U.S. Stocks Close Lower, Dow Drops 400 Points, Tesla Falls 5%

U.S. stocks ended lower on Tuesday, with the Dow closing down nearly 400 points, marking its second consecutive day of declines.

Treasury yields continued to rise, with the 10-year Treasury yield briefly surpassing 4.4%.

Traders further reduced their bets on a Federal Reserve rate cut in June and for the rest of the year.

According to the Federal Reserve Watch tool by CME Group, the probability of a Fed rate cut in June has decreased from around 70% a week ago to about 58.8%.

The question now is whether the momentum starting in 2024 can continue if the Fed keeps rates unchanged.

JPMorgan strategists have warned that the increasing disconnect between the U.S. stock market and interest rate expectations is a concerning sign.

The U.S. stock market has risen about 30% from its low in October last year, and it has continued to rise despite repeated delays in expectations for a Fed rate cut.

U.S. Stocks

Fundamental Analysis:

Major tech stocks fell across the board, with Tesla plunging nearly 5% after its first-quarter car production and deliveries of 433,371 and 386,810 vehicles, respectively, fell short of expectations.

Microsoft, Apple, Google, Amazon, and Netflix saw modest declines, while Meta surged over 1%.

In the semiconductor and server sector, ON Semiconductor fell more than 4%, while Advanced Micro Devices (AMD), ASML, ARM, Micron Technology, and Nvidia dropped more than 1%.

Chinese concept stocks had mixed results, with the Nasdaq Golden Dragon China Index rising 0.32%. Bilibili surged over 3%, with iQIYI, Tencent Music, and Li Auto gaining over 1%.

Weibo, Vipshop, JD.com, and Baidu slightly increased, whereas XPeng, Futu Holdings, NIO, NetEase fell more than 2%, and Pinduoduo and Alibaba experienced modest declines.

Technical Analysis: 

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

Market Trends:

  • Nasdaq fell 156.38 points, a 0.95% decrease, to 16,240.45.
  • Dow Jones fell 396.61 points, a 1.00% decrease, to 39,170.24.
  • S&P 500 Index dropped 37.96 points, a 0.72% decrease, to 5,205.81.

Hong Kong Stock Market

Fundamental Analysis:

Today, all three major Hong Kong indexes declined.

Tech stocks saw widespread losses, with Xiaomi dropping more than 3% and Lenovo over 2%. NetEase and Meituan nearly fell 1%.

The automotive sector declined collectively, with NIO dropping more than 5%.

Apple-related stocks also saw significant losses, with BYD Electronic falling more than 3%.

SaaS stocks declined across the board, with Weimob Group dropping more than 8%.

Gold stocks bucked the trend, rising amidst new highs for gold prices, with Zhaojin Mining surging over 5%.

Copper stocks also performed well, with China Minmetals Resources climbing more than 5%.

Additionally, sectors such as catering, internet healthcare, lithium batteries, and entertainment saw declines.

Technical Analysis: 

(Hang Seng Index, 1-day chart)

Market Trends:

  • Hang Seng Index (HSI) fell 0.74%, closing at 16,806.57.
  • Hang Seng Tech Index (HSTECH) dropped 1.22%, closing at 3,499.96.
  • Hang Seng China Enterprises Index (HSCEI.) fell 0.78%, closing at 5,914.14.

FTSE China A50 Index

Fundamental Analysis:

China’s three major stock indexes opened lower, with initial market fluctuations leading to a downturn, as the ChiNext Index briefly fell more than 1%.

Subsequently, the indexes diverged, with the Shanghai Composite weakening further, while the Shenzhen Composite and ChiNext saw slight recoveries.

By mid-morning, the Shanghai Composite also began to recover.

In terms of sectors, precious metals, jewelry, minor metals, mining, and non-ferrous metals were among the top gainers.

Meanwhile, wind power equipment, gaming, cultural media, aerospace, and computer equipment faced significant losses.

Gold concepts, aquaculture, poultry, scarce resources, and base metals were among the active themes.

Technical Analysis:  

(SSE Composite Index, 1-day chart)

Market Trends:

  • Shanghai Composite Index (SHCOMP) fell 0.24%, to 3,067.46.
  • Shenzhen Component Index (SZCOMP) fell 0.26%, to 9,562.9.
  • ChiNext Index (CHINEXT) dropped 0.43%, to 1,852.43.
  • SSE Sci-Tech Innovation 50 Index fell 0.73%, to 763.15.

Risk Disclosure
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