U.S. Stock Market Preview: Major Index Futures Mixed; Dell Technologies Rises After Earnings; Broadcom to Announce Earnings After Market Close

Pre-market Market Trends

1. On Wednesday, September 2nd, before the U.S. market opened, the three major U.S. stock index futures showed mixed movements. At the time of writing, Dow futures rose 0.19%, S&P 500 index futures rose 0.02%, and Nasdaq futures fell 0.24%.

2. At the time of writing, Germany's DAX index fell 0.44%, the UK's FTSE 100 index fell 0.31%, France's CAC 40 index fell 0.18%, and the Euro Stoxx 50 index fell 0.12%.

3. At the time of writing, WTI crude oil fell 1.21% to $89.13 per barrel. Brent crude oil fell 1.00% to $93.70 per barrel.

Market News

The "September effect" has arrived, but there is virtually no panic in U.S. stocks! This abnormal calm is precisely what should raise the most caution. U.S. stocks are now entering one of the historically most volatile months, yet no typical signs of weakness have appeared in the market. The S&P 500 index remains near historic highs and is well above its 200-day moving average, making the probability of a major decline in September this year lower than the historical average. Oppenheimer's head of technical analysis, Ari Wald, said that although the S&P 500 has not climbed rapidly recently, the market has not experienced a "major breakdown" either. Technically, the risk of a significant top forming in U.S. stocks remains below historical norms. Judging this year's market trend simply by the notion that "September is the worst month of the year" is insufficient. Compared with seasonal patterns, what needs more attention now are volatility, bond yields, and Federal Reserve policy. As the second quarter earnings season for S&P 500 constituents nears completion, the driving forces of the market in September will shift back from corporate earnings to macro environment. Jack Janasiewicz, a multi-asset portfolio manager at Natixis Investment Managers, believes that inflation, Fed policy, and bond yields will be the main variables affecting the market next.

The war rages on, oil prices remain high, and the Federal Reserve faces a tough choice in September—whether to hike or not, it's a dilemma. "Fed whisperer," Wall Street Journal Chief Economics Correspondent Nick Timiraos wrote that the Fed faces an increasingly complex policy environment at its September 15–16 rate meeting. An ongoing war pushing energy prices higher for much longer than initially expected can hardly be considered an ignorable short-term variable. The energy crisis, initially seen as temporary, is persisting, and rising energy prices are retesting the Fed's earlier view of inflation shocks being "transitory." Investors are also finding it harder to maintain confidence in that assessment. Timiraos pointed out that the market is currently betting that even if the Fed doesn’t raise rates in September, it may still hike before December. Whatever the final outcome, rate hike expectations have clearly been elevated. If the Fed hikes in September, the market's next focus will be whether further hikes are coming, which could push long-term Treasury yields higher. If the Fed pauses, another question arises: If Waller believes inflation hasn't truly improved and current credit conditions aren’t restraining the economy enough, then how can leaving rates unchanged be justified?

AI infrastructure "burn rate" may reach $5.5 trillion! JPMorgan: Bond market can absorb debt issuance surge; tech giants are still able to leverage up. As tech giants ramp up debt issuance to build AI data centers, the market has begun to worry whether the U.S. investment-grade bond market can absorb the increasing supply. However, JPMorgan Asset Management global market strategist Stephanie Aliaga believes that the current leverage levels of hyperscale cloud companies remain low. Strong demand for AI computing power also supports future cash flow, so the bond market is fully capable of absorbing new issuance. According to JPMorgan's estimates, these six major hyperscale cloud providers could even add about $1.5 trillion in debt without significantly straining their finances. Currently, bonds from these companies account for about 5% of the U.S. investment-grade bond index, double the proportion two years ago. As investments in AI infrastructure continue to grow, these tech giants' global influence in the bond market is rising rapidly.

Hawkish Fed and energy-driven inflation "corner" gold; gold's annual gain nearly wiped out! Deficit fears still push Wall Street to eye $5,000. A short while ago, spot gold prices surged to a more than three-month high of $4,696.18 per ounce, driven by the U.S. Treasury’s ramped-up long-term debt buybacks, continued weakening of the dollar, fiscal deficits, and a wave of "currency depreciation trades." However, since last Friday’s hawkish comments by Fed Chair Waller at the Jackson Hole central bank summit, gold has weakened, and the recent escalation of the U.S.-Iran conflict has seen gold price action turn even more sluggish. Still, fiscal deficits, the dollar’s eroding purchasing power, and central bank gold buying mean the logical case for long-term currency depreciation remains intact. According to the latest public forecasts, Citi raised its gold price target for the next 0–3 months from $4,500 to $4,800 and kept its 6–12 month target at $5,000. Goldman Sachs expects it to hit $4,900 by the end of 2026, and forecasts that central banks will buy 50 tons per month on average in 2026, far above the 17 tons per month average prior to 2022. Deutsche Bank is relatively cautious, expecting average prices of $4,300 and $4,800 respectively for the third and fourth quarters, and warns if the Fed keeps raising rates, gold could dip to $3,800. Morgan Stanley believes its fourth quarter $4,450 target has already been reached early, and sees a path to $5,000 in 2027.

