Wall Street Briefing (September 1): US stocks pulled back on Monday; safe-haven demand rose but did not reach panic levels, with a partial recovery in AI hardware stocks. Clashes between the US and Iran pushed oil prices higher, strengthening the energy sector, while crypto-related stocks stood out.

Summary: Most US stocks declined on Monday. The S&P 500 fell 0.33%, the Nasdaq dropped 0.12%, the Dow Jones slipped 0.70%, and the Russell 2000 decreased by 0.54%. The Nasdaq closed nearly flat, while the Dow saw a slightly deeper decline; there was no concentrated selling in a single direction within the indices. The VIX rose 3.40% to 14.92, indicating a rebound in safe-haven demand, though not yet reaching panic levels. Direct clashes between the US and Iran resumed for the first time in a month, causing oil prices to surge and reigniting concerns over inflation and interest rate hikes. Energy and oil service stocks strengthened against the trend, while Tesla, NVIDIA, and crypto-related concepts also performed well, with a partial recovery in AI hardware. In major asset classes, the yield on the 10-year US Treasury note rose 0.81% to 4.758%; gold fell 0.13% to $4,448.48; crude oil jumped 3.44% to $86.31; Bitcoin increased 0.22% to $78,593.15; and the US Dollar Index dipped 0.26% to 99.41.

I. Major Events

1. Direct clashes resume between the US and Iran, sending oil prices soaring

After the US struck Iranian mine-laying units and launch facilities on Larak Island, Iran fired missiles at two US military bases in Jordan, marking the first resumption of direct hostilities between the two sides in a month. Trump subsequently stated that the US would respond forcefully, and the Strait of Hormuz remains effectively blockaded. Under normal circumstances, the Strait of Hormuz handles approximately one-fifth of global crude oil and natural gas transportation. The escalation of conflict rapidly heightened supply risks, and the sharp rise in oil prices further exacerbated inflationary pressures, leading the market to raise expectations for interest rate hikes. As a result, energy stocks strengthened against the trend, while interest-rate-sensitive assets generally faced pressure.

2. California revises wildfire legislation, impacting utilities

The California Senate revised SB 492, the wildfire liability bill, but did not include the liability caps and financing protections expected by grid operators. With wildfire compensation liabilities being difficult to predict, the lack of policy protection has renewed focus on the financing risks facing utility companies. Utilities became the weakest-performing segment among the S&P's 11 major sectors. The rise in US Treasury yields was already unfavorable for high-dividend assets, and the risk of wildfire liability has further intensified pressure on the sector.

II. Major Trends

Most of the four major indices retreated on Monday. The Nasdaq dipped slightly, while the Dow Jones suffered the steepest decline, with the S&P 500 and Russell 2000 falling in between. Tech heavyweights showed relative resilience, whereas traditional large-cap and small-cap stocks lagged slightly. There was no concentrated selling in a single direction within the indices.

Over a two-week horizon, DIA fell 0.41%, SPY dropped 0.73%, QQQ declined 1.80%, and IWM slid 3.33%. The Dow remained relatively stable, while small-cap stocks saw the deepest losses. Over a three-month period, DIA rose 4.47%, SPY gained 1.66%, IWM increased 1.45%, and QQQ dropped 2.81%. The mid-term structure remains led by the Dow, with the Nasdaq continuing to lag.

Over the past two weeks, MAGS rose 2.06%, while SPY fell 0.73% and the equal-weight S&P 500 ETF (RSP) declined 0.63%, indicating a short-term performance shift back toward top-tier tech stocks. Value-focused SPYV dipped only 0.03% during the same period, compared to a 1.30% drop for growth-focused SPYG. In an environment of rising interest rates, value stocks remain more stable than growth stocks.

III. Market Sentiment

The VIX rose 3.40% to 14.92, and the CNN Fear & Greed Index dropped from 52 to 50, remaining in neutral territory. With oil prices and U.S. Treasury yields rising simultaneously, investor caution has increased. However, volatility remains low, and there is no sign of concentrated risk-off behavior in the equity market.

The CBOE index option Put/Call ratio stood at 0.87, the equity option Put/Call ratio at 0.69, and the total Put/Call ratio at 0.75. Option trading remains biased toward bullishness, with no significant rise in demand for protection. Major indices saw limited declines, while most crypto-related stocks rose. Neither the spot nor the options market showed strong risk-averse tendencies.

4. Market Scan

1. Index ETFs

The S&P 500 ETF (SPY) fell 0.30%, the Nasdaq 100 ETF (QQQ) rose 0.05%, the Dow Jones ETF (DIA) dropped 0.65%, and the Russell 2000 ETF (IWM) declined 0.62%. QQQ was nearly flat, while DIA and IWM performed relatively weaker. Tech heavyweights outperformed traditional large-cap and small-cap stocks.

