Market Review

MY: Tracking the positive overnight performance in the US, the local bourse rebounded, buoyed by gains in CIMB and GAMUDA. Sector-wise, Construction (+3.06%) outperformed, led by GAMUDA and IJM, while Telecommunications (-1.10%) lagged the most.

US: Wall Street closed higher on Thursday as falling US Treasury yields and dovish remarks from Fed Governor Christopher Waller boosted investor sentiment, alongside a rally in software stocks. The Dow, S&P 500, and Nasdaq advanced by 1.2%, 1.1%, and 1.4%, respectively.

The Day Ahead

US: Although Wall Street snapped its three-day slide, we expect sentiment to be heavily influenced by non-farm payrolls data later today and the upcoming September FOMC meeting outcome. Stock-wise, we like Dell Technologies (DELL) following its strong Q2 results and earnings beat, led by strong AI server demand, which prompted management to raise its FY27 full-year revenue guidance to USD192bn (from USD167bn). Lastly, we continue to favour Arista Networks (ANET), underpinned by its rapid expansion into "Scale-Across" multi-tenant AI fabrics for premier developers such as OpenAI and Anthropic, alongside accelerating 800G Ethernet deployment across cloud hyperscalers such as Meta and Microsoft.

MY: Tracking Wall Street’s positive overnight performance, we expect the FBM KLCI to remain on a recovery footing. Stock-wise, we favour SAM, with its Equipment segment recording a 30% QoQ jump in 1QFY27, led by stronger semiconductor front-end and HDD demand. In its Aerospace segment, SAM is relocating its manufacturing base from Singapore to Thailand to secure lower production costs and better margins. Hence, as a proxy for Applied Materials, SAM is expected to see robust equipment orders as the broader semiconductor market enters an AI supercycle, while its Aerospace segment benefits from margin expansion as the Thailand relocation progresses.