'The Battle for Wall Street' U.S. latest employment data shows a significant slowdown in growth, coupled with oil prices sharply retreating last Friday (2nd), market concerns over the Federal Reserve raising interest rates again in the short term quickly cooled down, prompting a rebound in U.S. stocks. On that day, all three major indices rose, with the Dow Jones and S&P 500 increasing by 0.5% and 0.7% respectively, while the Nasdaq rose 1.2%; the Philadelphia Semiconductor Index performed even better, surging 2.4%.
*Weaker-than-expected data turns into a positive factor*
On the labor market front, September's non-farm payroll added only 29,000 jobs, far below the market expectation of 90,000; job additions for July and August were also revised downward by a combined 60,000. The unemployment rate rose to 4.2% during the same period, slightly higher than estimated, mainly driven by a 0.2 percentage point increase in the labor force participation rate to 61.8%, higher than the estimated 61.6%, reflecting a rebound in labor supply. Wage growth also slowed significantly, with average hourly earnings rising only 0.1% month-on-month, far below the expected 0.3% increase. Slower job growth, reduced wage pressures, and a slightly higher unemployment rate indicate that the labor market is gradually cooling, providing more room for inflation to retreat.
Meanwhile, the latest revision of core PCE inflation shows that its annualized growth rate over the past three months has clearly retreated. Additionally, the Group of Seven (G7) announced coordinated release of 100 million barrels of strategic oil reserves through the International Energy Agency (IEA) to alleviate the pressure of surging fuel prices, further reducing market concerns about the inflation outlook. Overall, a cooling labor market, falling energy prices, and improved inflation data have prompted the market to reassess the Federal Reserve's policy path.
*Officials' tone leans dovish, rate hike expectations plunge*
Last week, speeches by several Federal Reserve officials were more moderate than market expectations. New York Fed President Williams and Vice Chair Jefferson both negated the need for another rate hike in the short term, causing market expectations for a rate hike in October to cool rapidly. Jefferson pointed out that inflation has remained high for too long and still carries upside risks, but emphasized the need to carefully assess subsequent data before deciding on the policy direction; Bowman suggested there is no need to rush to raise rates again this year. Although Dallas Fed President Logan maintained a more hawkish stance, estimating that another 0.5 percentage point rate hike is still needed, she also acknowledged that recent rises in bond yields have already had a cooling effect on the economy.
According to CME FedWatch, the probability of a rate hike in October has dropped to 22.1% (down from 64% a week earlier), reflecting a significant weakening in market bets on short-term rate hikes.
*Watch this week's Fed meeting minutes*
Looking ahead to this week, market focus will center on the release of the September FOMC meeting minutes on Wednesday (7th). The minutes are expected to reflect a general consensus among committee members that inflation remains high, but may also reveal differences in opinion regarding the pace of future rate hikes. The ISM Services Index is expected to remain strong, trade data will help revise third-quarter GDP forecasts, the University of Michigan consumer sentiment is likely to remain low, and initial jobless claims will continue to be an important indicator for observing the labor market.
Micron Technology (Micron) (US.MU) became the focus of last week's U.S. stock market. The company released its fiscal 2026 fourth-quarter results (ended in August this year). Benefiting from strong demand for high-bandwidth memory (HBM), DRAM, and NAND in AI data centers, quarterly revenue rose to $54.23 billion, more than tripling year-on-year; full-year revenue surpassed $133.1 billion, setting a record for the company, reflecting that the wave of AI infrastructure investment is still accelerating.
Looking ahead to the new quarter, Micron expects first-quarter revenue for fiscal 2027 to reach $61.5 billion, far exceeding market expectations; adjusted earnings per share are also expected to surpass estimates. Management noted that HBM orders have already far exceeded existing capacity, and the AI memory boom is further tightening the supply of traditional memory, driving up overall semiconductor market prices. The company also raised its U.S. investment plan through 2035 to over $250 billion to expand capacity to meet demand.
Despite the strong results, the stock price failed to sustain its upward momentum after the earnings announcement and instead retreated, as some investors worry that its rapid growth may slow in the coming quarters. However, from an industry supply-demand perspective, the memory market remains in a clear upward cycle, with strong demand for AI servers and ongoing tight HBM supply. As the only major U.S.-based HBM producer, Micron holds a clear competitive advantage.
The author believes the industry cycle is not over, and earnings prospects remain favorable; the previously set buy price of $800 may have been too conservative. It is now recommended to consider gradually accumulating positions if the stock price pulls back to around the $1000 level.
Watch the video now: https://media.etnet.com.hk/video/content/news/features/interview/2026/10/05102026_kennywan_a001.mp4
'Kenny Wan, Council Member, Hong Kong Securities Analysts Association'
*The author is not a licensed person of the Securities and Futures Commission and does not hold any financial interest in the issuers of the mentioned stocks.
