U.S. Stock Indices Drop Over 1%, Gold Prices Fall After Hitting New Highs

The major U.S. stock indices ended lower on Friday, marking the second consecutive week of declines. The Dow Jones fell for the fifth straight trading day.

Investors are evaluating the earnings reports from major commercial banks such as JPMorgan and monitoring the Federal Reserve’s policy outlook as well as geopolitical tensions in the Middle East.

CEOs from both JPMorgan and BlackRock expressed concerns about persistent inflation pressures in the U.S.

JPMorgan reported a 6% year-over-year increase in first-quarter profits, totaling $13.42 billion, with earnings per share at $4.44, surpassing the expected $4.11. The bank’s first-quarter revenue was $42.55 billion, exceeding market forecasts of $41.85 billion.

CEO Larry Fink of BlackRock indicated that U.S. inflation is unlikely to fall back to 2% soon. He expects that the Federal Reserve might cut interest rates up to two times this year, although such measures are unlikely to curb inflation effectively.

U.S. Stock Market

Fundamental Analysis:

Popular tech stocks saw broad declines, with Intel dropping over 5%, and Nvidia, Tesla, and Meta all falling more than 2%. Microsoft and Google each lost over 1%.

The lithium battery, precious metals, semiconductor, and computer hardware sectors led the downturns, with significant losses noted in Chilean mining company SQM (down over 6%), Dell Technologies, and Assurant (each over 5%).

AMD, NXP Semiconductors, and Advanced Micro Devices also fell more than 4%, with Micron Technology and Arm dropping over 3%, and HP over 2%.

The Nasdaq Golden Dragon China Index dropped 4.58%, with a weekly cumulative loss of 3.22%.

Xpeng Motors fell nearly 10%, Nio over 7%, and Weibo, iQiyi, and Bilibili all over 6%. JD.com and NetEase dropped over 5%, with Vipshop, Alibaba, Baidu, Li Auto, Pinduoduo, Tencent Music, Futu Holdings, and Full Truck Alliance all falling more than 4%.

Technical Analysis: 

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

Market Trends:

  • Nasdaq fell 267.10 points, down 1.62%, closing at 16,175.09.
  • Dow Jones fell 475.84 points, down 1.24%, closing at 37,983.24.
  • S&P 500 Index fell 75.65 points, down 1.46%, closing at 5,123.41.

Hong Kong Stock Market

Fundamental Analysis:

Hong Kong’s three major indices all fell. Tech stocks broadly declined, with NetEase falling nearly 3%, Alibaba over 2%, Meituan over 1%, and both Baidu and Tencent nearly 1%.

Gold stocks saw significant pullbacks, with Zijin Mining falling over 8%. Apple-related stocks also declined, with FIH Mobile dropping over 7%.

Meanwhile, China Railway stocks surged over 9%, leading gains, and oil stocks like PetroChina rose over 2%. Infrastructure, military, and semiconductor sectors were notably active.

Following a spike in prices due to increased safe-haven demand after Iran launched 300 drones and missiles into Israeli airspace, gold stocks like Zijin Mining saw prices pull back more than 8%.

Analyst Clive Maund warned of a potential correction in gold prices if Iran does not continue its actions.

Technical Analysis: 

(Hang Seng Index, 1-day chart)

Market Trends:

  • Hang Seng Index (HSI) fell 0.73%, closing at 16,599.34.
  • Hang Seng Tech Index (HSTECH) fell 1.09%, closing at 3,436.50.
  • Hang Seng China Enterprises Index (HSCEI.) fell 0.41%, closing at 5,855.59.

FTSE China A50 Index

Fundamental Analysis:

China’s major A-share indices saw a collective rise, with the ChiNext Index up 2.1%.

Stocks related to China Railway, magnetic levitation, offshore engineering, Kirin batteries, construction machinery, aircraft carrier concepts, and railway concepts led the gains.

Conversely, micro-cap stocks, shell resources, equity transfer stocks, ST stocks, and generator concept stocks saw the most significant declines.

Technical Analysis:  

(SSE Composite Index, 1-day chart)

Market Trends:

  • Shanghai Composite Index (SHCOMP) rose 1.21%, to 3,055.99.
  • Shenzhen Component Index (SZCOMP) rose 1.65%, to 9,380.48.
  • ChiNext Index (CHINEXT) rose 2.1%, to 1,799.82.
  • SSE Sci-Tech Innovation 50 Index rose 1.91%, to 752.55.

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