U.S. Stocks Plunge, Dow Down 400 Points, 10-Year Treasury Yield Tops 4%

**Three major stock indexes decline, Nasdaq falls below 18,000 points;

**Goldman Sachs lowers the probability of a US recession to 15%;

**Amazon drops over 3%, Wells Fargo downgrades the company's rating.

On Monday, US stocks fell across the board as the market reduced bets on Federal Reserve rate cuts, which pushed up the use of US Treasury bonds, while investors worried about the impact of Middle East conflicts on oil prices. By the close, the Dow Jones Industrial Average fell 398.51 points, or 0.94%, to 41,954.24, the Nasdaq Composite fell 1.18% to 17,923.90, and the S&P 500 index fell 0.96% to 5,695.94. The CBOE Volatility Index closed at 22.64, its highest level since August 8.

Market Overview

According to data released by the Federal Reserve on Monday, total consumer credit increased by $8.9 billion in August, significantly lower than the $26.6 billion level in July. Revolving credit, which includes credit cards, decreased by nearly $1.4 billion, while non-revolving credit, which includes auto and tuition loans, increased by $10.3 billion.

Minneapolis Federal Reserve President Kashkari said on Monday that he supports a 50 basis point rate cut because there has been significant progress on inflation, and the labor market shows some signs of weakness, with the balance of risks shifting from inflation to unemployment.

After last Friday's better-than-expected non-farm payrolls report, investors reassessed the economic outlook and the Federal Reserve's interest rate path. Stifel said in a report: "A significantly stronger-than-expected jobs report not only questions the (Federal Reserve's) latest substantial rate cut decision in September but also questions the scale of further rate cuts needed in the future." US Treasury yields rose, with the benchmark 10-year Treasury yield exceeding 4% for the first time in two months. According to the CME Group's FedWatch tool, the probability of a 25 basis point rate cut in November is 86%, and the probability of no rate cut is about 14%.

Investors are closely watching this week's release of the Consumer Price Index (CPI) data on Thursday, as well as the Federal Reserve's meeting minutes and speeches by several regional Federal Reserve officials. The new earnings season for US stocks begins on Friday, with JPMorgan Chase and Wells Fargo planning to release their earnings on October 11.

Regarding the market's weak trend, Wedbush Securities' Managing Director of Equity Trading, Michael James, commented, "This is a combination of factors from the past few days: the jobs report, hurricane damage, rising energy prices, and negative comments on some large-cap technology stocks. Middle East conflicts are also a concern for US investors, who worry about the economic impact of war, including rising oil prices."Goldman Sachs released a report stating that it has raised its target for the S&P 500 index at the end of 2024 from 5,600 points to 6,000 points, and has reduced the likelihood of a U.S. economic recession from 20% to 15%.

In terms of the market, star technology stocks performed poorly, with Amazon falling by 3.1% as Wells Fargo downgraded the company's rating to in line with the market. Apple and Google fell by more than 2%, Microsoft and Meta by nearly 1.5%, while Nvidia rose by 2.2% against the trend.

Advanced Micro Devices (AMD) surged by nearly 16%, with the company stating that it recently deployed over 100,000 graphics processing units (GPUs) in a quarter.

Pfizer's stock price increased by 2.2%, following reports that activist investor Starboard Value has acquired approximately $1 billion worth of shares in the pharmaceutical giant.

Air Products and Chemicals rose by 9.5%, with reports indicating that activist hedge fund Mantle Ridge has established a position in the company.

International oil prices rose significantly, with investors concerned about further escalation in the Middle East. The near-month WTI crude oil contract increased by 3.71%, trading at $77.14 per barrel, while the near-month Brent crude oil contract rose by 3.69%, trading at $80.93 per barrel.

International gold prices fluctuated within a narrow range, with the COMEX gold futures for delivery in October at the New York Commodity Exchange falling by 0.04%, trading at $2,644.80 per ounce.