Economic data and the conflict in the Middle East scared U.S. stocks, the Dow fell about 1,000 points from its daily high, Nvidia plummeted again, and U.S. bonds soared (2024)
Weak United States data, United Kingdom central bank interest rate cuts, and escalating geopolitical conflicts in the Middle East have surged investor risk aversion, and US AI stocks, chip stocks, and technology stocks have plummeted, while US bonds, gold and yen have risen intraday on safe-haven demand.
The United States labor market continues to cool, with several indicators suggesting a return to pre-pandemic levels. United States initial jobless claims were 249,000 in the week of July 27, higher than expectations of 236,000 and the previous value of 235,000, and the data rebounded to the highest rate cut in a year. United States data added signs of economic slowdown, United States July ISM manufacturing PMI was 46.8, significantly lower than market expectations of 48.8 and the previous June value of 48.5, the largest contraction in eight months, exacerbating market fears of a United States recession, heavy losses in US stocks, utilities and other high-dividend sectors rose first.
After the release of the data, the yield on the 10-year United States Treasury fell below 4% for the first time since February, and major U.S. stock indexes turned lower across the board. Traders see a 100% chance that the economic data will support three Fed rate cuts this year, totaling 75 basis points.
Intel's earnings report crashed by 20% after hours, suspending dividends for the first time in 32 years, Apple's revenue in Greater China fell more than expected in the third fiscal quarter, causing it to fall more than 1% after hours, and Amazon's second-quarter revenue and poor guidance for the next quarter caused it to fall more than 5% after hours.
Geopolitically, according to CCTV News, people familiar with the matter revealed that due to the attack on the death of Ismail · Haniah, the leader of the Palestinian Islamic Resistance Movement (Hamas) Politburo, Hamas has indefinitely frozen the ceasefire and personnel exchange agreement negotiations. Iran's Supreme Leader Ayatollah Ali Khamenei has ordered a direct attack on Israel in retaliation for Haniyeh's assassination in Tehran.
Some analysts said that the increase in the support of United States Vice President Harris in the United States election polls and the probability of betting on the Fed's imminent interest rate cut have risen sharply, causing a double blow to the "Trump deal". In the 11 days since Harris became a candidate, Trump's winning trading strategy has lost momentum, the dollar has stagnated, United States Treasuries have risen and Bitcoin has fallen.
Internationally, the United Kingdom Bank cut interest rates by 25 basis points for the first time since early 2020, and the pound fell sharply against the dollar and United Kingdom government bond yields, but traders increased bets that the United Kingdom will cut rates by another 40 basis points by the end of the year, meaning the market expects two more rate cuts.
U.S. stocks opened high and then leaked intraday, the Nasdaq closed down 2.3%, chip stocks were wiped out, and Nvidia fell 6.7%
On August 1, U.S. stocks ushered in a black start to August, with major stock indexes falling across the board, with small-cap stocks and technology stocks leading the decline, and the semiconductor sector falling 7.1% and the deepest intraday fall of more than 8%.
U.S. stocks opened higher on the Fed's dovish outlook and tumbled intraday amid economic difficulties. When it was close to refreshing the daily low before the close, the Nasdaq, which is dominated by technology stocks, fell more than 3.1% at the end of the day; The S&P 500 fell more than 2% in the broader market; The Dow, which is closely related to the economic cycle, fell by more than 1.8% or 744 points, falling nearly 1,000 points from its daily high; The Russell small-cap index fell as little as 3.7%.
Close:
The S&P 500 closed down 75.62 points, or 1.37%, at 5,446.68. The Dow closed down 494.82 points, or 1.21%, at 40,347.97. The Nasdaq closed down 405.26 points, or 2.30%, at 17,194.15.
Nasdaq 100 fell 2.44%; The Nasdaq Technology Market Cap Weighted Index (NDXTMC), which measures the performance of the Nasdaq 100 technology constituents, closed down 3.11%; The Russell 2000 index closed down 3.03%; The fear index VIX closed up 13.81% at 18.62.
The Philadelphia Semiconductor Index closed down 7.14%, the Dow Jones KBW Regional Banks Index closed down 4.37%, and the Philadelphia Stock Exchange KBW Bank Index closed down 2.99%.
Small-cap stocks plunged 3%, the Nasdaq fell 2.3%, and the Dow and S&P 500 fell more than 1%
Among the 11 sectors in the S&P 500, the S&P Information Technology/Technology sector fell 3.36%, the Energy sector fell 2.56%, the Consumer Discretionary sector fell 2.25%, the Industrial sector fell 1.83%, the Financials sector fell 1.38%, while the Real Estate sector rose 1.58% and the Utilities sector rose 1.85%.
