On Tuesday, the three major US stock indices closed mixed, with the Dow and S&P 500 both reaching intraday record highs as investors await the Federal Reserve’s first rate cut in four and a half years.

Official economic data released on Tuesday showed that US retail sales unexpectedly rose in August, signaling that the US economy remained on solid footing for most of the third quarter.

Investors are closely watching the Federal Reserve’s two-day monetary policy meeting, which began on Tuesday. The meeting results will be announced at 2 a.m. Beijing time on Thursday, followed by a press conference from Fed Chair Jerome Powell.

Currently, the FedWatch tool indicates that market expectations for a 50 basis point rate cut from the Federal Reserve this week are far greater than for a “standard” 25 basis point cut.

Nick Timiraos, a Wall Street Journal reporter often referred to as the “Fed Whisperer,” wrote that the scale of the Fed’s first rate cut remains uncertain. The Fed typically prefers to move in 25 basis point increments, but this situation has become more complex.

In an investor report, investment bank Wedbush noted that if the Fed cuts rates this week, a number of tech stocks, particularly in the AI sector, could benefit.

Analyst Daniel Ives pointed out that beyond Nvidia, other tech companies tied to artificial intelligence could also gain from the rate cut, including Microsoft, Oracle, Palantir, Salesforce, Dell Technologies, IBM, Apple, AMD, and ServiceNow.

US Stocks

Fundamental Analysis: 

Most major tech stocks rose, with Intel climbing more than 2%, and Amazon and Netflix both up over 1%. Apple, Microsoft, Tesla, Google, and Meta also posted slight gains, while Nvidia fell by more than 1%.

The airline, energy, and retail sectors led the gains, with Plug Power up more than 6%, Hawaiian Airlines up nearly 4%, American Airlines up more than 3%, and Dillard’s rising over 2%. Accenture dropped 4.8%, marking its worst single-day performance since March.

Chinese stocks listed in the US saw widespread gains, with the Nasdaq Golden Dragon China Index rising 1.83%. Li Auto surged more than 12%, while Futu Holdings and iQiyi climbed over 4%. Bilibili gained more than 3%, and Weibo, Full Truck Alliance, and JD.com rose over 2%. Baidu, Xpeng Motors, Alibaba, and Pinduoduo all increased by more than 1%, while Vipshop, NetEase, NIO, and Tencent Music posted smaller gains.

Technical Analysis: 

Market Trends: 

• Dow Jones: Down 15.90 points, or 0.04%, to 41,606.18
• Nasdaq: Up 35.93 points, or 0.20%, to 17,628.06
• S&P 500: Up 1.49 points, or 0.03%, to 5,634.58

Hong Kong Stock Market

The Hong Kong stock market is closed today due to the Mid-Autumn Festival holiday. Trading will resume on September 19.

FTSE China A50 Index

Fundamental Analysis: 

The three major indices in the A-shares market experienced collective adjustments in the morning session. On the sector side, photoresist, lithography machines, and insurance led the gains, while the Sora concept and e-commerce sectors posted the largest losses.

In terms of individual stock performance, photoresist and lithography machine stocks led the rally, with Tongfei Electronics, Broadex Technologies, Zhangjiang Hi-Tech, KMT Gas, and Haili Group hitting limit-up.

Parts of the state-owned enterprise reform sector were also active, with Baobian Electric showing a sharp turnaround, and several stocks including Dalian Thermal Power, Hangzhou Thermal Power, Aopu Optoelectronics, Datang Telecom, and Changshan Beiming hitting limit-up as well.

The Sora concept saw significant declines, with Super Telecom down nearly 9%, while Annoqi, Insight Group, and Wanshing Technology fell more than 5%.

Technical Analysis: 

Market Trends: 

• Shanghai Composite Index: Down 0.05% to 2,702.85
• Shenzhen Component Index: Down 0.55% to 7,939.87
• ChiNext Index: Down 0.39% to 1,529.25

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