U.S. Stocks Close Lower Amid Surprising Inflation Data

U.S. stocks ended the day lower on Wednesday, with the Dow Jones Industrial Average falling by over 420 points.

The inflation data for March exceeded expectations, indicating persistent inflationary pressures and leading to reduced market speculation on a Federal Reserve interest rate cut.

The minutes from the Federal Reserve’s meeting revealed the central bank’s desire for more confidence in moving towards its 2% inflation target.

According to a report by the U.S. Bureau of Labor Statistics on Wednesday, driven by rises in gasoline and housing prices, the U.S. Consumer Price Index (CPI) for March increased by 0.4% month-on-month, with the year-on-year increase rebounding to 3.5%.

Excluding the more volatile food and energy prices, the core CPI for March rose by 0.4% month-on-month and 3.8% year-on-year, both figures exceeding expectations.

Gregory Faranello, head of U.S. Rates Trading and Strategy at AmeriVet Securities, commented, “The stronger-than-expected CPI confirms that the Federal Open Market Committee (FOMC) will take a more cautious stance on the issue of rate cuts.”

U.S. Stocks

Fundamental Analysis:

Major technology stocks mostly fell, with Tesla dropping over 2%, Apple over 1%, and both Google and Microsoft experiencing declines. However, Meta, Amazon, and Netflix saw slight increases.

Semiconductor and chip sector stocks were among the biggest losers, with GlobalFoundries and NXP Semiconductors dropping over 4%, while Intel, Qualcomm, Texas Instruments, and AMD fell by more than 2%.

Nvidia rose nearly 2%, with TSMC and Advanced Micro Devices experiencing slight gains.

Most Chinese concept stocks listed in the US fell, with the Nasdaq Golden Dragon China Index down by 0.39%.

Bilibili and NIO dropped more than 2%, while Weibo, Baidu, NetEase, and Pinduoduo fell more than 1%.

Shares of Futu Holdings, iQIYI, Li Auto, VIPShop, and JD.com saw minor declines.

Alibaba rose more than 2%, with Full Truck Alliance and XPeng Motors also experiencing slight increases.

Technical Analysis: 

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

Market Trends:

  • Nasdaq fell by 136.28 points or 0.84%, closing at 16,170.36.
  • Dow Jones fell by 422.16 points or 1.09%, closing at 38,461.51.
  • S&P 500 Index dropped by 49.27 points or 0.95%, closing at 5,160.64.

Hong Kong Stock Market

Fundamental Analysis:

In today’s trading, all three major indices of the Hong Kong stock market recorded losses.

Technology stocks generally fell, with notable declines seen in NetEase (nearly 4%), Baidu (over 2%), and JD.com (over 1%).

Pharmaceutical outsourcing stocks were among the hardest hit, with Tigermed dropping more than 4%.

Real estate stocks across the board declined, with Agile Group Holdings falling more than 6%.

In contrast, building materials and cement stocks performed well, with Dongwu Cement surging nearly 8%.

Real estate stocks experienced widespread losses, with Agile Group Holdings notably falling more than 6%.

On the news front, sales revenue for the top 100 real estate companies in March reached 392.1 billion yuan, a 47.4% decrease year-on-year.

For the first quarter, cumulative sales amounted to 897.8 billion yuan, down 49.1% year-on-year, indicating continued pressure on sales.

Dongwu Securities recently pointed out that the transaction area for new and second-hand homes in the first week of April decreased month-on-month, influenced by the Qingming holiday, and maintained a significant year-on-year decline due to a high base effect.

Technical Analysis: 

(Hang Seng Index, 1-day chart)

Market Trends:

  • Hang Seng Index (HSI) fell by 0.76%, closing at 17,009.49 points.
  • Hang Seng Tech Index (HSTECH) dropped by 1.30%, closing at 3,505.73 points.
  • Hang Seng China Enterprises Index (HSCEI.) declined by 0.70%, closing at 5,974.63 points.

FTSE China A50 Index

Fundamental Analysis:

The three major A-share indices opened lower but showed an upward trend within the first hour of trading, with diverging performances by midday.

In terms of sector performance, AI applications, coal processing, environmental protection, oil and gas extraction, and non-ferrous metals led the gains.

Conversely, sectors related to the low-altitude economy, pork breeding, innovative drugs, and BC batteries saw the largest declines.

Technical Analysis:  

(SSE Composite Index, 1-day chart)

Market Trends:

  • Shanghai Composite Index (SHCOMP) rose by 0.37%, closing at 3,038.58 points.
  • Shenzhen Component Index (SZCOMP) increased by 0.17%, closing at 9,313.87 points.
  • ChiNext Index (CHINEXT) rose 0.29%, to 1,812.36.
  • SSE Sci-Tech Innovation 50 Index rose by 0.61%, closing at 740.22 points.

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