The "Seven Sisters of Technology" fell across the board except Meta. Nvidia fell 6.67% to lead the decline, Tesla fell 6.55%, Amazon fell 1.56%, Google A fell 0.45%, Apple fell 1.68%, Microsoft fell 0.3%, and Meta rose 4.82% the day after the earnings report was released.
Chip stocks have collapsed almost across the board. The Philadelphia Semiconductor Index fell 7.14%; Sector ETF SOXX fell 7.21%; Nvidia's Doux Long ETF fell 13.3%.
Arm Holdings fell 15.72%, Qualcomm fell 9.37%, Broadcom fell 8.5%, AMD fell 8.26% and erased the gains after the earnings report, Kelei fell 8.13%, ON Semiconductor fell 8.12%, Micron Technology fell 7.57%, Applied Materials fell 7.49%, ASML ADR fell 5.66%, Intel fell 5.5%, and TSMC US stocks fell 4.6%.
Chinese concept stocks fell collectively. The Nasdaq Golden Dragon China Index closed down 3.35%. Among ETFs, the China Internet Index ETF (KWEB) closed down 2.15% and the China Technology Index ETF (CQQQ) closed down 1.45%.
Among the popular Chinese concept stocks, Gaotu Education, a "concept stock of education and training", closed down 11.87%, and Good Future fell 9.38%; "Wei Xiaoli" announced its July report card, with Weilai down 8.56%, Xiaopeng down 5.33%, and Li Auto down 1.87%; Douyu fell more than 4.5%, JD.com fell more than 4.3%, EHang fell more than 4.3%, JinkoSolar fell more than 3.7%, Qifu Technology fell more than 3.5%, Ctrip, Shell, Vipshop, Zai Lab fell more than 3.2% at most, Baidu and Zhongtong Express fell about 2.4%, New Oriental fell 1.7%, Alibaba and NetEase fell 1.1%, Yum China fell more than 0.6%, and Bilibili rose more than 0.5%.
On the message side:
"Wei Xiaoli" and other new car-making forces announced the July report card, BYD's July new energy vehicle sales exceeded 340,000 units, a year-on-year increase of 30.6%, Celis July new energy vehicle sales increased by 508.25% year-on-year, Li Auto's July sales exceeded 50,000, and the cumulative delivery volume ranked first, Weilai's July delivery volume exceeded 20,000 for three consecutive months, and Xiaopeng Motors' July sales increased by 1% year-on-year.
Good Future closed down 9.38%, and the company's net income in Q1 of fiscal year 2025 was US$414 million, a year-on-year increase of 50.4%; Net profit was $11.402 million, compared with a net loss of $45.037 million in the same period last year.
Among other stocks that have changed greatly due to financial reports:
Intel thundered, falling more than 20% after hours. The company's Q2 revenue unexpectedly declined, and it will lay off more than 15% of its workforce and suspend dividend payments for the first time in 32 years.
Apple fell more than 1% after hours. Apple's revenue and earnings have exceeded expectations for six consecutive quarters, iPhone revenue fell year-on-year but the total was better than expected, and revenue in Greater China was the only geographic region with a year-on-year decline and fell more than expected. CEO Cook said that there is still confidence in the Chinese market in the long run, the iPhone installation base in Chinese mainland and Greater China has actually reached a new high, Apple smartphones are among the top three in Chinese city sales, and the performance of the Chinese market is accelerating from the first half of the fiscal year. Apple acknowledges year-over-year spending on AI, and is bullish on AI as another reason for people to buy new iPhones.
Amazon fell more than 6% after hours. Although the sales of cloud business AWS maintained strong double-digit growth in the second quarter, Amazon's overall sales guidance for the third quarter was poor, lighting up the red light of sluggish demand for cloud business. At the same time, Amazon's profit guidance for the third quarter was also lower than expected, reflecting the pressure on the profitability of tech giants as they invest heavily in artificial intelligence (AI).
