U.S. Stock Market Declines As Powell Reaffirms Hawkish Stance

U.S. stock market closed lower on Thursday as rising bond yields weighed on the market, while investors kept a close eye on U.S. corporate earnings and economic data.

Federal Reserve Chairman Powell stated that the Fed would be ready to tighten monetary policy decisively when necessary.

The rise in U.S. Treasury yields exerted pressure on stocks, with the 10-year Treasury yield increasing by 12.8 basis points to 4.636%, reaching a high of 4.654% during the trading session.

The primary reason for the increase in U.S. Treasury yields was Fed Chairman Powell’s reiteration of a hawkish stance during his speech on Thursday.

Speaking at an expert panel meeting at the IMF, Powell emphasized that the Federal Reserve would “proceed cautiously” and would not hesitate to raise interest rates when deemed appropriate.

He noted that concerns about strong growth could jeopardize the process of slowing inflation, necessitating a response from monetary policy.

U.S. Stock Market

Fundamental Analysis:

Large technology stocks mostly declined, with Tesla falling over 5%.

President Biden’s support for Tesla workers joining the UAW union contributed to the decline.

Google and Amazon both fell over 1%, while Apple, Netflix, and Microsoft experienced slight declines. Nvidia and Meta saw slight increases.

AMC Theatres dropped by over 13%, reporting a loss of $0.09 per share in the third quarter.

Disney closed nearly 7% higher after surpassing expectations with 150 million subscribers in the fourth quarter and announcing $20 billion in cost reductions.

Chinese concept stocks faced a general decline, with the Nasdaq Golden Dragon Index falling by 2.03%.

Weibo, Nio, and Li Auto declined by over 5%, while XPeng Holdings, JD.com, iQiyi, Bilibili, Alibaba, Vipshop, and Baidu all fell by over 2%. However, NetEase saw a slight increase.

Technical Analysis:   

(S&P 500 Index, 1-day chart) 

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

Market Trends:

  • Dow Jones Industrial Average dropped by 220.33 points, a 0.65% decline, closing at 33,891.94 points.
  • Nasdaq Composite Index fell by 128.97 points, a 0.94% decline, closing at 13,521.45 points.
  • S&P 500 Index declined by 35.43 points, a 0.81% drop, closing at 4,347.35 points.

Hong Kong Stock Market

All three major indices experienced a decline.

Core technology stocks suffered losses, with Kuaishou and Bilibili falling by over 4%. Baidu, Meituan, and JD.com also declined by over 3%.

Semiconductor-related stocks, such as Huahong Semiconductor and SMIC, dropped by nearly 13% and 6%, respectively.

Automobile stocks collectively fell, with Nio leading the decline with over a 7% drop.

On the news front, Huawei unveiled its first car, the Huawei Smart Selection S7, in partnership with Chery on November 9th.

Tesla China’s official website also showed price adjustments for the long-range versions of Model 3 and Model Y, with the former increasing by 1,500 yuan and the latter by 2,500 yuan.

Technical Analysis:  

(Hang Seng Index, 1-day chart) 

(Hang Seng Index, 1-day chart)

Market Trends:

  • Hang Seng Index (HSI) dropped by 1.59%, closing at 17,232.55 points.
  • Hang Seng Tech Index (HSTECH) rose by 2.94%, closing at 3,905.86 points.
  • Hang Seng China Enterprises Index (HSCEI) fell by 1.91%, closing at 5,915.19 points.

FTSE China A50 Index

Fundamental Analysis:

On November 10th, A-shares opened lower and, after an initial dip, experienced a collective decline during the midday session.

In terms of industry sectors, pharmaceutical retail, gas, oil, chemical pharmaceuticals, and biotechnology were among the top gainers.

Meanwhile insurance, automotive, gaming, real estate development, and media saw significant declines.

Themes such as storage chips, AI chips, Chiplet concepts, weight loss drugs, satellite communications, and innovative drugs remained active.

Technical Analysis:

(SSE Composite Index, 1-day chart) 

(SSE Composite Index, 1-day chart)

Market Trends:

  • Shanghai Composite Index (SHCOMP) dropped by 0.45%, closing at 3,039.66 points.
  • Shenzhen Component Index (SZCOMP) fell by 0.46%, closing at 9,985.64 points.
  • ChiNext Index (CHINEXT) declined by 0.41%, closing at 2,010.08 points.
  • SSE STAR Market 50 Index (SSE50) fell by 0.18%, closing at 892.18 points.

Forward-looking Statements   
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