new developments in US digital asset policy.

Buffett Steps Down as Berkshire Chairman

Berkshire Hathaway completed a new round of leadership transition last Friday. The 96-year-old Warren Buffett officially stepped down as chairman, taking on the role of honorary chairman while remaining on the board, with his eldest son Howard Buffett succeeding him as non-executive chairman.

Greg Abel took over as CEO earlier this year and is responsible for daily operations and major capital allocations. Berkshire currently has cash reserves close to $365 billion, and the use of funds after the succession will become an important window for the market to observe Abel.

Middle East Escalates Again Over the Weekend, Oil Prices Rise Above $101

After oil prices had just receded on Friday, the situation changed again over the weekend.

The Houthi forces launched missile and drone attacks on Saudi Arabia's capital Riyadh, and the US subsequently issued a security alert. Trump reiterated his demand for Iran to reach an agreement on Sunday, while the Iranian military warned that any new military actions would trigger continued retaliation.

Transport through the Strait of Hormuz remains restricted, and risks in the Red Sea routes have risen again. On Monday morning in Asia, WTI returned to around $101, while Brent crude remained above $104.

If oil prices continue to rise, it will push inflation expectations higher and may strengthen the market's pricing for subsequent rate hikes. Kashkari reiterated over the weekend that inflation pressures in the US have spread to sectors such as services, with energy prices still being a significant variable.

US-China Talks Focus on AI and Critical Minerals

US Treasury Secretary Yellen and Chinese Vice Premier He Lifeng began discussions in New York on Sunday, preparing for the upcoming meeting between Trump and Xi Jinping this week.

The discussions included AI safety, tariffs, rare earths and critical mineral supplies, as well as agricultural products and Boeing aircraft procurement. The most significant impacts on US stocks remain AI, semiconductor policies, and critical mineral supplies.

If new arrangements regarding related policies emerge, Nvidia, semiconductor equipment, automotive, and aerospace sectors may quickly respond.

This Week's Focus

Wednesday: Federal Reserve officials will speak. Following the rate hike, several Federal Reserve officials will make speeches. If hawkish signals continue to be released, the pricing for an October rate hike may rise further from 55%; if the tone turns dovish, long-term rates may see a temporary respite.

Follow-up developments in US-China talks. This week, both sides will continue discussions on AI, semiconductors, tariffs, and critical minerals. If specific progress is made, Nvidia, semiconductor equipment, rare earth supply chains, and Boeing may all be affected.

Can Bitcoin hold above $80,000? The recent relationship between crypto assets and US Treasury yields has been unstable, and the influence of regulatory changes has noticeably increased. If Bitcoin continues to strengthen and drives crypto concept stocks up, it indicates a rising risk appetite in the market; if it falls back, it means that funds are still contracting in a high-interest rate environment.