Fed Keeps Interest Rates Unchanged, U.S. Stocks Rally

U.S. stocks saw gains on Wednesday, with technology stocks leading the way.

The Federal Reserve maintained its benchmark interest rates at 5.25% to 5.5% and left the door open for future rate hikes.

Federal Reserve Chairman Powell stated that there is currently no consideration of cutting rates and that their focus remains on curbing inflation.

The market continues to keep a close eye on U.S. corporate earnings.

The Federal Open Market Committee (FOMC) statement reiterated that they would assess the extent of further tightening policies.

The statement mentioned that economic activity in the third quarter showed “strong” expansion, marking a significant change in their characterization of the U.S. economic growth from previous meetings.

The statement also noted that job growth has slowed but remains robust, and inflation remains high. The policy-making committee remains committed to bringing the inflation rate back to the 2% target.

U.S. Stocks

Fundamental Analysis:

Large tech stocks had mixed performance, with Tesla rising over 1% and companies like Apple, Microsoft, Netflix, and Amazon showing slight gains.

In contrast, companies like Nvidia, Google, and Meta experienced slight declines.

Bank stocks collectively rose, with Bank of America surging over 2%, while Citigroup and JPMorgan Chase rose over 1%, and Goldman Sachs, Morgan Stanley, and Wells Fargo saw marginal gains.

In Chinese concept stocks, Ideal Car and NIO rose by over 3% and nearly 2%, respectively, while Pinduoduo and NetEase gained over 1%.

Companies like Vipshop, Futu Holdings, and iQiyi had slight gains. Weibo and Bilibili dropped by over 2% and 1%, respectively, while Manbang, Tencent Music, JD.com, Alibaba, and Baidu saw marginal declines.

Technical Analysis:   

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

Market Trends:

  • Dow Jones Industrial Average rose by 221.71 points, or 0.67%, to close at 33,274.58.
  • Nasdaq Composite Index (Nasdaq) gained 210.23 points, or 1.64%, closing at 13,061.47.
  • S&P 500 Index increased by 44.06 points, or 1.05%, to finish at 4,237.86.

Hong Kong Stocks

The three major Hong Kong stock indices opened higher.

Technology and internet-related stocks saw gains, with Alibaba rising over 2%, and Baidu Group and JD Group increasing nearly 2%.

Automotive stocks also showed gains, led by XPeng Motors with a more than 5% increase, and Ideal and Leapmotor with gains over 3%.

Property stocks showed a general increase, with China Evergrande Group rising over 4%.

Gas and insurance sectors also experienced broad gains.

Li Ning rebounded, but another domestic demand stock, Haidilao, dropped significantly by nearly 13%.

Additionally, Yum China’s disappointing third-quarter performance led to a drop of nearly 13% in its stock price.

Technical Analysis:  

(Hang Seng Index, 1-day chart)

Market Trends:

  • Hang Seng Index (HSI) increased by 1.21%, closing at 17,307.88.
  • Hang Seng Tech Index (HSTECH) rose by 2.27%, closing at 3,747.03.
  • Hang Seng China Enterprises Index (HSCEI) increased by 1.37%, closing at 5,939.60.

FTSE China A50 Index

Fundamental Analysis:

The three major A-share indices opened slightly higher but experienced a high initial market surge followed by consolidation.

In terms of industry sectors, gaming, cultural media, whole vehicle and automotive services, and education sectors led in terms of gains.

Menawhile, brewing, power equipment, electronic chemicals, photovoltaic equipment, and wind power equipment industries were among the top decliners.

Concepts like film and television, mobile games, virtual digital figures, and ChatGPT remained active.

Technical Analysis:

(SSE Composite Index, 1-day chart)

Market Trends:

  • Shanghai Composite Index (SHCOMP) increased by 0.11%, closing at 3,026.32.
  • Shenzhen Component Index (SZCOMP) declined by 0.27%, closing at 9,800.57.
  • ChiNext Index (CHINEXT) fell by 0.15%, closing at 1,956.27.
  • SSE STAR Market 50 Index (SSE50) dropped by 0.17%, closing at 868.41.

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