Hello everyone, welcome back to the U.S. stock analysis channel. I’m lorder. This weekend, the U.S.-Iran conflict escalated, international crude oil rebounded sharply, and rising inflation expectations pushed the 10-year Treasury yield above its July high, reaching its highest level since January 2025. As a result, all four major indices were under pressure today. Only the Nasdaq 100 managed a slight late-session lift to barely close in positive territory; the other three indices all declined. The performance of S&P 500 constituents was also very poor today, with 361 stocks declining and only 137 advancing. Of the S&P’s 11 sectors, only Technology and Energy posted gains, while the remaining nine all fell. The market is about to enter September; today is the last day of August.

Our current stance is short-term cautious and on the sidelines, medium-to-long-term bullish. As the market enters the historically high-volatility period of September and October, combined with conservative positioning and CTA selling pressure, there is a risk of a short-term pullback. However, fundamentals and earnings remain solid. If a clear pullback occurs, it would actually present a buying opportunity.

First, let’s look at the technical and capital flow picture. Over the next month, if the market trades sideways or rises, CTA systems would be moderate buyers, totaling about $20.8 billion. But if the market turns lower, they would sell approximately $67.8 billion. The main sell triggers are at 7,620, 7,356, and 6,884, with the heaviest selling pressure near 7,356. The S&P 500 is currently at 7,686, not far from the first trigger at 7,620. Selling pressure at the first level would be relatively lighter, but if the market gets hammered down and then buying is strong enough to bounce back, the selling pressure would end quickly. So the key area to watch is the 7,620 to 7,356 range.

Looking at momentum factors, the JPMorgan Momentum Index has fallen over 21% from its June historical high, and the classic momentum index has pulled back 34%. This already exceeds the normal 10% to 15% correction range, implying that a significant short-term rebound in momentum stocks is unlikely.

Regarding credit spreads, bond issuance typically surges after Labor Day, which could widen credit spreads. Coupled with widening AI-related CDS spreads, this creates headwinds for the equity market.

Turning to seasonal statistics, since 1928, September has been the worst month for the S&P 500 in terms of average historical returns. In years with midterm elections, volatility tends to rise significantly from September to October. However, the probability of a rally 3 months after the midterm elections is 78%, and the probability of a rally over 6-month, 9-month, and 12-month periods is 100%.

Finally, let’s look at positioning signals. The Goldman Sachs hedge fund report shows total leverage rose to 305.9%, at the 52nd percentile of its 52-week range; net leverage is 76.9%, at the 30th percentile; and the long/short ratio is 1.672, at the 25th percentile. Single stocks saw net selling for a second consecutive week, while net buying in macro products came mainly from short covering. Overall positioning is neutral-to-low, and the market lacks the will to chase the rally.

The key stock in focus today is AMZN. According to a report by The Wall Street Journal, the U.S. Federal Trade Commission (FTC), joined by 22 state attorneys general, has filed a lawsuit against the company, accusing the e-commerce giant of systematically manipulating the prices businesses pay to advertise on its retail platform since 2019, generating tens of billions of dollars over seven years. The FTC alleges that to inflate prices, the company began placing its own bids, a so-called soft floor price, higher than the second-highest bidder, which, under auction rules, would raise the final ad price. Officials stated the company knew merchants were bidding against each other but did not disclose its intervention.

Affected by this news, the stock fell intraday to around $256. But from a long-term perspective, this is long-term noise and does not affect the core thesis. The fundamental logic for AWS and AI remains unchanged. On valuation, the company’s 2026 forward PE range is 212 to 285, with a median of 249; the 2027 range is 241 to 323, with a median of 282. The current price is near the long-term valuation support zone of $244 to $256. Combining technicals and valuation, the downside appears limited. Long-term bullish, one can look for opportunities in the support zone.

Finally, here are the risk points for which you need to fasten your seatbelts. The escalation of the U.S.-Iran conflict has driven a sharp rebound in oil prices, inflation expectations are rising, and the 10-year Treasury yield has hit a new high since January 2025. The FTC, joined by 22 states, is suing AMZN over ad auction manipulation, which could bring fines or settlement costs. Historical volatility rises in September and October, and the market often trends lower ahead of midterm elections. The pullback in momentum stocks has already exceeded the normal range, and short-term rebound momentum is insufficient. Credit spreads could widen due to a surge in bond issuance, pressuring risk assets. Additionally, there is a risk of escalation in the U.S.-Canada trade dispute, requiring attention to geopolitical developments.

The boring month of August is over; it’s time to wake up. Volatility may increase in September and October. For those who enjoy roller coaster rides, opportunities may be coming, but only if you’re buckled in. We’ll see you in the next episode.