U.S. stocks closed lower on Tuesday, with the Dow plunging over 500 points.
January CPI data in the U.S. highlighted continued high inflationary pressures, raising the risk of a change in the Fed’s rate-cutting plans.
Following the CPI data release, the market lowered expectations for the timing of the Fed’s first rate cut in 2024 and its magnitude for the year, leading to a surge in U.S. bond yields.
According to the U.S. Department of Labor’s report on Tuesday, the U.S. Consumer Price Index (CPI) rose 3.1% year-on-year in January, higher than the market’s average expectation of 2.9%.
The previous figure was revised to show a 3.4% year-on-year increase. Compared to December last year, the January CPI rose 0.3% month-on-month.
Savita Subramanian, stock strategist at Bank of America, said that even if there are no rate cuts in 2024, it may not necessarily be bad news for the stock market, as there is still room for upward movement in the stock market regardless of what the Fed does this year.
U.S. Stocks
Fundamental Analysis:
Most large-cap tech stocks declined, with Amazon, Microsoft, and Tesla falling over 2%, and Google, Apple, and Intel dropping over 1%. Netflix saw a slight decline. Arm fell 19.46% to $119.98, departing from the previous day’s closing high of $148.97 and intraday high of $164.00.
Popular Chinese concept stocks also fell, with the Nasdaq Golden Dragon China Index down 2.70%. iQIYI and NIO fell over 6%, while Bilibili and Weibo dropped over 5%.
Vipshop, XPeng Motors, JD.com, and NetEase fell over 3%, and Baidu, Tencent Music, Alibaba, and Manbang dropped over 2%. Ideal Auto and Pinduoduo saw declines exceeding 1%.
Technical Analysis:
(S&P 500 Index, 1-day chart)
Market Trends:
- Dow Jones fell by 524.63 points, or 1.35%, to close at 38,272.75 points.
- Nasdaq decreased by 286.95 points, or 1.80%, to close at 15,655.60 points.
- S&P 500 Index fell by 68.67 points, or 1.37%, to close at 4,953.17 points.
Hong Kong Stock Market
Fundamental Analysis:
All three major indices in Hong Kong recorded significant declines at the close.
In the market, core tech stocks rose, with XPeng Motors up over 5%, and Dongfang Zhenxuan and Meituan rising over 3%. The CRO sector saw a collective decline, with WuXi AppTec falling nearly 15%.
In the CRO sector, led by WuXi AppTec, WuXi AppTec fell nearly 15%, and WuXi Biologics fell nearly 10%.
In terms of news, WuXi AppTec announced that the company does not have a human genomics business, and its existing businesses do not collect human genomic data.
In addition, WuXi Biologics announced that the company is not a subsidiary of WuXi AppTec, and the related statements in the letter are false.
Technical Analysis:
(Hang Seng Index, 1-day chart)
Market Trends:
- Hang Seng Index (HSI) rose by 0.15% to close at 15,769.95 points.
- Hang Seng Tech Index (HSTECH) increased by 1.29% to close at 3,167.71 points.
- Hang Seng China Enterprises Index (HSCEI.) surge by 0.63% to close at 5,340.32 points.
FTSE China A50 Index
Fundamental Analysis:
On February 13th, 2024, trading in A shares officially closed for the Year of the Rabbit in the Chinese lunar calendar.
A shares will be closed from February 9th to February 18th, with the first trading day of the Year of the Dragon falling on February 19th.
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