US stocks closed higher on Wednesday, with all three major indexes rising over 1%. The Nasdaq and S&P 500 both reached new record highs, with the S&P 500 surpassing 5600 points for the first time.
Federal Reserve Chairman Jerome Powell stated that it is not necessary to wait until inflation drops to 2% before starting to cut interest rates. Investors are now looking ahead to key inflation data and major financial earnings reports later this week.
Fed Chairman Jerome Powell testified before Congress for the second consecutive day on Wednesday, reinforcing market expectations for an impending rate cut. Swap trades continue to predict two rate cuts in 2024.
According to the CME FedWatch tool, the market now sees over a 70% chance of a rate cut in September, compared to nearly an even chance a month ago.
Tom Essaye, an analyst at Sevens Report Research, wrote, “I think Powell’s comments underscore my concern that the market is too complacent about long-term risks. Reading between the lines, it’s clear the Fed is watching for signs of slowing economic growth.”
US Stocks
Fundamental Analysis:
Major tech stocks mostly rose, with Nvidia up over 2%, and Apple and Google both climbing over 1%, reaching new record highs. Tesla rose for the eleventh consecutive day, albeit less than 1%. Meta and Amazon saw modest gains.
Precious metals, semiconductors, and consumer electronics led the gains, with Pan American Silver up over 5%, Skyworks Solutions, ON Semiconductor, and Hecla Mining up over 4%, Micron Technology up 4%, and AMD and ASML both up over 3%. ARM, GlobalFoundries, Sony, and Jintian Chemical Holdings also rose over 2%.
Popular Chinese stocks had mixed performances, with the Nasdaq Golden Dragon China Index down 0.04%. XPeng Motors surged over 7%, Li Auto rose over 3%, while Futu Holdings, iQIYI, Baidu, and NIO were all up over 2%.
Alibaba, Weibo, and Pinduoduo saw slight gains. NetEase dropped over 3%, Tencent Music and Bilibili fell over 1%, and Full Truck Alliance, JD.com, and Vipshop experienced minor declines.
Technical Analysis:
(S&P 500 Index, 1-day chart)
Market Trends:
- Dow Jones rose 429.39 points, or 1.09%, to 39,721.36.
- Nasdaq rose 218.16 points, or 1.18%, to 18,647.45.
- S&P 500 rose 56.93 points, or 1.02%, to 5,633.91.
Hong Kong Stock Market
Fundamental Analysis:
Hong Kong stocks closed higher across the board. Tech stocks mostly gained, with Xiaomi and Alibaba up over 2%, JD.com rising nearly 2%, and Tencent, Baidu, and Meituan all up over 1%. Positive policy news boosted automotive stocks, with XPeng Motors soaring over 10%. Apple concept stocks showed individual strength, with Cowell e Holdings surging over 24%. Lithium stocks also climbed, with Ganfeng Lithium up over 9%.
Cowell e Holdings surged over 24% after announcing that its profit attributable to shareholders for the six months ending June 30, 2024, is expected to increase by approximately 400% to 500% compared to the same period in 2023, reaching around RMB 21.692 million.
Technical Analysis:
(Hang Seng Index, 1-day chart)
Market Trends:
- Hang Seng Index rose 1.54%, closing at 17,740.44.
- Hang Seng Tech Index rose 2.04%, closing at 3,673.94.
- Hang Seng China Enterprises Index rose 1.44%, closing at 6,341.35.
FTSE China A50 Index
Fundamental Analysis:
The A-shares market saw all three major indexes open higher and continue to climb, with the ChiNext Index rising nearly 2%, and nearly 4900 individual stocks closing in the green.
Leading sectors included non-ferrous metals, PET copper foil, CRO concepts, and liquor stocks, while Apple concept stocks and semiconductor equipment stocks surged before pulling back.
Technical Analysis:
(SSE Composite Index, 1-day chart)
Market Trends:
- Shanghai Composite Index rose 0.77%, closing at 2,961.99.
- Shenzhen Component Index rose 1.76%, closing at 8,849.91.
- ChiNext Index rose 1.98%, closing at 1,683.81.
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