Stocks bounced, the ceiling held, and the bond market’s next shock is arriving in yen.

A relief day that changed nothing on the map, and a currency move that could change everything off it

1. The ceiling held to the pointThe S&P’s high stopped under the 7,700 cluster in cash and futures alike before it settled +0.46%. Every index rose, the Russell most, and the VIX gave back Tuesday’s spike. A bounce inside a lower range, not a repair of one. Section 04 has today’s open-interest map, where the day book’s defense has stepped down onto Cannon’s S3.
2. The yen is the overnight storyUSD/JPY fell from 158.66 to 156.10, a one-month yen high, after BoJ board member Hajime Takata’s hawkish remarks revived bets on a September 18 hike and, per Mohamed El-Erian, “speculation of official FX intervention.” JGBs are at 3% for the first time since 1996, and Mark Newton’s Wednesday note ties their next leg to the US 10-year. Treasuries are steady. Section 07.
3. The Fed’s last words are a hedgeJohn Williams told CNBC “we have to wait and see” whether policy is sufficient and put the yield surge down to growth and AI investment, not inflation. ADP printed +38,000, the weakest since January; the Beige Book has input costs rising “strongly” on tariffs and Gulf energy. Futures still price September 16 near 67%. Waller at 8:30 is the last governor who can move that. Section 09.
4. AI demand confirmed, AI multiple rationedBroadcom beat on every line, guided AI revenue to $21.7 billion this quarter and roughly $230 billion by fiscal 2028 — and is down 2.8% pre-market on a total-revenue guide $200 million light. Snowflake is being bought hard on a raise. The tape pays for upside surprise and charges for in-line; MongoDB, Palo Alto and Credo lost 9–20% Wednesday on beats. Section 08.
5. Sentiment split three waysAAII flipped net-bullish for the first time in five weeks — bulls 39.7%, bears 37.6% — in the week the index made a one-month low; CNN’s gauge sits at 33, Fear; the equity put/call fell to a summer low. Retail says buy, the tape says fear, the options say nobody is hedging single names. Section 02.

Where everything sits after the first up day of September

Sentiment & flow gauges

The flow read is Tuesday’s in reverse: index hedges bought into a falling tape were unwound on one up day — the front VIX future fell nearly a point, vol-of-vol and skew each dropped five, single-stock hedging went to a summer low. That is protection monetized after a half-percent bounce, two sessions before payrolls and nine before the buyback blackout Scott Rubner says accelerates around the 12th. The survey turn is either the contrarian buy it usually delivers or, read against Rubner’s note that dip-buying flows run at half normal, a bullish opinion not yet backed by money. With dealers short gamma below the flip, the difference shows up as range, not direction.

Yesterday’s calls graded

Waller, services, then the weekend’s payrolls

The floor moved down to Cannon’s S3; the ceiling is still the R1 band

Cannon Daily Levels — September 3, 2026 · cannontrading.com

Cannon’s ES daily pivot computes to 7,663.00, ten points under the opening print, with R1 at 7,707.50 and S1 at 7,634.75 bracketing the session. Today’s zero-day /ES book has moved its heaviest put open interest down forty points from Tuesday’s strike to 7,560 — roughly 3,900 contracts, the round number below close behind — and Cannon’s S3 prints at 7,562.00, two points away. Above the market, the day book’s heaviest call strike is 7,750 at about 1,600 contracts, with a secondary cluster at 7,720–7,725 between R1 and R2. The zero-day book prices the session at roughly ±35 points, 7,640 to 7,709 — floor five points above S1, ceiling on R1. Mark Newton of Fundstrat: equities “remain in short-term consolidation within the larger uptrend from late July,” and Wednesday “held the August lows as expected without changing that.”

Two structural notes. The big monthly strikes are two-sided — 7,500 carries roughly 61,000 calls against its puts and 7,600 about 55,000 each way — in-the-money call interest that makes them magnets into expiration, not just floors. And the ceiling has not come down with the floor: the put defense dropped forty points overnight while the call side barely moved. The flip sits inside that upper band, and Wednesday’s close did not reach it.

Cannon Edge — Daily Futures Snapshot, September 3, 2026 · cannontrading.com

Off the Cannon Edge board: the ES and Nasdaq rows keep their short-term down arrows against long-term up trends despite the bounce, while gold and silver carry up arrows on both horizons and are finally trading with them. The 30-year bond is the only row with down arrows on both horizons; crude’s short-term arrow is still down against a long-term up trend — the rally is young. Breadth on the bounce was broad but shallow: equal-weight matched the cap-weighted index and the Russell led, David Keller’s rotation in one session, while the Nasdaq-100 closed at 29,143, still 1.7% under a week ago.

A bond bear, a productivity bull, and a technician measuring the bounce

Cautious at the top, a new bull from wealth management, and the bond bears are economists now

Tokyo took the bond market’s baton overnight

The yen — a one-month high and an intervention watch

The dollar fell 1.6% against the yen overnight, its biggest one-day drop of the summer, after Takata’s remarks revived bets on a hike at the September 18 BoJ meeting — two days after the FOMC. El-Erian this morning: the “steep two-day appreciation” is “stoking speculation of official FX intervention ahead of a widely-anticipated rate hike by the Bank of Japan.” Japan is the largest foreign holder of Treasuries and the funding leg of the carry trade, so the yen is where a Japanese hike reaches US assets first. The rates transmission is Newton’s: JGB yields exceeding their May peaks would push the US 10-year toward 5%. The equity transmission is positioning — Section 10.

