U.S. Stocks Hit Record Highs, Korean Stocks Return to Technical Bull Market, Market Focus on Three Key Variables

On August 16, global financial market risk appetite rebounded, with the U.S. S&P 500 and Nasdaq both reaching new highs. The trading focus shifted from defensive strategies to expectations of interest rate cuts and AI profit realizations, with technology and chip stocks leading the gains. The South Korean KOSPI index rose 11.5%, ending a seven-week decline and returning to a technical bull market. The U.S. dollar index remained nearly flat for the week, as improved inflation data led to a downward adjustment in Federal Reserve interest rate hike expectations, and Friday's unexpected negative retail sales accelerated the dollar's decline. Next week, the market will focus on three key variables: First, the breakthrough in shipping through the Strait of Hormuz, with Iran and Oman reaching an agreement. If the U.S. signals a lifting of sanctions and shipping volumes improve, geopolitical premiums on oil prices may decline. Second, the Federal Reserve will release the minutes from its July meeting early Thursday morning, with the market watching for indications of more committee members leaning towards rate hikes and their assessments of energy and tariff impacts. Third, preliminary PMI data for Europe and the U.S. will be released on Friday; if it shows weakness, it will reinforce expectations that the Fed will hold steady in September. Key events next week include: Tuesday at 20:15, U.S. ADP employment numbers for the week ending August 1; Wednesday at 02:00, the Federal Reserve's release of the July monetary policy meeting minutes; 20:30, U.S. initial jobless claims for the week ending August 15 and the Philadelphia Fed manufacturing index; and Friday at 07:30, Japan's core CPI year-on-year for July, and at 21:45, the preliminary S&P Global manufacturing and services PMI for August in the U.S.

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