1. The PHLX Semiconductor Index fell sharply by 6.81%, with Nvidia, AMD, Taiwan Semiconductor, Qualcomm and ASML taking the lead in weakness; 2. As technology stocks plummet, value blue-chip stocks become a safe haven, and the Dow Jones hits a new historical high again; 3. Chinese concept stocks are also dragged down, with the Nasdaq Golden Dragon China Index down 1.86%.
On July 18th, Caixin reported that the 'bullet' that was fired from Pennsylvania last Saturday flew for four days and finally hit Wall Street. Investors who were still excitedly planning which sectors would benefit from the 'Trump Trade' a few days ago have begun to realize the principle of the same source of profit and loss.
At the close, the S&P 500 index fell 1.39% to 5,588.27 points; the Nasdaq index fell 2.77% to 17,996.92 points, the largest single-day drop since December 2022; the Dow Jones Industrial Average rose 0.59% to 41,198.08 points, continuing to reach new historical highs.
(Nasdaq index daily chart, source: TradingView)
Investors who researched 'Trump's Latest Talk' all day entered a frenzy of selling technology stocks as soon as the market opened on Wednesday. As of the closing on Wednesday, except for Buffett's Berkshire Hathaway which has joined the 'value rotation' concept, the other nine stocks in the top ten market value rankings of US stocks have all fallen sharply. The declines in stocks such as Nvidia, Taiwan Semiconductor, and Meta all started at 5%.
Looking at the other side, the top ten stocks by market value in the US stock market had evaporated more than 600 billion US dollars in market value in total in the last night and this morning. In addition to this, among the almost 500 billion US dollars of market value evaporation in the semiconductor sector, there are even more miserable examples—ASML's US stocks fell by 12.74%, AMD fell by 10.21%, and Qualcomm fell more than 8%.
The reason why the semiconductor sector fell so much on Wednesday is not only due to an interview by Trump, but also related to rumors about Biden's government policies. So strictly speaking, the Philadelphia semiconductor index fell sharply by 6.81% on Wednesday, the largest single-day drop since March 2020, and is related to the two old men who add up their ages to 159 years.
What is worth the attention of Chinese stock investors is that these technology stocks are not only high-market-value weights, but also the 'beloved stocks' of many active equity fund managers. Therefore, Chinese stock investors who hold QDII funds are also highly likely to be affected.
The money that has been holding technology stocks in large numbers has fled in a panic, not only pushing up the continuous rise of blue-chip value stocks, and pushing the Dow Jones to new highs, but also giving birth to some unique speculative ideas.
At the time of the large falls of Taiwan Semiconductor and Nvidia, some funds began to speculate in the concept of 'American replacement'—Gexin rose 6.82% on Wednesday, and Intel rose nearly 8% after the opening, but investors seemed to remember that Intel's foundry business cannot even enter the top 10 in the world, and by the close of trading, the increase was only 0.35%.
(Q4 23 global wafer foundr ranking, Source: TrendForce)
Popular stocks performance
On Wednesday, most of the US tech giants suffered heavy losses. Apple fell 2.53%, Microsoft fell 1.33%, Amazon fell 2.64%, Meta fell 5.68%, Google-A fell 1.58%, Tesla fell 3.14%, Nvidia fell 6.64%, Intel rose 0.35%, Qualcomm fell 8.61%, and AMD fell 10.21%.
Chinese concept stocks were also affected. The Nasdaq Golden Dragon China index fell 1.86%. Alibaba fell 1.71%, Baidu fell 2.82%, Pinduoduo fell 2.96%, JD.com fell 0.81%, NetEase fell 0.03%, NIO fell 6.33%, Li Auto fell 2.82%, XPeng fell 3.91%, and JinkoSolar fell 6.38%.
Other news
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Cloud software development tool supplier GitLab attracts "acquisition interest"
Cloud software development tool provider GitLab rose 9.34% on Wednesday. According to reports, the company has attracted acquisition interest and is working with investment banks on the sale process. GitLab's investors include Alphabet, Google's parent company. It is reported that any transaction may take a few weeks, and no agreement has been reached yet.