US stocks closed higher on Wednesday, led by gains in tech stocks, with both the Nasdaq and S&P 500 indices setting new record highs. Strong performances from Nvidia and AMD propelled the Nasdaq’s rise.
The Federal Reserve kept interest rates unchanged and indicated progress in its fight against inflation. Jerome Powell, the Fed Chair, expressed increased confidence in managing inflation, hinting at a possible rate cut as early as September.
The Federal Reserve concluded its two-day monetary policy meeting on Wednesday. The Federal Open Market Committee (FOMC) unanimously voted to maintain the benchmark federal funds rate at the range of 5.25% to 5.5%, reiterating that rates will be lowered once there is greater confidence in cooling inflation.
Microsoft’s stock declined due to disappointing results in its cloud business. Fares Hendi, a portfolio manager at Paris SG Prevoir, remarked, “I am very satisfied with the returns from AI stocks, which proves it is not a bubble. The sell-off is due to valuation concerns rather than earnings. Some investors are worried about a bubble, but that’s not the case. The AI cycle is still ongoing.”
US Stocks
Fundamental Analysis:
Large-cap tech stocks mostly rose, with Nvidia surging over 12%, Tesla up over 4%, Amazon and Meta gaining over 2%, and Apple rising over 1%. Microsoft fell more than 1%.
Chip, semiconductor, and precious metals sectors led the gains, with Broadcom up over 11%, Qualcomm, ASML, and ARM each rising over 8%, Harmony Gold, TSMC, and Micron Technology up over 7%, Century Aluminum up over 6%, and US Gold, ON Semiconductor, and AMD up over 5%.
Popular Chinese stocks mostly rose, with the Nasdaq Golden Dragon China Index gaining 0.78%. Futu Holdings and Li Auto climbed over 5%, iQiyi rose over 3%, Tencent Music was up over 2%, and XPeng Motors, Bilibili, Alibaba, and Vipshop gained over 1%. Weibo, Nio, NetEase, and JD.com posted modest gains.
Technical Analysis:
(S&P 500 Index, 1-day chart)
Market Trends:
- Dow Jones: Up 99.46 points, or 0.24%, to 40,842.79
- Nasdaq: Up 451.98 points, or 2.64%, to 17,599.40
- S&P 500: Up 85.86 points, or 1.58%, to 5,522.30
Hong Kong Stock Market
Fundamental Analysis:
The three major indices in Hong Kong opened lower and continued to decline. Tech stocks showed mixed performance, with JD.com down nearly 5%, Baidu and NetEase falling over 2%, and Tencent and Alibaba rising around 0.5%.
Education stocks led the losses, with New Oriental plunging over 12% after earnings. Property stocks also fell, with Yuexiu Property down 11%. Infrastructure stocks bucked the trend, with China Railway Construction rising nearly 5%. Hongye Futures, which soared 58% the previous day, dropped over 18%.
Education stocks led the declines, with New Oriental plunging over 12% post-earnings.
Late Wednesday, New Oriental reported its financial results for the fourth quarter of fiscal year 2024 (March to May 2024), showing operating profit of $10.527 million, a year-over-year decline of 78.1%.
Net income attributable to shareholders was $26.972 million, a year-over-year decline of 6.9%. This marks the first year-over-year quarterly decline in operating profit and net income in the past eight quarters.
Technical Analysis:
(Hang Seng Index, 1-day chart)
Market Trends:
- Hang Seng Index: Down 0.19%, to 17,311.49
- Hang Seng Tech Index: Down 1.28%, to 3,471.70
- Hang Seng China Enterprises Index: Down 0.37%, to 6,084.36
FTSE China A50 Index
Fundamental Analysis:
The main A-share market saw mixed performance in early trading, with the ChiNext Index leading the declines, while rail transit and smart driving concept stocks surged.
Rail transit and high-speed rail stocks saw significant gains again, with companies like Jiaoda Sinuo, Weiao Co., China Railway Group, and Jinyi Industrial hitting the daily limit.
Commercial aerospace stocks continued to be active, with Chunhui Intelligent Control, Aerospace Changfeng, and Xingwang Yuda hitting the daily limit. Smart ride-hailing concept stocks showed late trading activity, with Tongda Electric, Haima Automobile, and Jiangxi Changyun hitting the daily limit.
Technical Analysis:
(SSE Composite Index, 1-day chart)
Market Trends:
- Shanghai Composite Index: Down 0.22%, to 2,932.14
- Shenzhen Component Index: Up 0.95%, to 8,671.30
- ChiNext Index: Down 1.33%, to 1,665.62
Risk Disclosure
Securities, Futures, CFDs and other financial products involve high risks due to the fluctuation in the value and prices of the underlying financial instruments. Due to the adverse and unpredictable market movements, large losses exceeding your initial investment could incur within a short period of time.
Please make sure you fully understand the risks of trading with the respective financial instrument before engaging in any transactions with us. You should seek independent professional advice if you do not understand the risks explained herein.
Disclaimer
The above strategies reflect only the analysts’ opinions and are for reference only. They should not be used or considered as the basis for any trading decisions or as an invitation to engage in any transaction. Doo Prime does not guarantee the accuracy or completeness of this report and assumes no responsibility for any losses resulting from the use of this report. Do not rely on this report to replace your independent judgment. The market is risky, and investments should be made with caution.
