Recently, due to the impact of the Producer Price Index ( PPI ), the market's expectation probability of the Fed cutting interest rates by 25 basis points in September has reached 92.1%, while the possibility of a 50 basis point cut has disappeared. This expectation has been gradually digested by the market and has driven a nice rise in the market.

Analysis suggests that a rate cut in September has almost become a foregone conclusion. In addition to the impact of economic data, political factors have also played an important role. Ongoing political pressure and internal divisions within the Fed have made the entire month of August a focal point for the rate cut game.

However, the current expectation of a 25 basis point rate cut may not be sufficient to sustain a healthy market development. Although the probability is currently low, the expectation of a 50 basis point rate cut may again become the focus of market attention, which could bring new market volatility.

With the easing of international tensions, market sentiment has improved, but investors still need to closely monitor changes in interest rate cut expectations. Ahead of the Fed's meeting on September 22, if there is a capital flight due to risk aversion, the market may experience short-term volatility. In this situation, the market may present some misleading signals, making it difficult for investors to accurately assess the direction of capital flows.

Given the current market environment, it is recommended that investors remain cautious and focus on high-quality assets and leading stocks as their main holdings. During this critical period, closely monitoring market trends and policy signals is essential for timely adjustments to investment strategies.