2. Sector Performance

Energy (XLE) rose 2.04%, marking the only sector among the eleven GICS sectors to show significant strength. $The Technology Select Sector SPDR® Fund (XLK.US)$ Rose 0.44%, $The Communication Services Select Sector SPDR® Fund (XLC.US)$ Fell 1.36%, $Utilities Select Sector SPDR Fund (XLU.US)$ Down 1.17%, $Industrial Select Sector SPDR Fund (XLI.US)$ Down 1.13%. Rising oil prices supported energy stocks, while interest rate and policy risks weighed on utilities.

From a sector performance perspective, $VanEck Oil Services ETF (OIH.US)$ Up 2.60%, $Roundhill Memory ETF (DRAM.US)$ up 1.91%, $SPDR S&P Oil & Gas Exploration & Production ETF (XOP.US)$ Up 1.63%, $First Trust Exch Traded Fund 2 Nasdaq Cybersecurity Etf (CIBR.US)$ Up 1.62%, with strength concentrated in energy and select tech subsectors. $VanEck Semiconductor ETF (SMH.US)$ Up 0.63%, $Micron Technology (MU.US)$ Up 2.78%; most AI optical communication stocks rose, but momentum has remained weak over the past two weeks, resembling a localized rebound for now.

3. The Magnificent Seven Tech Stocks

MAGS fell 0.49%, showing clear divergence among big tech. Tesla rose 5.50%, continuing to attract capital attention ahead of its Cybercab autonomous taxi event; NVIDIA gained 1.48%. Google dropped 2.18%, Microsoft fell 1.22%, Meta declined 0.98%, Apple slipped 0.90%, and Netflix decreased 0.81%. Tesla and NVIDIA supported the Nasdaq, while the rest of the big tech stocks generally pulled back.

4. Chinese ADRs

$KraneShares CSI China Internet ETF (KWEB.US)$ Down 1.93%, with major constituents generally weakening. $Alibaba (BABA.US)$ Down 4.11%, $Tencent Music (TME.US)$ Down 3.39%, $Bilibili (BILI.US)$ Down 2.66%, $PDD Holdings (PDD.US)$ Down 1.97%, $Baidu (BIDU.US)$ Down 1.90%, $JD.com (JD.US)$ Down 1.74%, $Futu Holdings Ltd (FUTU.US)$ Down 1.70%, $NTES (09999.HK)$ Down 0.80%. The sector lacked a common catalyst, with Alibaba being the biggest drag.

5. Cryptocurrencies

Bitcoin rose 0.22% to $78,593.15, consolidating in a narrow range near $78,000. Most cryptocurrency-related stocks strengthened, $Circle (CRCL.US)$ Up 9.65%, $Coinbase (COIN.US)$ Up 5.31%, $Strategy (MSTR.US)$ Up 4.41%, $MARA Holdings (MARA.US)$ Up 0.93%, $Robinhood (HOOD.US)$ Up 0.53%, $Riot Platforms (RIOT.US)$ Up 0.02%. Related stocks are significantly outperforming Bitcoin, with capital flowing more towards trading platforms and crypto asset holding companies.

$S&P 500 Index (.SPX.US)$ $SPDR S&P 500 ETF (SPY.US)$ $Invesco Exchange Traded Fd Tr S&P 500 Equal Weight Etf (RSP.US)$ $NASDAQ 100 Index (.NDX.US)$ $Invesco QQQ Trust (QQQ.US)$ $Dow Jones Industrial Average (.DJI.US)$ $State Street® SPDR® Dow Jones Industrial Average® ETF Trust (DIA.US)$ $Russell 2000 Index (.RUT.US)$ $iShares Russell 2000 ETF (IWM.US)$ $Roundhill Magnificent Seven ETF (MAGS.US)$ $USD (USDindex.FX)$ $U.S. 10-Year Treasury Notes Yield (US10Y.BD)$ $iShares 20+ Year Treasury Bond ETF (TLT.US)$ $XAU/USD (XAUUSD.CFD)$ $SPDR Gold ETF (GLD.US)$ $CBOE Volatility S&P 500 Index (.VIX.US)$ $CME-Bitcoin RR Futures (SEP6) (BTCmain.US)$ $iShares Ethereum Trust ETF (ETHA.US)$ $NVIDIA (NVDA.US)$ $Tesla (TSLA.US)$ $Meta Platforms (META.US)$ $Amazon (AMZN.US)$ $Alphabet-C (GOOG.US)$ $Microsoft (MSFT.US)$ $Apple (AAPL.US)$

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