The long end — steady in New York, for a day

The US curve closed Wednesday within a basis point of Tuesday at every tenor after the 10-year’s intraday high was sold. Williams’s explanation was growth and AI investment; Slok says war and tariffs; Yardeni says normal; Verrone says exaggerated. None of the four says inflation expectations — the version of the story that would force the Fed’s hand, and the version the market priced when it took the September hike from roughly a third to two-in-three in a week. Bunds are near 3.4%, gilts above 5.25%. The Treasury’s buyback program, in El-Erian’s earlier caution, remains “small relative to net issuance.”

The Gulf — escalation with an escort number

US strikes continued through Wednesday, the President saying the latest went beyond radar sites to degrade Iran’s ability to track Hormuz shipping; a strike that hit a wedding, killing five, is the escalation risk on the other side. The market number: the US Navy escorted 40 commercial vessels carrying 18 million barrels through the strait Tuesday, a wartime high, while shipments overall remain restricted — which is why crude is higher with the escort working. EIA had commercial crude stocks down 4.5 million barrels to 411.7 million, about 6% below the five-year average, refineries at 98%, and gasoline and distillate 7% and 10% below their averages. Tight product stocks in a supply war are why the Beige Book’s districts reported input costs rising “strongly.”

The data — a labor market that has stopped hiring and stopped firing

ADP’s August print was the smallest gain since January against roughly +47,000 expected, with July revised up to +46,000. Factory orders rose 0.9% in July on aircraft. The Beige Book had activity rising “modestly,” employment “very slightly” — five districts flat — and prices up “moderately” in eight of twelve. Four-handle growth, a stalled labor market and input-cost pressure is the combination Williams called ambiguous. China’s services PMI rose to 51.4 from a 22-month low with input-cost inflation accelerating on oil and diesel — the war premium is global.

The AI order book is real; the market is grading the guides, not the quarters

Broadcom reported fiscal Q3 revenue of $29.6 billion, up 86%, adjusted EPS of $3.32 against $3.24, and AI semiconductor revenue of $16.7 billion, up 221% year over year and 54% sequentially. Hock Tan: “Demand for our custom AI accelerators and networking continues to be very strong.” The forward numbers are the story — $58 billion of AI revenue this fiscal year and a roadmap of roughly $115 billion in fiscal 2027 across six custom-chip customers including Google, Anthropic and OpenAI — and the stock is lower pre-market because total Q4 revenue was guided $200 million under consensus. Bernstein lifted its target to $550 and BofA’s Vivek Arya to $530; Stacy Rasgon, on CNBC after the print, framed the slide as a reaction to the guide rather than the quarter.

Snowflake is the other side of the same tape: product revenue up 37% to $1.49 billion, EPS of $0.62 against $0.45, the full-year product guide raised to $6.07 billion from $5.84 billion. Dell is giving back a little of its record day after a $95 billion AI backlog; HPE beat, guided the year well above consensus and is down anyway; Ciena is up 4% on 40% revenue growth. The scoring rule is visible across the week: an upside surprise to the guide is bought, an in-line guide is sold, a decelerating guide is punished — MongoDB raised its year but next quarter implies 21% growth after 30%; Palo Alto gave up a hundred basis points of gross margin to cloud and memory costs, a rare instance of a large software company naming memory as a headwind; Credo doubled revenue and lost a fifth of its value on customer concentration. Ben Reitzes of Melius expects memory demand to go “berserk” on edge AI; Palo Alto’s margin line is the cost side of his call.

Nvidia rose on Dell’s order book and Oracle added 3.1%. The utilities gave back Tuesday’s rebound with the wildfire bill unresolved in Sacramento; Lo Toney of Plexo Capital told Closing Bell the data-center backlash is “a political economy problem, not a PR problem” — the right frame for a group whose multiple now depends on legislatures. Tesla is up 1% pre-market into the Cybercab event this evening. Lululemon and Zscaler report after the close; with single-stock hedging at a summer low, the cushion for a miss is not there.

Williams hedged, Waller closes the book

John Williams on CNBC Wednesday was the most cautious senior voice since Jackson Hole: “I think that we have to wait and see” whether policy is sufficient; recent inflation data “have been encouraging” but “we can’t just look a month or two”; tariff pass-through is fading and the energy rise has not broadened into services; the yield surge reflects “a strong U.S. economy… fueled by big investments in AI and data centers.” Not a hike endorsement, and the first senior Fed comment in a week that reads closer to Hatzius’s hold than to the strip’s two-in-three. Waller at 8:30 is the last governor before Saturday’s blackout; the Beige Book is the hawks’ document, ADP the doves’. PPI on the 10th and CPI on the 11th land inside the blackout, and Chair Warsh’s Jackson Hole line — a discipline, not a decision — means the committee will let those two prints speak for it.