US Stock Market Preview | Major Index Futures Mixed, Brent Crude Surpasses $97, Broadcom and Hewlett Packard Enterprise Fall After Earnings

Pre-market Market Trends

1. Pre-market on Thursday, September 3rd, U.S. stock index futures were mixed. As of press time, Dow futures were up 0.20%, S&P 500 index futures up 0.07%, and Nasdaq futures down 0.15%.

2. As of press time, Germany’s DAX index was up 0.08%, the UK FTSE 100 was up 0.52%, France’s CAC40 fell 0.25%, and the Euro Stoxx 50 fell 0.07%.

3. As of press time, WTI crude oil rose 1.92% to $92.76/barrel. Brent crude oil rose 1.45% to $97.02/barrel.

Market News

Bond market turmoil and the “September Curse” are key tests for U.S. stocks! Barclays advises investors to reduce risk exposure selectively. Emmanuel Cau, Head of European Equity Strategy at Barclays Bank, stated that seasonal factors in September, the approaching midterm elections, rate volatility, and upcoming AI-related IPOs are further reinforcing reasons for equity investors to selectively lower risk exposure. Among these, rising bond yields are a main concern for stock investors. There is growing concern that rising oil prices will fuel inflation, pushing the 10-year U.S. Treasury yield to 4.8%, close to the 5% level often deemed unfavorable for equities. Market speculation that the Federal Reserve may be forced to raise rates is also increasing, further boosting bond yields. He emphasized: "If the bond market fails to achieve some degree of stability, it's hard to see the stock market continue to climb. I think now is the right time to selectively lower beta risk exposure."

“Fast money” extreme caution may lay the fuse for a rally: Is the S&P 500 targeting 8,000 points? In recent months, investors have adopted a defensive stance in response to market uncertainty. However, when caution becomes consensus, a counterintuitive situation emerges: the real "pain trade" may be to the upside. Though overall positioning remains net long, directional risk exposure for "fast money" is at its lowest level since the "Liberation Day" in April 2025. Data from Goldman Sachs’ Prime Brokerage division show the net leverage of U.S. long-short strategy funds fell to 47.6% last week, with the long-short ratio slightly below 1.6—both at their lowest in the past year. Bobby Molavi, Head of Execution Services at Goldman Sachs EMEA, commented that current positioning is “much cleaner than before.” He believes some market froth has been squeezed out and that retail chase-buying seems to be waning. The next two weeks are a crucial window, as the probability of a rate hike at the Fed’s September 15-16 meeting now nears 70%. Nonfarm payroll and inflation data may either reinforce the current narrative or completely reverse market sentiment. However, with light positioning at present, a market rebound may force fund managers to chase gains.

Schroders turns rare bullish: From “years of underweight” to “slight overweight” betting on a long-term U.S. Treasury rebound. Asset management giant Schroders has recently increased its holding of long-term U.S. Treasuries, believing yields have approached a cyclical peak after this round of sell-offs. Johanna Kyrklund, Schroders’ Global CIO, said regarding the 10-year U.S. Treasury: “From a valuation perspective, current levels are more attractive than before. Given the recent uptick in yields, we believe it’s now appropriate to hold some duration.” This view comes as bond yields in major global markets have surged to multi-year highs. Kyrklund stated: “We judge that current levels are roughly at the top of the current yield cycle. For us, the 4.80%-5% range presents buying value and the potential for a tradable rebound, with yields possibly falling back toward 4.5%.”

Bank of America: Friday’s nonfarm payroll is unlikely to “seal the deal”; September rate hike still hinges on CPI. Amid recent bond market volatility, investors are awaiting two key U.S. data points that could influence Fed decisions: the August nonfarm payroll report this Friday, and the August CPI on September 11. However, Bank of America believes these two data points carry unequal weight for the Fed’s September 15-16 policy meeting. The bank sees the nonfarm report more as an "appetizer," with CPI being the "main course" that will truly decide whether the Fed hikes. BofA analysts said Wednesday: "Nonfarm is unlikely to be the decisive factor for a September hike. A notably weak report could lower the probability, but CPI remains key to whether the Fed actually delivers a hike. We maintain our September hike call." The bank specifically emphasized that inflation remains the Fed’s main concern.

Goldman Sachs bullish on gold to $4,900 by year-end 2026: Derivatives hedging may serve as an “amplifier”—prices could go even higher. Goldman Sachs expects continued central bank diversification of FX reserves will structurally support gold, with prices likely to reach $4,900 per ounce by the end of 2026. The firm believes central bank gold accumulation is not a short-term phenomenon, but a multi-year reserve structure adjustment. Analysts said: “We continue to view central bank gold accumulation at high levels as a multi-year trend, consistent with recent survey evidence—central banks are diversifying reserves to hedge against geopolitical and financial risks.” Goldman expects central banks to buy an average of 50 tons of gold per month through 2026, much higher than the pre-2022 average of 17 tons. In addition, investor demand for call options on gold is increasing, partly to hedge risk from dramatic shifts in government policy. Derivatives demand does not merely provide additional buying for gold, but can also act as an amplifier: hedging buys on the way up may strengthen a rally, while hedging sales on the way down could further suppress prices.

