Market Cautious After Powell’s Remarks; Tesla Falls Over 6%

Market Overview

On Wednesday, US market closed mixed on Tuesday as Fed Chair Jerome Powell reaffirmed that there is no urgency to adjust interest rates, signaling that policymakers will remain patient on rate cuts. Meanwhile, investors remained wary of Trump’s tariff threats, which could further escalate global trade tensions.

Speaking before the Senate Banking Committee, Powell reiterated that the Fed does not need to rush rate adjustments, reinforcing expectations that officials will take a cautious approach to rate cuts.

Powell stated:

“With our policy stance significantly less restrictive than before and the economy remaining strong, we see no need to rush policy adjustments.”

Following three consecutive rate cuts in late 2024, the Fed held rates steady in its January meeting. Powell and other Fed officials have suggested that rates will remain unchanged until there is more progress on inflation, while also waiting for further clarity on Trump’s economic policies.

US Stock Market Highlights

Tech stocks showed mixed performance:
- Tesla plunged over 6%, marking its fifth straight daily loss and lowest close since Nov. 14, 2023. It also recorded its biggest one-day drop since Dec. 18.
- Netflix fell nearly 2%, while Microsoft, Nvidia, Google, and Amazon posted modest declines.
- Intel surged over 6%, its biggest gain since Jan. 21, after its latest Core Ultra 9 275HX processor topped benchmark rankings.
- Apple climbed over 2%, and Meta posted slight gains.
Chinese stocks (ADRs) mostly declined:
- The Nasdaq Golden Dragon China Index fell 1.66%.
- NIO, XPeng: Down nearly 7%.
- Li Auto, Baidu: Dropped nearly 5%.
- Bilibili, Trip.com: Lost nearly 4%.
- JD.com: Down over 3%.
- Alibaba gained 1.3% amid reports that Apple and Alibaba are collaborating on AI features for Chinese iPhone users.
- GDS Holdings surged over 17%, hitting its highest level since June 2022, following reports of a planned IPO for its international business.

Technical Analysis of US Markets

US Market Snapshot

Dow Jones: +123.24 points (+0.28%), closing at 44,593.65.
Nasdaq: -70.41 points (-0.36%), closing at 19,643.86.
S&P 500: +2.06 points (+0.03%), closing at 6,068.50.

Hong Kong Markets Highlights

All three major Hong Kong indices closed higher:

Tech stocks broadly advanced:
- Alibaba surged over 6%, Xiaomi gained over 3%, and Tencent rose more than 2%.
- Meituan bucked the trend, falling over 6%.
Strong performers:
- Cinema stocks led gains, with Maoyan Entertainment soaring over 14%.
- Apple suppliers rallied, with AAC Technologies jumping over 7%.
- Auto stocks were mixed, as BYD surged over 6%, while NIO dropped more than 3%.

Alibaba’s Surge & AI Boost

Analysts believe DeepSeek’s rise has reignited international investor interest in Chinese tech.
Alibaba’s new AI model and Alibaba Cloud’s integration with DeepSeek have fueled recent stock gains.
Reports also suggest that Apple is partnering with Alibaba to introduce AI-powered features for iPhone users in China.
Insiders say this move aims to counter Apple’s declining sales in China by offering more competitive software features.

Technical Analysis of Hong Kong Market

HK Market Snapshot

Hang Seng Index: +1.56%, closing at 21,626.80.
Hang Seng Tech Index: +1.19%, closing at 5,203.49.
China Enterprises Index: +1.51%, closing at 7,961.26.

A50 & China A-Share Market Highlights

A-shares opened lower but rebounded after testing key support levels, closing with a narrow range of gains.

Total Market Turnover: ¥999.9 billion.
Market Breadth:
- 3,200 stocks declined.
- Overall, more stocks fell than gained.

Top Performing Sectors:

Cinema chains, DeepSeek AI, and ERP-related stocks.
Maoyan Entertainment hit a limit-up during trading.
DeepSeek AI stocks extended gains, with Ambow Education and QingCloud Technology surging 20%.
Alibaba-related stocks rose, as Yada Co. hit a 30% limit-up and Emicnet surged 20%.

Underperforming Sectors:

Gold stocks pulled back, with Pengxin Resources and China National Gold leading declines.
Oil & gas stocks weakened, as Zhunyou and Potential Energy led losses.
Food processing stocks fell, with Lotus Health dropping the most.

Technical Analysis of China Market

China Market Snapshot

Shanghai Composite Index: -0.01%, closing at 3,317.83.
Shenzhen Component Index: +0.07%, closing at 10,564.66.
ChiNext Index: +0.09%, closing at 2,154.73.

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