Toyota's U.S. stock fell 7.48% intraday, BMW fell 3.59%, and Volkswagen fell 4.06%. Due to the increasingly fierce competition in the global auto market, especially the key market China has set off a protracted price war, Germany's two major automotive giants - Volkswagen and BMW - profit margins in the second quarter have declined, Volkswagen's delivery in the Chinese market in the second quarter fell by 19% year-on-year, forecasting full-year revenue growth of no more than 5%, BMW's revenue and profit margin in the second quarter both declined, and sales in the Chinese market fell by 4% in the first half of the year. Japan auto giant Toyota saw its Toyota and luxury Lexus brand sales in China fall 17.6% after operating profit growth fell short of expectations in the second quarter.
Moderna fell 21.01%. Moderna's second-quarter revenue beat market expectations and the loss was smaller than expected. The decrease in revenue was mainly due to the decline in the company's new crown vaccine sales. Moderna lowered its full-year sales forecast due to declining sales in Europe and fierce competition in the United States respiratory vaccine market.
Eli Lilly's blockbuster drug Zepbound reportedly improved the long-term health of patients with obesity-related heart failure in a trial, highlighting the cardiovascular benefits of the weight loss drug, spurring Eli Lilly to close up 3.5%. The CEO of Eli Lilly said it expects weight loss drugs to get rid of supply shortages "soon".
Gold and silver mining stocks collapsed almost across the board, with First Majestic closing down 13.43%, Hekla Mining down 7.79%, Cordelon Mining down 7.55%, Pan American Silver down 3.79%, gold mining ETF GDX down 1.74%, Barrick Gold down 1.46%, and silver ETF SLV down 1.36%.
European stock markets closed down collectively due to United States economic data and the United Kingdom central bank's interest rate cut, with the banking sector down 4.5% leading the decline:
The pan-European Stoxx 600 index closed down 1.23%. The Eurozone STOXX 50 index closed down 2.2%, approaching its 200-day moving average (the technical indicator is trading at 4,739.41). Most sectors fell, with banks down 4.48% and retail up 1.27% being the only gainer.
Germany's DAX 30 index closed down 2.30%. France's CAC 40 index closed down 2.14%. Italy's FTSE MIB index closed down 2.68%. United Kingdom's FTSE 100 closed down 1.01%. Netherlands' AEX closed down 1.46%. Spain's IBEX 35 index closed down 1.90%.
The STOXX 600 banking index closed down 4.47%, with Bloomberg data showing that almost all of its 48 constituents closed lower, with France Gleralte GLE down 8.97% and HSBC Holdings down 6.46% for the fifth-largest decline.
Among other stocks that have changed greatly due to financial reports:
France Industrial Bank closed down 8.97% after beating expectations in its second-quarter earnings and downgrading its outlook for France retail business.
Rolls-Royce shares rose more than 11% to a record high in intraday trading, the company resumed dividend payouts, reported strong results in the first half of the year, and raised its profit forecast.
Short-end U.S. Treasury yields fell prominently, with the United Kingdom Bank cutting interest rates, weak United States data, and the Middle East situation driving investors to safe-haven sovereign bonds
At the end of the session, the yield on the two-year Treasury note, which is more sensitive to monetary policy, fell 10.73 basis points to a daily low of 4.1502% and a daily high of 4.2964% at 16:30, United Kingdom a narrow range of less than 4 basis points before the central bank announced the rate cut, dived after the release of the decision statement, and extended the decline after the release of the ISM manufacturing data in United States.
The yield on the 10-year United States Treasury fell below 4% for the first time since February, falling 4.98 basis points to 3.9798% in late trading, trading in the range of 4.0642%-3.9627% intraday, with a wave of diving after the United Kingdom Central Bank announced an interest rate cut at 19:00 Beijing time, and the decline further expanded after the release of the United States ISM manufacturing index at 22:00.
The yield on the 10-year German bond, the eurozone benchmark, fell 6.0 basis points to 2.244%. The yield on two-year German bonds fell 7.9 basis points to 2.453%.
The United Kingdom Bank cut interest rates for the first time in four years, and the yield on the more rate-sensitive two-year Treasury bond fell by 15 basis points at one point, the biggest intraday drop since December, and still fell more than 10 basis points to 3.72% at the end of the session. The yield on the 10-year Treasury note fell 9 basis points to its lowest since February at 3.88%. United Kingdom government bond prices soared as traders bet on two more rate cuts this year.
United States recession and weak oil demand concerns overshadowed the Middle East situation, and U.S. oil rose above $78 and fell more than 2%
WTI crude oil futures for September delivery closed down $1.60, or nearly 2.06%, at $76.31 a barrel. Brent crude oil futures for October delivery closed down $1.20, or nearly 1.49%, at $79.52 a barrel.
