US Stocks Dip as Dow Hits 40K, Chinese Stocks Up

US stocks ended slightly lower on Thursday. The Dow Jones briefly surpassed the 40,000 mark but ultimately closed down.

Investors continue to monitor corporate earnings and the Federal Reserve’s monetary policy outlook. Several Fed officials spoke, with Cleveland Fed President Mester suggesting that high interest rates should be maintained for an extended period.

Cleveland Federal Reserve Bank President Mester emphasized the need for more data to confirm that inflation is moving toward the Fed’s 2% target. She advised policymakers to keep interest rates high for a longer period to achieve this goal.

Senior analyst Ipek Ozkardeskaya of Swissquote Bank commented, “The combination of slowing growth and softening inflation is a gift for the stock market. For investors, nothing is more enticing than the prospect of future rate cuts.”

US Stocks

Fundamental Analysis:

Major tech stocks had mixed results. Intel gained over 2%, AMD rose nearly 2%, while Amazon and Meta fell over 1%, and Nvidia and Microsoft saw slight declines.

Leading gainers included food and beverage, airport and airline services, and other industrial metals and mining sectors.

Walmart surged nearly 7%, its largest single-day gain since March 2020. Rio Tinto and Bunge rose over 2%, and BHP gained over 1%.

Sectors that fell included computer hardware, semiconductors, and real estate development, with AMD dropping over 5%, Entegris down over 2%, and ASML and Dell Technologies down nearly 2%.

Popular Chinese stocks mostly rose, with the Nasdaq Golden Dragon China Index up 2.49%.

iQiyi surged over 12%, Alibaba rose over 7%, NetEase climbed over 5%, and Weibo and Futu Holdings gained over 4%.

XPeng Motors and Vipshop rose over 3%, Full Truck Alliance and Bilibili increased over 2%, and JD.com, Baidu, and Pinduoduo gained over 1%. Tencent Music saw a slight increase, while Li Auto fell over 2% and Nio dropped over 1%.

Technical Analysis: 

(S&P 500 Index, 1-day chart) 

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

Market Trends:

  • Nasdaq fell by 44.07 points, or 0.26%, to 16,698.32.
  • Dow Jones decreased by 38.62 points, or 0.10%, to 39,869.38.
  • S&P 500 was down by 10.54 points, or 0.20%, to 5,297.61.

Hong Kong Stock Market

Fundamental Analysis:

Hong Kong’s major indices opened higher and continued to rise. Tech stocks saw significant gains, with Alibaba up nearly 7%, Baidu up nearly 3%, and Tencent, Xiaomi, and JD.com also advancing.

Photovoltaic stocks plummeted, with Flat Glass Group and Xinyi Solar Holdings dropping over 8% due to the impending end of Southeast Asia’s tariff exemption period.

Apple concept stocks were among the biggest losers, with AAC Technologies down over 7%.

Evergrande-related stocks surged, with Evergrande Property Services up over 31% and China Evergrande New Energy Vehicle Group up 53% before suspension.

Alibaba’s nearly 7% surge was notable. Citron Research, previously known for shorting Chinese stocks, gave a positive outlook on Alibaba’s U.S. performance, predicting its stock could surpass $100.

In Q1, Michael Burry’s hedge fund Scion Asset Management significantly increased its bullish bets on JD.com and Alibaba.

Technical Analysis:  

(Hang Seng Index, 1-day chart) 

(Hang Seng Index, 1-day chart)

Market Trends:

  • Hang Seng Index was up by 0.29%, to 19,433.14.
  • Hang Seng Tech Index increased by 0.67%, to 4,099.42.
  • Hang Seng China Enterprises Index rose by 0.34%, to 6,894.43.

FTSE China A50 Index

Fundamental Analysis:

China’s A-shares saw early gains but then retreated, with the three major indices briefly turning positive.

Sector-wise, low-altitude economy, high-speed copper cable connections, MicroLED concepts, and civil explosives led the gains.

Conversely, home appliances, plant-based meat, short dramas, and precious metals were among the leading decliners.

Technical Analysis:  

(SSE Composite Index, 1-day chart) 

(SSE Composite Index, 1-day chart)

Market Trends:

  • Shanghai Composite Index was down by 0.1%, to 3,119.27.
  • Shenzhen Component Index decreased by 0.27%, to 9,578.64.
  • ChiNext Index fell by 0.19%, to 1,840.69.
  • STAR 50 Index rose by 0.12%, to 747.33.

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