The following is a brief overview of key market developments.

Good morning. Today is the last trading day before the National Day holiday, and we wish everyone smooth trading and satisfying results. At the same time, we wish everyone a safe and joyful National Day holiday.

Trump Releases Artificial Intelligence Agreement

According to Xinhua News Agency, US President Trump told the media on the 29th that he met with heads of multiple technology companies at the White House to discuss artificial intelligence development and jointly signed a related agreement document. Later that day, Trump posted the document on his social media. US media reported that the document involves "internal and external reviews" of artificial intelligence technology.

US Plans to Release 40 Million Barrels from Strategic Petroleum Reserve Through "Exchange"

According to CCTV News, the Strategic Petroleum Reserve Project Management Office of the US Department of Energy issued a solicitation notice on the 29th, planning to release 40 million barrels of crude oil to the market through an "exchange" method. According to the notice, companies planning to participate in the "exchange" need to submit proposals in the coming days. After announcing the "exchange" contracts, the federal government is expected to deliver reserve crude oil in batches in November and December. Companies may begin returning crude oil as early as April 2027, with the latest return deadline being the end of 2029. According to the US Department of Energy, the release of the Strategic Petroleum Reserve can be carried out through "sales" and "exchange" methods. Under the "exchange" method, refiners borrow crude oil from the Strategic Petroleum Reserve due to emergencies such as hurricanes, pipeline blockages, or channel closures, and then return an equivalent amount later. Data shows that the United States has already conducted three batches of oil reserve "exchanges" from March to June this year, with "exchange" contracts involving a total of 107 million barrels of crude oil. The latest data from the US Energy Information Administration shows that in the week ending September 18, the United States had only 284.6 million barrels of Strategic Petroleum Reserve, a decrease of more than 130 million barrels compared with the level at the end of March this year. The US Strategic Petroleum Reserve once maintained a high level of more than 726 million barrels from December 2009 to early July 2011.

Fed Rate Hike Odds Decline

According to CME's "FedWatch," the probability that the Federal Reserve will keep rates unchanged at 3.75%–4.00% at its October meeting is 49.6%, while the probability of a 25 basis point hike is 50.4%. The probability that the Federal Reserve will keep rates unchanged at 3.75%–4.00% by December is 8.5%, the probability of a cumulative 25 basis point hike is 49.8%, and the probability of a cumulative 50 basis point hike is 41.8%. Previously, the market had once bet on a 73% probability that the Federal Reserve would raise rates again at its October 27–28 policy meeting.

US September Consumer Confidence Index Falls Significantly

According to CCTV News, preliminary survey results released by the Conference Board, a US research organization, on the 29th show that due to pressure from Federal Reserve rate hikes and geopolitical tensions, the US September consumer confidence index fell month-on-month for the third consecutive month, dropping to 81.9, lower than the downwardly revised 88.6 in August, marking the lowest level since April 2014. Data shows that among the components of the index, consumers' assessment index of current business and employment market conditions fell significantly by 7.9 in September to 109.3. The consumer expectations index, which reflects short-term income prospects and the business and employment market environment, fell by 5.9 to 63.6. This consumer confidence survey was conducted based on an online sample, and the preliminary survey period for September was from September 1 to 23.

How to Handle the Last Trading Day Before the Holiday?

Today is the last trading day for A-shares before the National Day holiday. During the National Day holiday, overseas markets will trade normally, and their performance will affect the direction of A-shares after the holiday to a certain extent. Market participants remind that multiple uncertain factors are currently intertwined, including geopolitical conflicts, US Treasuries, inflation, and exchange rates, raising the risk of cross-period trading. The interviewed analysts all said that the Middle East situation is the core variable investors need to focus on during the National Day holiday.

Zhang Qing, an stock index researcher at Zhonghui Futures, said that US-Iran negotiations are still in a seesaw state, and Brent crude oil futures prices are fluctuating around $100 per barrel. If the market still does not see a clear timetable for the "unblocking" of the Strait of Hormuz, or if the US and Iran have another military conflict, oil prices may rise further. "Higher oil prices will ignite market expectations for US inflation, thereby driving up US Treasury yields and the US dollar index."

Liu Jin, chief macro analyst at COFCO Futures, warned that continued increases in US Treasury yields and abnormal movements in large-scale funds such as sovereign, pension, and proprietary funds could easily trigger a liquidity crunch and may cause turmoil in global financial markets. It is reported that at present, the market remains highly focused on the US September nonfarm payrolls data and Federal Reserve officials' remarks.

"If the threat of imported inflation and endogenous inflation in the United States rises, it will increase market expectations for further Federal Reserve rate hikes, leading to an extreme scenario of a 'double kill' in stocks and bonds. Commodity varieties with stronger correlations may be affected by the above and resonate with stocks and bonds," Liu Jin said. Taking the 2023 National Day holiday as an example, during that holiday, US Treasury yields rose, and combined with the Israel-Palestine geopolitical conflict, the four major A-share indices fell simultaneously after the holiday. "We need to be alert to the risk of A-shares opening with a downward gap after the holiday."

Liu Jin told Futures Daily that continued increases in the US Treasury term premium will not only raise refinancing costs for technology companies but also amplify volatility in stock-bond portfolios, prompting passive reductions in equity asset allocations.

In addition to geopolitical conditions and fluctuations in US Treasury yields, the market also faces other potential disturbances. Zhang Qing said that during the National Day holiday, fluctuations in the US dollar index will be directly transmitted to the offshore RMB market, and it is necessary to be alert to post-holiday stock-bond-forex linkages. On the fundamentals side, A-shares will enter a dense disclosure period for third-quarter reports in mid-to-late October. Once performance falls short of expectations, theme stocks previously pushed up by sentiment can easily undergo structural adjustments.

Taking various potential risks into account, Zhang Qing suggests that traders reduce positions to a level they can personally tolerate in terms of volatility. In addition, avoid heavy positions in a single theme or high-valuation small-cap stocks, and appropriately diversify allocations toward weighted and low-volatility assets. Sina's cooperative large platform for futures account opening is safe, fast, and secure.