U.S. oil and Brent oil both rose about 1.2% in early trading in European stocks, pushing up to $79 and $82 respectively. However, after the release of July ISM manufacturing data in early trading, both fell sharply, and U.S. oil and cloth oil refreshed their daily lows before the close, falling more than 2.1% and 1.7% respectively, to $76 and $79.
U.S. oil fell 2% United States U.S. oil fell 2% after manufacturing contracted for a fourth straight month in July, with jobless claims surging last week, renewing fears that the United States economy could fall into recession, overshadowing supply concerns over tensions in the Middle East, analysts said.
Earlier oil prices rose because after the assassination of the Hamas leader in Tehran, the market feared that Israel and Iran would directly clash, according to CCTV News, people familiar with the matter said that Hamas's indefinite freeze on ceasefire agreement negotiations has brought Middle East oil supply risks.
United States natural gas futures for August delivery closed down 3.34% at $1.9680/MMBtu. However, investors are concerned about supply risks, and European natural gas futures extended their rally, hitting a new closing high for the year. TTF Netherlands natural gas futures, the European benchmark, rose 5.35% to 36.900 euros/MWh. ICE United Kingdom gas futures rose 3.23% to 92.870p/kcal.
The U.S. dollar index rose more than 0.2%, and the yen briefly rose above 149 to hit a four-and-a-half-month high
DXY, a basket of six major currencies, rose 0.23% to 104.339, trading in a range of 103.863-104.447.
The Bloomberg Dollar Index rose 0.34% to 1,257.98, trading in a range of 1,251.80-1,258.83.
Chris Turner, head of global markets at Netherlands international group ING, said that even as the Fed prepares to cut interest rates, geopolitical tensions and economic slowdowns in other parts of the world are supporting the dollar, which is a traditional "safe haven" for investors in times of tension.
Non-US currencies mostly fell, with the euro and the pound both hitting about four-week lows. The euro fell 0.31% against the dollar, the pound fell 1% against the dollar at one point, and the market raised bets on the United Kingdom Bank to cut interest rates to two more rate cuts this year, and the dollar fell 0.55% against the Swiss franc.
The offshore renminbi (CNH) fell 237 points to 7.2513 against the dollar, trading in a range of 7.2101-7.2583 yuan during the session.
Among Asian currencies, USD/JPY fell 0.43% to 149.34, its highest level since mid-March, and traded in a range of 150.89-148.51 yen during the day. The EURJPY fell 0.72% to 161.19, and the GBPJPY fell 1.34% to 190.227.
Israel's assets fell sharply as the geopolitical conflict in the Middle East escalated, with the Israel shekel falling below $1 to 3.8 shekels for the first time since April.
Most of the major cryptocurrencies fell. Bitcoin, the largest leader by market capitalization, fell 0.88% to $65,110.00, and refreshed its daily low at $62,615.00 at 01:46 Beijing time. Ethereum, the second-largest Ethereum, fell 3.14% to $3,188.50, and at 02:42, it also refreshed its daily low of $3,096.50.
Safe-haven demand drove gold prices to a two-week high intraday, before a stronger dollar weighed on gold prices and held above $2,440
COMEX gold futures for December delivery rose 0.39% to $2,482.7 an ounce, closer to an all-time high, while COMEX silver futures for September delivery fell 1.77% to $28.425 an ounce.
Gold prices retreated as U.S. stocks got off to a dark start in August and a stronger dollar sent investors to European and American sovereign bonds. Spot gold fell 0.05% to $2,446.26 an ounce late Thursday in New York, and the United States ISM manufacturing index hit a daily high of $2,462.34 after its release. Spot silver, which has industrial metal attributes, fell 1.67% to $28.5235 an ounce, and U.S. stocks refreshed their daily lows after midday, falling more than 2.7% to $28, and U.S. stocks rose above $29 when they refreshed their daily highs before trading.
Gold prices hit a two-week high earlier in the session as the market focused on United States non-farm payrolls data to be released on Friday, driven by expectations of a September rate cut and safe-haven demand, before the dollar rally weighed on gold prices slightly lower, analysts said.
Industrial base metals in London mostly closed in the red. The economic vane "Dr. Copper" fell more than 1.86% to $9,052 / ton. London aluminum closed up $6 at $2,296 per ton. London zinc rose more than 1.19% to $2,707 / ton. London lead fell more than 1.05% to $2,062 / ton. London nickel fell about 1.94% to $16,282 / ton. Lunxi closed down $162 at $29,894 per ton.
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