Analysis: U.S. Stock Valuations Face Pressure Across the Board; Fed Rate Hike Delivery Expected to Ease Constraints

Odaily reported that according to a research report from CITIC Securities, having missed this round of rate hike timing, U.S. stock valuations will face pressure in the short term regardless of whether the Fed raises rates in September. However, in the medium to long term, the delivery of rate hikes is expected to ease valuation constraints. Combined with the "Productivity and Employment Working Group's" positive stance on AI, the AI narrative in U.S. stocks is likely to persist over the long run. On July 29, the FOMC held rates steady for the fifth consecutive meeting, with three voting members supporting a 25bps rate hike, exposing public divisions within the Fed. The market reacted with a split pattern of "dovish at the short end, hawkish at the long end," while rising inflation expectations pressured the dollar and provided a window for Japan's Ministry of Finance to intervene in the forex market. The high growth rate of CSP cloud businesses has to some extent alleviated concerns over the sustainability of AI's triple capital expenditure. In the short term, rate-sensitive industries, high-valuation low-growth sectors, and small-cap stocks face downward pressure. The next window for a shift in liquidity expectations will be the late-August Jackson Hole Symposium or the September FOMC meeting.