Individual Stock News

Dell Technologies (DELL.US) "AI Money Printing Machine" accelerates: Q2 net profit more than triples, AI server backlog at $95 billion, full-year revenue guidance surges to $192 billion. According to the financial report, for the second quarter of fiscal year 2027 ending July 31, the company’s revenue rose 58% year-over-year to $46.97 billion, beating analyst consensus of $44.92 billion. Net profit was $4.13 billion, more than triple the $1.16 billion from a year ago. Adjusted earnings per share were $7.04, well above the $4.92 analyst estimate. By the end of Q2, the AI server backlog had reached $95 billion, seen as a key leading indicator for future revenue. The company also gave strong guidance for the third quarter—expecting adjusted EPS of $6.50 and revenue of $49 billion, both higher than analyst expectations of $4.49 and $41.42 billion, respectively. Dell also significantly raised its full-year 2027 guidance to adjusted EPS of $25.50 and revenue of $192 billion, up from previous guidance of EPS $17.90 and revenue between $165 and $169 billion. At the time of writing, Dell Technologies shares were up nearly 8% premarket on Wednesday.

Revenue doubles but stock price drops! Credo (CRDO.US), labeled for "AI optical-copper synergy surge," hits a profitability speed bump. The earnings report showed that for the first quarter of fiscal year 2027 ending August 1, the company’s revenue surged 114.7% year-over-year to $479 million, beating analyst consensus of $472 million. Adjusted EPS grew 130.8% year-over-year to $1.20, also above the $1.17 analyst consensus. Looking forward, Credo expects Q2 revenue of $525–$535 million, with the midpoint ($530 million) exceeding analyst expectations of $516.5 million. However, Credo’s Q1 GAAP gross margin dropped 290 basis points YoY and 370 basis points QoQ to 64.5%. Q2 guidance gives a midpoint of 63.9%. Although the company released strong core performance and forward outlook, relatively soft gross margin data contributed to post-market weakness in the stock. At the time of writing, Credo was down more than 9% premarket on Wednesday.

AI hacking becomes the norm! Palo Alto Networks (PANW.US) emerges as the top winner, with full-year 2027 guidance beating all expectations. Cybersecurity company Palo Alto Networks issued an annual profit outlook that beat Wall Street expectations, mainly benefiting from soaring security demand as enterprises defend against increasingly advanced AI systems. According to the financial report, its Q4 fiscal 2026 revenue reached $3.41 billion, up 34.3% year-over-year, surpassing estimates by $60 million. Adjusted earnings per share were $1.02, above expectations by $0.04. In a statement on Tuesday, the company said it expects adjusted EPS of $4.16–$4.19 for fiscal 2027, higher than Wall Street's $4.11 consensus. Annual recurring revenue (ARR) for next-generation security businesses is forecast at $11.075–$11.175 billion, up 22%–23% and also above market expectations. As of writing, Palo Alto Networks was down more than 2% premarket on Wednesday.

Revenue growth hits multi-year highs, full-year guidance fully raised! MongoDB (MDB.US) plunges after earnings: Atlas growth fails to meet "invisible expectations," triggering profit-taking. Document database company MongoDB reported second quarter fiscal 2027 results for the period ending July 31. The financial report showed MongoDB Q2 revenue grew 30% YoY to $771.8 million, beating analyst expectations of $735 million and marking the fastest quarterly growth since fiscal 2024. Diluted EPS was $1.90 compared to the prior year's $0.87 (per share $1.00), and well above market consensus of $1.62. The company raised full-year revenue guidance from $2.92–2.96 billion to $2.99–3.03 billion, with a midpoint ($3.01 billion) higher than the $2.96 billion consensus. Full-year adjusted EPS guidance was raised from $5.95–6.14 to $6.39–6.58, with a midpoint of $6.485 above the $6.13 consensus. However, as Atlas cloud database segment growth failed to meet some investors’ higher expectations, and with shares having rallied sharply in the prior month, the market’s margin for error was extremely low. As of writing, MongoDB was down nearly 13% premarket on Wednesday.

Net ARR surges more than 40%, total bookings hit a record high! GitLab (GTLB.US) Q2 results strongly beat expectations. Financial results show that DevSecOps platform giant GitLab’s Q2 fiscal 2027 revenue was $286.3 million, up 21.3% year-over-year and beating expectations by $12.94 million. Adjusted EPS was $0.24, $0.06 above consensus. The company said total bookings for its software development, security, and operations platforms reached a record high, and net annual recurring revenue (ARR) grew by more than 40%. Looking ahead, GitLab expects Q3 revenue of $281–283 million (consensus: $281 million) and EPS of $0.19–0.20 (market consensus: $0.18). As of writing, GitLab was up nearly 21% premarket on Wednesday.

Key Economic Data and Events Calendar

Beijing Time 20:15 U.S. August ADP employment change (10,000)

Beijing Time 21:05 Federal Reserve Board Governor Barr speaks on "Economic Outlook and Financial Inclusion"

Beijing Time 22:00 U.S. July factory orders MoM (%)

Earnings Calendar

Thursday morning: Broadcom (AVGO.US), Hewlett Packard Enterprise (HPE.US), Snowflake (SNOW.US), NetApp (NTAP.US)

Thursday pre-market: Ciena (CIEN.US), Hello Group (MOMO.US)