US stocks closed mixed on Tuesday, with the S&P 500 and Nasdaq both setting new record highs. Federal Reserve Chairman Jerome Powell stated that inflation remains above the 2% target, indicating that it’s too early to ease monetary policy significantly. However, he warned that keeping rates high for too long could jeopardize economic growth. The market is anticipating key inflation data and major financial reports later this week.

In his testimony before Congress, Powell expressed concerns about maintaining high interest rates for an extended period, fearing it might harm economic growth. Morgan Stanley’s Chief Equity Strategist, Michael Wilson, advised investors to prepare for a potential market correction due to uncertainties surrounding US politics, corporate earnings, and Fed policy.

US Stocks

Fundamental Analysis: 

Major tech stocks were mixed. Tesla rose over 3%, marking its longest winning streak in a year at ten consecutive days. Nvidia gained over 2%, while Microsoft declined more than 1%. Other notable gainers included Hawaiian Holdings, which rose over 6%, New York Community Bank, which gained over 5%, and ABC Bank, up over 4%. Conversely, Century Aluminum dropped over 6%, Alcoa fell over 3%, and Coeur Mining decreased by nearly 3%.

Popular Chinese stocks mostly rose, with the Nasdaq Golden Dragon China Index up 2.39%. Baidu surged over 8%, Tencent Music climbed over 5%, and Bilibili rose more than 4%. Alibaba and Futu Holdings both gained nearly 3%, while iQIYI, Weibo, Pinduoduo, Full Truck Alliance, and Vipshop increased by over 2%. NetEase and JD.com rose over 1%, while NIO and XPeng Motors saw slight increases. Li Auto experienced a small decline.

Technical Analysis: 

(S&P 500 Index, 1-day chart) 

Market Trends: 

• Dow Jones fell 52.82 points, or 0.13%, to 39,291.97
• Nasdaq rose 25.55 points, or 0.14%, to 18,429.29
• S&P 500 gained 4.13 points, or 0.07%, to 5,576.98

Hong Kong Stock Market

 Fundamental Analysis: 

Hong Kong’s major indices saw gains narrow, with Baidu leading tech stocks with a nearly 11% increase. JD.com rose over 2%, while Meituan and Alibaba each gained over 1%. NetEase and Xiaomi both fell by around 1%. Evergrande Auto surged over 5%, Ganfeng Lithium climbed over 4%, and Nongfu Spring increased by over 4% following a major shareholder’s plan to increase holdings by up to HK$2 billion.

Baidu’s significant rise was attributed to Beijing’s Municipal Bureau of Economy and Information Technology seeking public opinion on draft regulations for autonomous driving vehicles, supporting their use in public transport, taxis, and car rentals.

Technical Analysis: 

(Hang Seng Index, 1-day chart) 

Market Trends: 

• Hang Seng Index rose 0.27%, closing at 17,570.70 points
• Hang Seng Tech Index increased 0.73%, closing at 3,627.23 points
• Hang Seng China Enterprises Index fell 0.26%, closing at 6,291.68 points

FTSE China A50 Index

Fundamental Analysis: 

China’s A-shares market indices fluctuated in early trading. Smart driving stocks saw a significant surge, with companies like Tianmai Technology, StarNet Yuda, Roadrover Technology, Soling, and Dazhong Transportation all rising by 10%. New energy stocks like Lushan New Materials and Shengxin Mining also gained 10%, and PCB stocks such as Shengyi Electronics rose by 10%.

Technical Analysis: 

(SSE Composite Index, 1-day chart) 

Market Trends: 

• Shanghai Composite Index fell 0.33%, closing at 2,949.66 points
• Shenzhen Component Index rose 0.33%, closing at 8,734.71 points
• ChiNext Index increased 0.34%, closing at 1,657.72 points

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