The Fed's hawkish tone is spreading, with three officials warning about inflation risks on the same day.
Since the Fed implemented its first rate hike in three years recently, multiple officials have called for further policy tightening.
On Friday alone, three Fed officials signaled a hawkish stance, issuing warnings about inflation risks.
Cleveland Fed President Beth Hammack said on Friday that she worries persistently high inflation could lead the American public to gradually accept elevated prices as normal, and the Fed must not allow this to happen.
On the same day, Kansas City Fed President Jeffrey Schmid said inflation remains above the Fed's 2% target and policymakers have not yet fully resolved the inflation problem.
Philadelphia Fed President Anna Paulson also said last Thursday that if the economy evolves as expected, the Fed may need to raise rates further to guide inflation back to the 2% target.
The U.S. 30-year Treasury yield broke through 5.5%, setting a new high since 2004.
According to CME's "FedWatch," the probability of the Fed keeping rates unchanged at 3.75%-4.00% at its October meeting is currently 35.8%, while the probability of a 25 basis point hike is 64.2%.
Market Outlook
The three major U.S. stock indexes closed higher, with Microsoft hitting its highest close since last November.
Overnight, U.S. stocks closed as follows: the Dow Jones Industrial Average rose 478.64 points to 51,828.62, up 0.93%, gaining 0.28% for the week and ending a three-week losing streak; the S&P 500 rose 39.28 points to 7,743.41, up 0.51%, gaining 1.21% for the week; the Nasdaq Composite rose 129.35 points to 27,068.72, up 0.48%, gaining 2.06% for the week.
The S&P 500 and Nasdaq both posted two consecutive weekly gains.
Large technology stocks were mixed: Microsoft rose 3.66% to its highest close since last November, with Azure and AI cloud momentum continuing; Apple rose 1.53% to another record closing high, with its total market capitalization approaching $5 trillion; Google rose 0.46%; Nvidia and Amazon edged higher.
The memory chip sector saw broad gains, catalyzed by news that SK Hynix's Solidigm plans a U.S. IPO, combined with expectations for NAND flash and high-bandwidth memory demand from AI data centers. SK Hynix rose 2.78% and Qualcomm rose 3.97%.
Sentiment in the semiconductor sector was generally strong, with ON Semiconductor up 5.54% and Microchip Technology up 5.36%.
Among popular Chinese concept stocks, the Nasdaq Golden Dragon China Index closed down 0.64%.
The Hang Seng Index ADR rose, closing at 24,593.03 points on a proportional basis, up 82.94 points or 0.34% from the Hong Kong close.
On the New York Mercantile Exchange, the front-month WTI crude oil futures contract fell $2.17 to settle at $92.44 per barrel, down 2.29%.
The front-month COMEX gold futures contract rose $22.50, or 0.52%, to $4,320.5 per ounce.
Key Developments to Watch
Hong Kong Exchanges and Clearing's derivatives clearing houses will begin accepting Chinese government bonds, policy financial bonds, and Ministry of Finance bonds as non-cash collateral starting in November.
Hong Kong Exchanges and Clearing Limited announced last Friday that its wholly-owned subsidiaries and on-exchange derivatives clearing houses, HKFE Clearing Corporation Limited (HKCC) and The SEHK Options Clearing House Limited (SEOCH), will begin accepting Chinese government bonds and policy financial bonds held through Bond Connect "Northbound Trading" (collectively, Bond Connect bonds), as well as offshore-issued bonds issued by the Ministry of Finance of the People's Republic of China (MOF bonds), as eligible non-cash collateral to meet margin requirements from November 2026, subject to regulatory approval.
Tianshen Holdings (01201) plans to acquire 100% equity in Times Huazhi (Hong Kong) New Energy Technology Co., Ltd. for 120 million yuan.\
The target group is mainly engaged in the research and development of new energy technologies, the operation of electric vehicle charging stations, the sale and leasing of related products, and the provision of related services.
The target group operates multiple charging stations already in operation in Shanghai and Fuzhou.
In addition, the target group has established business relationships with multiple charging service platforms and participants in the electric vehicle charging ecosystem in China.
Huabao International (00336) plans to acquire 100% equity in PT. Broad Far Indonesia for 90 million yuan.
The target company will become a wholly-owned subsidiary of the company.
Nocton and World Concept will pay the consideration in cash.
The target company was incorporated in Indonesia on October 27, 2021, mainly engaged in the production and sale of heat-not-burn (HNB) cigarette pod products in Indonesia, and mainly provides OEM/ODM services for HNB cigarette pod products to customers.
Yifei Technology (06871) has entered into a strategic cooperation agreement with Zhongke Aerospace to conduct joint research on frontier technologies and key common technologies in the field of space manufacturing.
Specifically, the two parties plan to conduct joint research on frontier technologies and key common technologies in the field of space manufacturing, jointly apply for national and local science and technology projects, and promote collaborative innovation and the commercialization of scientific and technological achievements.
Robotechnik (03757): the offer price has been determined at HK$436 per H-share.
Assuming the global offering becomes unconditional at or before 8:00 a.m. (Hong Kong time) on Tuesday, September 29, 2026, the H-shares are expected to begin trading on the Main Board of the Stock Exchange at 9:00 a.m. (Hong Kong time) on Tuesday, September 29, 2026.
The H-shares will be traded in board lots of 50 H-shares each.
Litmi (01936) has received a mandatory general offer from INNOVATION FORGE HOLDINGS LIMITED at a discount of approximately 29.08%, with trading resuming on September 28.
The offer price is HK$0.6170 per offer share, representing a discount of approximately 29.08% to the closing price of HK$0.8700 per share reported on the Stock Exchange on the last trading day.
The company has applied to resume trading of its shares on the Stock Exchange from 9:00 a.m. on September 28, 2026.
Stock Spotlight
SMIC (00981): Generative AI will drive future growth.
According to TrendForce data, by revenue, SMIC remained among the world's top three wafer foundries in the second quarter of 2026, with revenue up 20% quarter-on-quarter, higher than the overall quarter-on-quarter growth of 11.5% for the world's top ten wafer foundries, and it was the company with the strongest quarter-on-quarter revenue growth among the global top ten.
Goldman Sachs believes this reflects strong AI demand in China and customers advancing supplier diversification to better secure capacity.
Goldman Sachs expects SMIC's revenue in the third and fourth quarters of 2026 to remain at the high level of the second quarter, and capacity utilization in the second half of 2026 to remain above 95%.
New wafer pricing completed for tape-out in the fourth quarter of 2025 and the first quarter of 2026 is expected to take effect in the third quarter of 2026, thereby supporting gross margins despite rising depreciation.
As capacity for AI-related computing, logic, BCD, and optical module-related chips remains tight, the bank expects the possibility of a decline in average selling prices in the second half of 2026 to be low, and continues to be positive on the support from high utilization, improved pricing, and continued demand for AI-related applications.
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