The Zhitong Finance App learned that on Friday, the NASDAQ index closed down 0.3%, the S&P 500 index fell 0.4%, and the Dow Jones index fell 0.5%. The three major US stock indices closed slightly lower due to the impact of non-agricultural data exceeding expectations. However, this Monday coincides with the US Labor Day holiday. The US stock market is closed for one day. After taking a short break, investors will face a tight trading week.
The US PPI and CPI for August will be announced on Thursday and Friday, respectively. These are the last batch of important inflation data before the Federal Reserve's September 15-16 interest rate meeting. Interest rate hikes are expected to be definitively verified. Meanwhile, Apple (AAPL.US) will launch a new fall product launch. This is also the first press conference since the new CEO John Turnus took over; while the earnings report of Oracle (ORCL.US) is viewed by Wall Street as a key part of testing the “success” of AI demand.
US PPI and CPI hit hard, and interest rate hike expectations are facing critical verification
Last week's employment report tilted market consensus towards the Fed's September rate hike. In this context, investors' attention will be focused directly on Friday's consumer price index (CPI) — this data will allow Fed policymakers to examine the current state of inflation that has been above target for five consecutive years. Meanwhile, Thursday's producer price index (PPI) will first give clues about price changes from the wholesale side.
Prior to the release of the non-agricultural data last Friday, the market was basically betting on whether the Federal Reserve would raise interest rates in September. Previously, the market expected non-farm payrolls to increase by only 55,000 people in August. However, according to data from the US Bureau of Labor Statistics, 162,000 new jobs were added in the US in August, far exceeding Wall Street's most optimistic predictions, and the market's bets on the Federal Reserve's September meeting to raise interest rates increased.
Economists and market observers point out that the real test for Federal Reserve Chairman Kevin Walsh and the Federal Open Market Committee (FOMC) lies in this week's inflation data, because Walsh has clearly regarded price stability as his primary goal in charge of the Federal Reserve. Bill Adams, chief economist at May 3 Commercial Bank, wrote in the report: “As far as the Federal Reserve is concerned, the employment report clearly points the focus of the next meeting to the issue of inflation. The next decision will be very delicate. The upcoming CPI and PPI data for August may determine whether the Federal Reserve will raise interest rates or stay on hold.”
This view echoes Walsh's first keynote address at the Jackson Hole Global Central Bank Annual Meeting. In his speech, he stressed that the Federal Reserve's 2% inflation target is unwavering, and that it is the responsibility of the Federal Reserve to curb overheating inflation. Walsh said bluntly: “Price stability will not be achieved automatically, and inflation will not necessarily return to average. The Federal Reserve's role is to keep prices stable.”
Today, inflation has been above the 2% target for about five consecutive years, and Walsh has continuously emphasized the inflation issue in every public meeting. Investors can't help but ask: When will the Federal Reserve take action? The direction of this debate will become clear this Friday.
The ECB is expected to raise interest rates, and expectations of global austerity are heating up
The ECB will announce its latest interest rate decision on Thursday, and the market generally expects it to raise interest rates by 25 basis points. This judgment is based on the fact that the Eurozone inflation rate soared to 3.3% in August, hitting a new high in nearly three years, far exceeding the ECB's target level of 2%.
ECB Executive Director Schnabel also warned that high energy costs may keep inflation above the 2% target for a long period of time, and we need to be wary of the “second round effect” being transmitted to wages and broader prices.
According to the survey, the 65 economists interviewed unanimously predicted that interest rates would be raised this week, but the more critical difference is the follow-up signal — if the ECB clearly suggests “stopping” after raising interest rates, it will set the shortest interest rate hike cycle since 2011; however, if President Lagarde emphasizes that inflationary pressure has not subsided, it will open the door for a third rate hike in the year, and expectations of global austerity will heat up again.
Carsten Brzeski, head of global macroeconomics at ING, believes that against the backdrop of pressure on public finances and rapid rise in bond yields, it is difficult for the ECB to choose further tightening. He said that in the face of typical supply-side shocks, if the ECB continues to raise interest rates, it may increase the risk of economic recession.
Apple press conference: folding screen unveiled, Tenus' first big test
Another major market catalyst this week comes from the consumer electronics sector — on September 9 local time (September 10 at 1 a.m. Beijing time), Apple will host a new fall product launch. This is also the first major product show after new CEO John Turnus succeeded Tim Cook.
