Dow And S&P 500 Hit Historic High As Tech Giants Led U.S. Stocks Rally

The U.S. stocks closed higher on Friday, with both the Dow Jones Industrial Average (DJI) and the S&P 500 reaching historic highs.

Following a brief dip at the beginning of the new year, the market regained momentum as expectations for a March interest rate cut by the Federal Reserve diminished.

Friday’s performance confirmed that the stock market is officially in a bull market, starting from October 2022, rather than a mere rebound within a bear market.

The S&P 500 has risen by 34% from its recent low point. Optimism regarding interest rate cuts and a soft economic landing in 2024 has fueled the market rebound since October 2023.

Matt Stucky, Chief Portfolio Manager at Northwestern Mutual Wealth Management, stated, “Companies leading the market are perceived by investors as having a strong position in the field of artificial intelligence or possessing a differentiated product portfolio in the technology sector. This trend has persisted until the end of last year and the beginning of 2024.”

U.S. Stocks

Fundamental Analysis:

Technology stocks saw widespread gains, with several prominent tech companies hitting historic highs.

At the close, AMD rose over 7%, Broadcom nearly 6%, NVIDIA over 4%, Meta nearly 2%, and Microsoft over 1%.

In contrast, most Chinese concept stocks experienced declines, as the Nasdaq Golden Dragon Index fell by 0.60%. NIO dropped over 3%, while Bilibili, Tencent Music, iQiyi, XPeng Motors, and Weibo all fell over 2%. Baidu and Vipshop saw slight decreases, while NetEase and Alibaba rose over 2%, and Futu Holdings, JD.com, and Pinduoduo increased over 1%.

Technical Analysis:   

(S&P 500 Index, 1-day chart)

Market Trends:

  • Dow Jones gained 395.19 points, up 1.05%, closing at 37,863.80 points.
  • Nasdaq rose 255.32 points, up 1.70%, closing at 15,310.97 points.
  • S&P 500 Index increased by 58.87 points, up 1.23%, closing at 4,839.81 points.

Hong Kong Stock Market

Fundamental Analysis:

In Hong Kong, the three major indices opened higher but saw fluctuations throughout the day.

Core tech stocks declined, with Meituan falling over 5%, and Baidu and Tencent dropping over 2%.

Real estate stocks led the decline, with China Evergrande Group falling nearly 8%.

Automotive stocks fell collectively, and Zero Motors opened high but sharply declined, currently down over 6%.

Internet medical stocks, led by Ping An Good Doctor, fell over 6%.

Among restaurant stocks, Jiumaojiu fell over 6%. Other sectors experiencing notable declines include consumer electronics, SaaS concepts, logistics, and tourism.

The outlook for the Hong Kong market remains pessimistic, especially given the continuous downtrend since the beginning of the year.

Investor confidence has taken a hit, and if this trend persists, it may further discourage investors from entering the market, potentially impacting future performance negatively.

Technical Analysis:  

(Hang Seng Index, 1-day chart)

Market Trends:

  • Hang Seng Index (HSI) dropped by 1.24%, closing at 15,119.61 points.
  • Hang Seng Tech Index (HSTECH) fell by 1.42%, closing at 3,085.49 points.
  • Hang Seng China Enterprises Index (HSCEI.) declined by 1.21%, closing at 5,065.35 points.

FTSE China A50 Index

Fundamental Analysis:

In the A-share market, the three major indices opened lower, experiencing fluctuations throughout the day.

The large financial sector contributed to market stability, with the Shanghai Composite Index relatively stable.

However, the ChiNext Index and the Shenzhen Component Index both widened their declines to 1% during the session.

New energy sectors, including lithium batteries and photovoltaics, rebounded, narrowing the declines in the ChiNext and Shenzhen Component indices.

Yet, by midday, the three major indices weakened again.

In terms of industry sectors, insurance and banking sectors rose, while the automotive, jewelry, securities, and diversified financial sectors experienced smaller declines.

Sectors such as gaming, tourism and hotels, commercial retail, cultural media, and household light industry faced more significant declines.

Technical Analysis:

(SSE Composite Index, 1-day chart)

Market Trends:

  • Shanghai Composite Index (SHCOMP) fell by 0.86%, closing at 2,807.9 points.
  • Shenzhen Component Index (SZCOMP) dropped by 1.1%, closing at 8,690.07 points.
  • ChiNext Index (CHINEXT) declined by 0.54%, closing at 1,706.24 points.
  • SSE STAR Market 50 Index (SSE50) fell by 1.15%, closing at 756.63 points.

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