September 2nd Market Overview

Happy Wednesday

Three days of selling, then buyers finally showed up today.

The 10-year hit its highest level since November 2023 overnight and stocks went green anyway by close

Let’s dig in...

Today's Big Picture

Yields blinked first

Traders walked in this morning pricing a September hike at close to seven in ten odds, up from about one in three a week ago. Then John Williams said the case for one is not firm yet, and yields reversed across the curve. One sentence from the number two man at the Fed undid the entire overnight move. That is positioning unwinding, not something breaking.

Hiring cooled, and that helps

Private employers added 38,000 jobs in August against the 47,000 economists expected, with health care doing most of the lifting. A softer labor market is the cleanest argument the doves have going into the September 15-16 meeting. Friday's government report is the last big number before that call, and right now it is the one that can take the hike back off the table.

Dell says the AI demand scare is overdone

Dell closed the quarter with a $95 billion backlog, booked $60.9 billion in AI server orders, and raised its full-year revenue target by $25 billion. That is not what peak demand looks like. Broadcom reports after the close tonight and gets the chance to say the same thing twice.

Market Overview

Index Performance

Stock spotlight

Dell Technologies $DELL ( ▲ 13.54% )  
posted record revenue of $47 billion and booked $60.9 billion in AI server orders. The new full-year target is $192 billion.

Uber $UBER ( ▲ 2.13% )  
is cutting 3,300 jobs and thinning out its management layers. The savings go into drivers, couriers and self-driving, and almost nobody keeps working from home.

PG&E $PCG ( ▼ 6.4% )  
is cutting next year's capital budget to $11.4 billion from $13.4 billion after California lawmakers left the wildfire liability question unsettled. CEO Patti Poppe says those unfinished rules are what keep the utility below investment grade, and customers pay for it in borrowing costs.

Big name updates

Apple $AAPL ( ▲ 0.24% )  
has a new CEO. John Ternus took over from Tim Cook this week, Cook stays on as executive chairman, and the iPhone event is days away with the Siri question still open.

Chevron $CVX ( ▲ 0.48% )  
is putting $7 billion into Venezuelan heavy oil over five years, which would double its output there to 600,000 barrels a day. Production in the country is already climbing this year.

Berkshire Hathaway $BRK.B ( ▲ 0.62% )  
wants the data center power business. Greg Abel said he always figured energy would be the constraint on the AI buildout, and Berkshire's utility arm will serve hyperscalers as long as other customers' rates don't move.

Other notable company news

Blue Chips
MarketBeat names and lists “7 Blue-Chip Stocks to Add To Your Forever Portfolio”

GitLab $GTLB ( ▲ 9.71% )  
beat on both lines in the second quarter and led the morning's gainers.

MongoDB $MDB ( ▼ 14.01% )  
beat expectations, guided higher, and the stock fell anyway. When a beat gets sold like that, expectations were doing the heavy lifting.

Credo Technology $CRDO ( ▼ 19.94% )  
missed on gross margin by three tenths of a point. That was enough to outweigh beats on revenue and earnings.

Nokia $NOK ( ▼ 0.76% )  
rejoins the Stoxx 50 later this month, taking the spot Volkswagen $VWAGY looks set to lose while it shuts four German plants.

Today’s Sponsor

The Next Robotics Category Is Agriculture

If you eat food, you should care about what happens in the fields that grow it. Greenfield Robotics is building robots designed to reduce reliance on herbicides: 82 robots in 16 states for six years. Reserve now for 10% bonus shares when you invest.

See Investment Details

^{Greenfield Robotics is Testing The Waters under tier 2 of Regulation A. No money or other consideration is being solicited, and if sent in response will not be accepted. No offer to buy the securities can be accepted and no part of the purchase price can be received until the offering statement filed by the company with the SEC has been qualified by the SEC. Any such offer may be withdrawn or revoked, without obligation or commitment of any kind, at any time before notice of acceptance given after the date of qualification. An indication of interest involves no obligation or commitment of any kind. “Reserving” shares is simply an indication of interest. There is no binding commitment for investors that reserve shares in this manner to ultimately invest and purchase the shares reserved of the company, or to purchase any shares of the company whatsoever.}

Sector Watch

Bond market

The two year yield passed its high for the year at 4.375. The 30-year got back to 5.286, right where it sat the day before Bessent stepped in to knock it down last month. That intervention is now fully unwound.

Policy watch

Fed

Williams did the talking today and he did not sound like a man in a hurry. He called the tariff and energy increases partly one time effects and said there's no clear evidence yet that policy has to move. Coming from the second ranking voice on the committee, that reads as the center of the Fed keeping its options open.

Next week's inflation report is the last real input before the September 15-16 meeting.

Trade

• Commerce Secretary Howard Lutnick said the administration is drafting semiconductor tariffs, and every major chipmaker already knows they're coming.

• He also said tariff revenue is heading toward $400 billion a year, which he expects to shrink the deficit and pull rates down inside six months.

Treasury Secretary Scott Bessent said at the G-20 that the world is awash in debt and the only way out is to grow out of it. He added that one month of bond market action doesn't mean much. Traders can price how much comfort that's worth.

International

The US said its latest strikes on Iran followed attempted IRGC attacks on commercial shipping and on American forces. A tanker was hit by three projectiles crossing Hormuz on Monday.

What to Watch

The AI Infrastructure's Backbone
10 Stocks Powering the AI Buildout

After the close

Broadcom $AVGO, Hewlett Packard Enterprise $HPE and Snowflake $SNOW all report tonight. Broadcom's AI outlook sets tomorrow's tone.

Thursday

Christopher Waller, Beth Hammack and Austan Goolsbee all speak, with July trade figures, jobless claims and services data in the morning. Waller is the one to listen to.

Thanks for reading - you are now the more informed 🙂

- John

Today’s Sponsor

Blu Dot surpasses 2,000% ROAS with self-serve CTV ads

Home furniture brand Blu Dot blew up on CTV with help from Roku Ads Manager. Here’s how:

After a test campaign reached 211,000 households and achieved 1,010% ROAS, the brand went all in to promote its annual sales event. It removed age and income constraints to expand reach and shifted budget to custom audiences and retargeting, where intent was strongest.

The results speak for themselves. As Blu Dot increased their investment by 10x, ROAS jumped to 2,308% and more page-view conversions surpassed 50,000.

“For CTV campaigns, Roku has been a top performer,” said Claire Folkestad, Paid Media Strategist, Blu Dot. “Comping to our other platforms, we have seen really strong ROAS… and highly efficient CPMs, lower than any other CTV partner we've worked with.”

Using Roku Ads Manager, the campaign moved from a pilot to a permanent performance engine for the brand.

Learn more