The biggest suspense at this press conference was the first folding screen iPhone, which has been rumored for a long time. At the same time, high-end models such as the iPhone 18 Pro and iPhone 18 Pro Max will also be unveiled at the same time, but the latter is more focused on price increases. According to TrendForce estimates, the overall cost of the iPhone 18 Pro increased by nearly 40% year-on-year due to rising storage prices.
According to an article published by well-known journalist Mark Gurman, although Cook will appear at the press conference, he will not appear in the event video. This move also marks the full completion of the transfer of power.
Oracle Earnings Report: Can IaaS Growth Shatter Financing Anxiety?
Another highlight in the tech sector is Oracle's quarterly results on Thursday — this will also be the last hyperscale cloud vendor's earnings report for the current cycle. Analysts will look for signals about its data center expansion progress and financing strength.
Oracle's stock price has fallen by nearly 20% since the beginning of the year, with a cumulative decline of nearly 30% over the past 12 months, mainly due to market concerns that it is borrowing heavily for data center construction. However, Bank of America analyst Tal Liani remains optimistic about Oracle's earnings report, even as the stock price recovers and financial concerns have surfaced.
Liani wrote in the report that as Oracle “expands its data center layout,” its infrastructure-as-a-service (IaaS) revenue is expected to increase 25% month-on-month and surge 116% year-on-year. He pointed out that the acceleration of the company's infrastructure will support the acceleration of revenue growth, while customer advance payments are expected to ease financing concerns that previously dominated the market narrative. Liani wrote on Friday: “We are optimistic about Oracle's risk-reward ratio because we believe Wall Street's agreed expectations have taken into account the challenges facing its balance sheet, but have not fully taken into account the accelerated revenue growth that may be brought about after reaching data center construction milestones.”
Liani also cautioned that although most attention is focused on Oracle's infrastructure business, its software products should not be ignored. Bank of America expects cloud SaaS (Software as a Service) revenue to grow by 12.8% this quarter, up from 10.3% in the previous quarter. Liani wrote, “Although Oracle's stock story mainly revolves around infrastructure, we believe its traditional software business is still a part of the investment logic that cannot be ignored.”
The US-Iran conflict heats up: How does the oil price storm hit the ballot box?
The military conflict between the US and Iran continues. The US military says it recently attacked 3 Iranian oil tankers. In response, Iran attacked a number of oil tankers and American ships, while warning ships in the Persian Gulf to avoid passing through illegal waterways. On Monday, WTI crude oil futures rose more than 1% to 92.57 US dollars/barrel.
Notably, the energy market crisis is spreading. Diesel prices in the US soared to an all-time high last Friday. The war in Iran and the Russian-Ukrainian conflict continued to put structural pressure on the already tight global “main fuel” market, driving prices to continue to rise. According to data from the American Automobile Association (AAA), the average retail diesel price rose to $5.85 per gallon last Friday, far surpassing the historical record of $5.816 set in June 2022. It was just a few months after the Russian-Ukrainian conflict broke out, and the European energy crisis had just begun.
Diesel is an indispensable fuel for the global economy, supporting all aspects of global commodity trade — whether it's large trucks that shuttle from place to place or the huge fleet of freighters that maintain the shipping market, all rely on diesel. The conflict between the US and Iran has cut off the supply of refined oil products in the Persian Gulf region, and ongoing attacks on Russian refineries by the Ukrainian military have also caused part of the production capacity of this major global diesel supplier to shut down. In 2025, the Middle East and Russia together account for about one-third of global diesel exports.
In the US, distillate fuel stocks, including diesel and gasoline, are currently at their lowest level in the same period on record. These shortages coincide with the Northeast region entering the winter heating season, when fuel demand usually rises sharply as consumers turn on heating. Patrick DeHaan, vice president of petroleum analysis at GasBuddy, said, “The price of diesel in the US has never been higher, and then it will gradually spread to every product consumers buy. Record diesel prices will begin to infiltrate the entire economy.”
The sharp rise in diesel prices is also putting new political pressure on the Trump administration. With less than two months left until the US congressional midterm elections, the continued rise in fuel prices may become an issue that is difficult for the government to avoid.
Furthermore, the US Treasury Department will launch the previously announced “double” US debt repurchase program this week, and the relevant adjustments will take effect on September 9. The US Republican National Committee is scheduled to hold its first midterm election conference from September 9 to 10. Trump and Vance are expected to deliver keynote speeches at the conference. The market will focus on economic policy proposals such as tariffs, finance, and immigration.