September 3rd Market Overview

Happy Thursday

One Fed governor spoke and the whole September bet changed. Christopher Waller said he could back holding rates steady, traders cut the odds of a hike to a coin flip, and buyers took the invitation across almost every sector.

That really says more about how thin the conviction was in the hike trade than it does about Waller imho.

Let’s dig in...

Today's Big Picture

1. Waller Cools The Hike Trade

Waller said he would support holding rates steady this month if August inflation keeps improving. Traders cut the odds of a September hike to roughly even, down from about two in three a day earlier. He left the door open both ways, saying hot inflation would put a hike back on the table. The next two data prints settle this, not the speeches.

2. Oil Is The Reason This Stays Open

WTI held above $91 and Brent above $95, a fourth straight day higher. Kuwait said it was confronting Iranian missiles and drones, with the conflict now in its seventh month. Energy is the shortest path from that war to American prices. Waller can stay patient only if crude cooperates.

3. Services Are Humming, Hiring Is Not

August services activity came in at 55.4, the strongest since February, with new orders at 60.9. Employment stayed in contraction at 47.8 while prices paid climbed to 72.6. That is the entire Fed argument in one report. Demand is fine, costs are not, and nobody is hiring into it.

Market Overview

Index Performance

Stock spotlight

Snowflake $SNOW ( ▲ 16.91% )  
led the market higher after posting $1.55 billion in revenue and 62 cents in adjusted earnings. The CEO credited customers actually using its AI products, and this is the first quarter where that shows up plainly in the numbers.

Broadcom $AVGO ( ▼ 2.53% )  
fell even after beating. Its holiday-quarter forecast of $34.8 billion came in under the $35.03 billion Wall Street wanted, and for a stock this levered to AI, in line is not enough.

Campbell's $CPB ( ▼ 7.78% )  
cut its quarterly dividend to 25 cents from 39 cents and guided fiscal 2027 below estimates. Snack volumes are falling while its meals business grows, so management is betting on people cooking at home.

Tyson Foods $TSN ( ▼ 7.33% )  
now expects its beef unit to lose between $625 million and $775 million this year, worse than its prior range. Cattle are scarce, beef prices are high, and the meatpacker eats the difference.

Big name updates

Microsoft $MSFT ( ▲ 2.79% )  
put a dollar figure on Azure for the first time, $101.9 billion for the fiscal year ended June 30. It also cut its reporting from three segments to two, so the new number arrived with less detail around it.

Nvidia $NVDA ( ▲ 2.01% )  
is buying Hugging Face for roughly $13 billion, with the deal expected to close in 2027. Open models out of China keep gaining ground, and Nvidia just bought the place where developers build the American answer.

Hewlett Packard Enterprise $HPE ( ▼ 0.91% )  
beat estimates and raised its long-term targets, and the stock fell anyway. CEO Antonio Neri said customers are buying everything and expects demand to hold for years.

Dell Technologies $DELL ( ▲ 4.23% )  
rose a second day after lifting its fiscal 2027 forecast earlier this week.

Meta Platforms $META ( ▲ 3.48% )  
gained on the rollout of Muse Spark 1.3, its newest AI model.

Other notable company news

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

Robinhood $HOOD ( ▲ 15.59% )  
led the S&P 500 after Deutsche Bank said contracts tied to company results could top a trillion dollars in volume by 2028.

Coinbase $COIN ( ▲ 9.99% )  
rose with bitcoin back above $81,000, its highest since mid May.

SpaceX $SPCX ( ▲ 7.8% )  
rose after Oppenheimer raised its target to $280, pointing to compute leases signed at two to three times competitor rates.

Today’s Sponsor

Farmers need alternatives to chemical-intensive farming. Greenfield Robotics is already operating in commercial fields: 82 robots, 16 states. Reserve now for 10% bonus shares when you invest.

See Investment Details

Sector Watch

Bond market

Yields came down across the curve. The 10-year sat near 4.76 after touching a 2026 high on Wednesday, and the 2-year led the move as hike bets came off. The 30-year is still around 5.24, close to where it traded in 2007.

Policy watch

Fed

Vice President JD Vance said the Fed should be lowering rates, tying it to home affordability. That sits awkwardly next to Chair Kevin Warsh, who spent Jackson Hole talking about getting inflation back to target.

Where the rest of them stand:

• Waller would hold if August inflation cooperates.

• Michael Barr said he would back a hike if inflation stays high.

• John Williams said the case for a hike is not firm.

Two weeks out from a decision, that is a lot of daylight between governors.

Fiscal and trade

• The July trade gap widened to $88.6 billion from $71.2 billion in June.

• Capital-goods imports rose $14.4 billion, with computers alone accounting for $6.9 billion.

The AI buildout is now big enough to move the national trade numbers.

What to Watch

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

August Jobs Report

Out Friday morning. Economists expect about 53,000 added, and weekly claims came in at 206,000. Warsh has said inflation weighs on him more than payrolls, so a soft print may not move the September vote much.

Cybercab Event

Tesla $TSLA shows its production robotaxi tonight in Austin. Investors want build dates, deployment plans, and a real answer to Waymo. Thin answers get punished Friday.

Thanks for reading - you are now the more informed 🙂

- John

Today’s Sponsor

The Physical AI Boom Reaches The Farm

Most AI lives on a screen. This kind drives itself through a soybean field at 2 a.m. and cuts weeds to the centimeter, with no herbicide. Greenfield Robotics has 82 machines running across 16 states. This year's fleet sold out, and every robot was delivered. 

The platform keeps adding jobs: weeding now, feeding, spraying, and cover-crop planting on the way. Farmers are done with chemicals linked to Parkinson's and tied to the price of oil. 

The pull is real, and the machines work. Greenfield's Regulation A+ offering lets everyday investors own a stake ahead of the scale-up the company is building toward.

Invest in Greenfield Robotics

^{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.}