On Tuesday, US stocks pulled back, with the Dow dropping 380 points, and the S&P 500 ending a four-day winning streak. Markets are closely watching the makeup of Trump’s new cabinet and the upcoming U.S. October CPI data release.
Since last week’s U.S. election, the three major stock indexes have repeatedly set record highs as investors bet on President-elect Trump’s proposed tax cuts and deregulation policies boosting the stock market. Mark Malek, CIO of Siebert, noted that with the uncertainty surrounding the election outcome resolved, attention is now shifting back to lingering core economic headwinds.
Citigroup reported that investors’ exposure to U.S. stocks has risen to its highest level in three years since the election, indicating that the rally may be losing steam. Traders are also considering whether Trump’s economic policies might drive inflation, impacting the Fed’s monetary policy.
Minneapolis Fed President Neel Kashkari stated on Tuesday that if inflation unexpectedly rises before December, the Fed may reassess the need for a rate cut at its December meeting. Richmond Fed President Thomas Barkin expressed confidence in the U.S. economy’s resilience, positioning the Fed to tackle potential risks of rising inflation or employment declines.
On the stock front, e-commerce giant Shopify surged 21% after posting quarterly earnings that exceeded analysts’ expectations. Shopify reported a revenue increase of about 26% to $2.16 billion, above the forecasted $2.12 billion, marking its sixth consecutive quarter with revenue growth exceeding 25% (excluding logistics).
Tesla, which had been on a recent rally, declined over 6%. Notably, Trump announced that Elon Musk and entrepreneur Vivek Ramaswamy would lead a new “Department of Government Efficiency” (DOGE) focused on reducing federal spending under his administration.
US Stocks
Fundamental Analysis:
Most major tech stocks rose, with Nvidia gaining over 2%, while Netflix and Microsoft increased over 1%. Google and Meta were slightly up, while Apple was flat, and Tesla dropped more than 6%. In the chips, semiconductors, and precious metals sectors, AMD fell over 6%, Alcoa lost over 5%, and Micron, Century Aluminum, and Intel dropped over 3%. Amgen fell over 7%, marking its worst single-day performance since April 2021.
The Nasdaq Golden Dragon China Index fell 4.45%, with most popular Chinese stocks declining. XPeng slid over 10%, Nio dropped more than 9%, and JD.com, Bilibili, and Li Auto lost over 7%.
Technical Analysis:
Market Trends:
- Dow Jones: -382.15 points (-0.86%) to 43,910.98
- Nasdaq: -17.36 points (-0.09%) to 19,281.40
- S&P 500: -17.36 points (-0.29%) to 5,983.99
Hong Kong Stock Market
Fundamental Analysis:
Hong Kong’s major indexes continued to decline. Tech stocks broadly fell, with JD.com down over 2% and Tencent, Baidu, Xiaomi, and NetEase down around 1%. Pharmaceutical stocks also pulled back, with Cansino Biologics losing over 10% and WuXi AppTec and Tigermed falling over 5%. Auto dealer stocks strengthened, with Zhongsheng Group rising more than 7%.
Telecom stocks bucked the trend, with China Unicom rising over 3%. The 2024 Global 6G Development Conference recently held in Shanghai showcased China’s latest advancements in 6G innovation, helping consolidate resources for future development.
Technical Analysis:
- Hang Seng Index: -0.63%, closing at 19,721.58
- Hang Seng Tech Index: -1.20%, closing at 4,403.43
- Hang Seng China Enterprises Index: -0.55%, closing at 7,087.66
FTSE China A50 Index
Fundamental Analysis:
The A-share market saw mixed movement in early trading, with total morning turnover at 1.3544 trillion yuan, a decrease of 263 billion from the previous day, and more than 4,000 stocks in the market were down.
Shanghai SOEs, cultural media, mini-drama gaming, and central SOEs led gains, while tourism, hotel, and CRO sectors led declines. Shanghai SOEs surged, with major names like Shanghai Maling, Changjiang Investment, and Shanghai Urban Construction hitting daily limits. Tourism stocks led declines, while major stocks like Orient Assets and AVIC retreated.
Technical Analysis:
Market Trends:
- Shanghai Composite Index: -0.01% to 3,421.80
- Shenzhen Component Index: -0.65% to 11,240.68
- ChiNext Index: -0.61% to 2,376.15
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