Individual Stock News

Short-term growth fades, but long-term AI compute vision dazzles! Large customers ignite the ASIC supercycle, Broadcom (AVGO.US) stuns with $230 billion AI semiconductor outlook. Data show Broadcom’s third fiscal quarter revenue rose 86% year-on-year to $29.591 billion, beating market expectations of about $29.5 billion. Total AI semiconductor revenue (including AI ASICs and Ethernet switch chips) was $16.7 billion, up 221% year-on-year and 54% quarter-on-quarter, surpassing the market estimate of $15.9 billion. Adjusted EPS was $3.32, up 96% year-on-year and ahead of the $3.23 expected. The company’s guidance for fourth-quarter total revenue is $34.8 billion, slightly below the market expectation of $35.1 billion, which is the most direct factor pressuring Broadcom stock post-earnings. However, on the earnings call, the company raised its fiscal 2026 AI revenue guidance from $56 billion to $58 billion; for 2027, secured supply will double AI revenue to about $115 billion; and it expects fiscal 2028 AI semiconductor revenue to double again to $230 billion. The company also expects 2028 EPS of over $30, significantly above the consensus estimate of around $26.5, which had been constantly updated higher. As of press time, Broadcom was down over 3% in U.S. pre-market trading on Thursday.

Hewlett Packard Enterprise (HPE.US) Q3 results beat expectations; AI server and networking demand surges but supply chain constraints persist. According to the earnings report, HPE achieved revenue of $12.21 billion in the third fiscal quarter, up 33.7% year-on-year and above analysts' previous forecast of $11.9 billion. Adjusted earnings per share were $1.11, far exceeding the market forecast of $0.93. The company stated that ongoing investment from cloud service providers and enterprise clients in AI, server upgrades, and data center capacity has fueled strong demand for its high-performance servers and networking equipment. Among business segments, networking performed exceptionally well, with third-quarter revenue rising 75% year-on-year to $2.89 billion. Data center networking revenue grew 112.2% to $382 million; routing sales revenue soared 270%. Given continued strong AI demand, the company sharply raised its performance outlook, expecting FY2026 revenue growth of 34%-37%, up from the previous 29%-33% range. Adjusted EPS is forecast at $3.75-$3.85, above the previous $3.35-$3.45 estimate. The company also raised its FY2027 guidance. However, due to management’s warning of ongoing supply chain constraints, HPE was down over 4% in U.S. pre-market trading on Thursday as of press time.

AI coding assistant drives explosive growth! Snowflake (SNOW.US) issues full-year guidance above expectations. The earnings report shows that in the second fiscal quarter ending in July, Snowflake’s total revenue grew 35% year-on-year to $1.55 billion; product revenue grew 37% to $1.49 billion, beating the market’s $1.42 billion estimate. However, remaining performance obligations (RPO, a measure of future contract value) stood at $9.0 billion, slightly below the market expectation of $9.37 billion. The AI product line is the brightest spot this quarter. The company revealed that its built-in AI programming assistant CoCo gained over 2,000 new enterprise customers this quarter, bringing the total to 9,100. Management emphasized on the call that CoCo adoption is not only reflected in customer count but also in quarter-on-quarter consumption acceleration—proving that AI features have moved from “early testing” to production-scale deployment. The company now forecasts full-year product revenue of approximately $6.07 billion, an upgrade from its May forecast and above market expectations of $5.86 billion. As of press time, Snowflake was up over 24% in U.S. pre-market trading Thursday.

Net income up 66% year-on-year, outlook for next quarter far above expectations but not enough! NetApp (NTAP.US) falls sharply post-earnings as investors stay focused on free cash flow and sustainability of growth. For the fiscal quarter ending July 31, 2026, NetApp reported revenue of $2.03 billion, up 30% year-on-year, beating the market forecast of $1.84 billion. Excluding the approximately four-percentage-point contribution from an extra week in the quarter, year-on-year revenue growth was still a robust 26%, well above market estimates. Adjusted EPS was $2.58, up 66% from a year earlier and well ahead of the $2.12 expected. In the earnings report, NetApp emphasized that AI has transformed from a "future vision" into a "business necessity" and is now a key driver of growth. Management disclosed that the company won about 350 AI and data lake modernization deals in the first fiscal quarter. The company also sharply raised its full-year outlook. However, with investor focus shifting to declining free cash flow, one-off positive factors, and possible significant growth slowdown in the latter half of the year, NetApp dropped over 8% in U.S. pre-market trading Thursday as of press time.

AI security demand is booming! Revenue surges 29% and losses narrow, Netskope (NTSK.US) Q2 beats expectations. According to the earnings report, Netskope’s second-quarter revenue grew 29% year-on-year to $221 million, up from $170.8 million a year earlier and also above the market expectation of $214.2 million. Losses narrowed year-on-year; adjusted EPS was a loss of $0.03, better than the expected loss of $0.07. Annual recurring revenue (ARR) increased 27% to $899 million, and remaining performance obligations (RPO) surged 36% to $1.35 billion. Gross margin expanded to 77% from 75% a year earlier. CEO San stated that performance was driven by “ongoing differentiated organic innovation” and demand for Netskope One in “security, networking, analytics, and AI.” The company raised FY2027 revenue guidance to $888 million–$892 million, with the midpoint above analysts’ estimate of $881 million. As of press time, Netskope was up over 11% in U.S. pre-market trading Thursday.

Key Economic Data and Event Schedule

20:30 Beijing time: U.S. Initial Jobless Claims for the week ended August 29

20:30 Beijing time: Interview with Federal Reserve Governor Waller

22:00 Beijing time: U.S. August ISM Non-Manufacturing PMI

Earnings Calendar

Friday morning: DocuSign (DOCU.US), UiPath (PATH.US), Zscaler (ZS.US)