US stocks closed higher on Tuesday, with major indices rebounding after Monday’s significant decline. A strong performance in the Japanese stock market helped boost investor sentiment. Market participants continued to focus on earnings reports, economic data, and the Federal Reserve’s monetary policy direction.
Following Monday’s historic sell-off, investors are bracing for more volatility. As demand for safe-haven assets waned, US Treasury yields fell. The 10-year Treasury yield saw its first increase in nearly two weeks, shifting the market’s focus to the upcoming $58 billion bond auction. Traders also adjusted their expectations for deep rate cuts from the Federal Reserve this year, dismissing the possibility of an emergency cut this month.
Citi Index Company Senior Market Strategist Matt Simpson commented, “The stronger-than-expected ISM services report helped stem Wall Street’s bleeding. Therefore, we did not see a risk-on rebound but rather a healthy correction following an unhealthy sell-off driven by investor panic.”
US Stocks
Fundamental Analysis:
Most major tech stocks rose, with Nvidia and Meta gaining over 3%, Microsoft up over 1%, Apple down nearly 1%, and AMD falling more than 3%.
Semiconductor, precious metals, and department store sectors led the gains, with TSMC, Navitas Semiconductor, Dillard’s, and Century Aluminum all up over 5%, Harmony Gold and Coeur Mining up more than 3%, and ARM and Macy’s up over 2%.
Most popular Chinese stocks rose, with the Nasdaq Golden Dragon China Index up 3.03%.
New Oriental surged over 13%, Tencent Music gained over 5%, Futu Holdings, Weibo, and Trip.com rose more than 4%, iQIYI and JD.com increased over 2%, and Alibaba was up over 1%.
Baidu and Li Auto posted small gains. Nio fell more than 3%, while Bilibili, XPeng, and NetEase were down more than 1%, and Vipshop declined slightly.
Technical Analysis:
Market Trends:
- Dow Jones rose 294.39 points, or 0.76%, to 38,997.66.
- Nasdaq increased 166.77 points, or 1.03%, to 16,366.85.
- S&P 500 gained 53.70 points, or 1.04%, to 5,240.03.
Hong Kong Stock Market
Fundamental Analysis:
Hong Kong’s three major indices opened higher and continued to climb. Tech stocks were broadly up, with JD.com, Alibaba, and Tencent rising more than 2%, and Baidu up over 1%.
Education stocks extended their gains, with New Oriental up nearly 5%. Photovoltaic stocks led the gains, with Fuyao Glass up over 7%. Coal stocks were active, with Yancoal Australia up more than 4%.
Other sectors such as oil, wind power, film and entertainment, and catering also saw gains.
Education stocks continued their rally, with New Oriental rising more than 5%. The recent State Council’s opinion on promoting high-quality service consumption proposed opening quality educational resources from universities, research institutions, and social organizations to meet diverse and personalized learning needs. The policy is seen as a positive signal for the education and training industry.
Technical Analysis:
Market Trends:
- Hang Seng Index rose 1.31%, closing at 16,864.92.
- Hang Seng Tech Index gained 1.17%, closing at 3,381.71.
- Hang Seng China Enterprises Index increased 1.34%, closing at 5,931.17.
FTSE China A50 Index
Fundamental Analysis:
China’s A-shares showed mixed performance in early trading, with the Shanghai Composite Index rising 0.31% by midday, driven by a surge in telecommunications equipment and commercial aerospace concepts.
Pharmaceutical stocks weakened collectively, with CRO stocks leading the decline. Hehua and Baihua Pharmaceutical hit the limit down. Tourism and hotel stocks generally fell, with Nanjing Travel down over 7% and Rhine Sports down over 5%.
Intelligent ride-hailing stocks dropped, with Tongda Electric hitting the limit down, Jiangxi Longyun, and Jinjiang Online falling over 9%. Livestock farming, film theaters, and real estate sectors also saw significant declines.
Technical Analysis:
Market Trends:
- Shanghai Composite Index rose 0.31%, closing at 2,876.17.
- Shenzhen Component Index fell 0.04%, closing at 8,460.49.
- ChiNext Index dropped 0.16%, closing at 1,624.76.
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