Stocks Extend Their Run as Yields Fade

0:00Welcome to Risk Reversals Market Matrix, your AI-generated podcast curated by Guy Adami and Dan Nathan, breaking down the day's most impactful stock market and business headlines. I'm your host, Brunson, and all of today's market data is provided by FACSET. It's Thursday, September 3rd, and these are your top stories. Stocks surged today as yields backed off from their recent highs, following some dovish-fed commentary. Unlike the past few sessions, where gains were concentrated outside of technology, today's rally included tech shares, particularly software and AI-related names. Oil remained elevated and relatively stable, but the decline in yields was enough for a strong relief rally ahead of tomorrow morning's jobs numbers. The 10-year yield fell to 4.77%. Seeing declines after Federal Reserve Governor Christopher Waller said he'd be inclined to support holding rates steady, barring any surprises in upcoming inflation data. The 10-year yield had recently hit its highest level since November 2023.

1:03Fed funds futures on a September rate hike fell as well. On the AI front, Nvidia has agreed to buy AI Startup Hugging Face in a deal worth roughly $13 billion. As reported by the journal, the deal accelerates Nvidia's push to promote open-weight AI models and services that challenge both proprietary models from big US AI companies and open models developed in China. Crusoe, a data center upstart with contracts to supply AI computing power to the likes of Meta Platforms Inc. and Oracle Corp. Has signed a cloud contract with TradingFirm Jane Street Group valued at around $13 billion, according to people with knowledge of the matter. As reported by Bloomberg, the deal, which will provide Jane Street with clusters of advanced AI chips, known as GPS, and other infrastructure needed for AI training and inference via Crusoe's cloud platform is a five-year agreement the people said, requesting anonymity to discuss private information. With tomorrow's jobs number one of the important data points into the September FOMC

2:04meetings, Liz and Mario look at Autumn and the Fed. A curious thing tends to happen around this time of year. Markets get jumpy. The seasonal explanation is that investors returning from summer vacations start preparing their portfolios for the remainder of the year. If there's rebalancing, it can pull money out of top performing assets. But this year, although we could have almost queued the jitters, there are more substantive drivers. The good news is, weakness is not broad-based, and the pullback we've seen since mid-August is very mild. The bad news is, there are a lot of elements creating an unfriendly environment for stocks and bonds right now, including a seasonality of hawkishness from the Fed, and the drama around recent attempts at yield curve control, and finally a preview of tomorrow's jobs number. The Labor Department will release the August Jobs report on Friday, providing clues about the health of the labor market as hiring and firing remain broadly at a standstill. Economists expect the US to have added 50,000 jobs last month, rebounding from an unexpected decline in jobs in July. The unemployment rate is expected to remain

3:06unchanged at 4.1%. Reporting from Bloomberg details a steep drop in US labor force participation, prompting debate among economists over whether long-term demographic shifts, or temporary factors, are driving workers away from the job market. While accelerated retirements and shifting immigration policies may explain part of the decline, analysts note that seasonal statistical noise and cooling labor demand are also contributing, creating key uncertainties for the Federal Reserve's upcoming policy decisions. That's your risk reversal market matrix. Be sure to follow us to get alerts on new episodes every day. All of the articles mentioned on today's podcast can be found in the show description. For Guy Adammy and Dan Nathan's market analysis on these topics and more, watch Market Call on RiskRversals YouTube channel Monday through Thursday. Special thanks to our data provider FACSET for supporting our coverage. Story Curation by RiskRversal, Scripts by AI, Voice by 11 Labs, I'm Brunson. Thanks for listening.