*Articles published in 'ETNET', whether signed or unsigned, represent the authors' personal opinions and do not represent the position of 'ETNET'. 'ETNET' plays the role of providing a free speech platform.
*Weaker-than-expected data turns into a positive factor*
On the labor market front, September's non-farm payroll added only 29,000 jobs, far below the market expectation of 90,000; job additions for July and August were also revised downward by a combined 60,000. The unemployment rate rose to 4.2% during the same period, slightly higher than estimated, mainly driven by a 0.2 percentage point increase in the labor force participation rate to 61.8%, higher than the estimated 61.6%, reflecting a rebound in labor supply. Wage growth also slowed significantly, with average hourly earnings rising only 0.1% month-on-month, far below the expected 0.3% increase. Slower job growth, reduced wage pressures, and a slightly higher unemployment rate indicate that the labor market is gradually cooling, providing more room for inflation to retreat.
Meanwhile, the latest revision of core PCE inflation shows that its annualized growth rate over the past three months has clearly retreated. Additionally, the Group of Seven (G7) announced coordinated release of 100 million barrels of strategic oil reserves through the International Energy Agency (IEA) to alleviate the pressure of surging fuel prices, further reducing market concerns about the inflation outlook. Overall, a cooling labor market, falling energy prices, and improved inflation data have prompted the market to reassess the Federal Reserve's policy path.
*Officials' tone leans dovish, rate hike expectations plunge*
Last week, speeches by several Federal Reserve officials were more moderate than market expectations. New York Fed President Williams and Vice Chair Jefferson both negated the need for another rate hike in the short term, causing market expectations for a rate hike in October to cool rapidly. Jefferson pointed out that inflation has remained high for too long and still carries upside risks, but emphasized the need to carefully assess subsequent data before deciding on the policy direction; Bowman suggested there is no need to rush to raise rates again this year. Although Dallas Fed President Logan maintained a more hawkish stance, estimating that another 0.5 percentage point rate hike is still needed, she also acknowledged that recent rises in bond yields have already had a cooling effect on the economy.
According to CME FedWatch, the probability of a rate hike in October has dropped to 22.1% (down from 64% a week earlier), reflecting a significant weakening in market bets on short-term rate hikes.
*Watch this week's Fed meeting minutes*
Looking ahead to this week, market focus will center on the release of the September FOMC meeting minutes on Wednesday (7th). The minutes are expected to reflect a general consensus among committee members that inflation remains high, but may also reveal differences in opinion regarding the pace of future rate hikes. The ISM Services Index is expected to remain strong, trade data will help revise third-quarter GDP forecasts, the University of Michigan consumer sentiment is likely to remain low, and initial jobless claims will continue to be an important indicator for observing the labor market.
Micron Technology (Micron) (US.MU) became the focus of last week's U.S. stock market. The company released its fiscal 2026 fourth-quarter results (ended in August this year). Benefiting from strong demand for high-bandwidth memory (HBM), DRAM, and NAND in AI data centers, quarterly revenue rose to $54.23 billion, more than tripling year-on-year; full-year revenue surpassed $133.1 billion, setting a record for the company, reflecting that the wave of AI infrastructure investment is still accelerating.
Looking ahead to the new quarter, Micron expects first-quarter revenue for fiscal 2027 to reach $61.5 billion, far exceeding market expectations; adjusted earnings per share are also expected to surpass estimates. Management noted that HBM orders have already far exceeded existing capacity, and the AI memory boom is further tightening the supply of traditional memory, driving up overall semiconductor market prices. The company also raised its U.S. investment plan through 2035 to over $250 billion to expand capacity to meet demand.
Despite the strong results, the stock price failed to sustain its upward momentum after the earnings announcement and instead retreated, as some investors worry that its rapid growth may slow in the coming quarters. However, from an industry supply-demand perspective, the memory market remains in a clear upward cycle, with strong demand for AI servers and ongoing tight HBM supply. As the only major U.S.-based HBM producer, Micron holds a clear competitive advantage.
The author believes the industry cycle is not over, and earnings prospects remain favorable; the previously set buy price of $800 may have been too conservative. It is now recommended to consider gradually accumulating positions if the stock price pulls back to around the $1000 level.
Watch the video now: https://media.etnet.com.hk/video/content/news/features/interview/2026/10/05102026_kennywan_a001.mp4
'Kenny Wan, Council Member, Hong Kong Securities Analysts Association'
*The author is not a licensed person of the Securities and Futures Commission and does not hold any financial interest in the issuers of the mentioned stocks.
*Articles published in 'ETNET', whether signed or unsigned, represent the authors' personal opinions and do not represent the position of 'ETNET'. 'ETNET' plays the role of providing a free speech platform.
