Source: Wall Street See

The S&P 500 and Nasdaq closed down on Tuesday due to weak performance in chip and technology stocks, but the Dow and small-cap indexes rose slightly. Microsoft's second-quarter cloud revenue was lower than expected, and the stock price fell more than 7% after hours, with Amazon, Datadog, and Snowflake following suit in the after-hours market. However, AMD's AI revenue doubled in the second quarter, and the sales guidance for its MI300 accelerator was raised, causing an increase of up to 9% after-hours, and driving Nvidia to turn from a 3% drop after-hours to an increase of 3%.

The Federal Reserve's FOMC meeting opened, and US economic data continued to cool. The June JOLTS job vacancy fell to less than 8.2 million, still higher than expected, with the previous value revised upward to 8.23 million, representing resilience in the labor market to provide support for the economy. The May FHFA House Price Index in the US weakly grew at zero on a month-on-month basis, lower than expected, and the annual growth rate of 5.7% was the smallest in ten months. The consumer confidence index of the Conference Board in July was released before the market digested the previous value.

The market expects the Federal Reserve to announce its unchanged interest rate policy on Wednesday and suggest that it could start cutting rates as early as September. Some analysts say that if the Fed's statement is hawkish, it could be unfavorable for risk assets.

With the further decline of technology stocks and the resurgence of geopolitical conflicts in the Middle East, risk aversion in the US stock market rose after midday. The yield on 10-year US Treasuries plunged to a daily low, oil prices rebounded from a seven-week low, the yen rose for three consecutive barriers from 153 to 155, and gold prices returned to above 2400 US dollars.

The rise of the yen is also due to multiple reports stating that the Bank of Japan may consider a 15 basis point rate hike at its upcoming meeting. Atsushi Mimura, Japan's new vice minister for international affairs in the Ministry of Finance, said that recent yen depreciation is not worth the cost for Japan's economy. After considering from various angles, if it is really necessary to intervene in the foreign exchange market, we will do so.

On the commodity front, the Bloomberg Commodity Spot Index has fallen by nearly 6% since July, and is expected to post its worst monthly performance since May 2023. The price of copper on the London Metal Exchange (LME) has fallen by more than 6% this month, retreating below 9,000 US dollars after breaking through the record high of $11,000 per ton in May. The benchmark Brent crude oil price fell 8%. US natural gas fell by more than one-fifth in July, and in the agricultural products market, corn, wheat and soybean futures all fell.

The euro zone's second-quarter GDP growth rate exceeded expectations, but Germany, the "locomotive" of economy, unexpectedly stagnated. Spanish inflation slowed more than expected in July, and the currency market increased its bet on a rate cut by the European Central Bank, slightly lowering the euro.

Technology stocks led the decline again, with the Nasdaq falling more than 2% intraday and Nvidia falling 7%, while the Dow and small-cap indexes rose.

On Tuesday, July 30th, the US stock index showed mixed trends, with small-cap and blue-chip stocks rising and technology stocks falling together.

The major US stock indexes opened high, with the technology-dominated Nasdaq rising more than 0.56% in the morning before falling continuously, with the deepest decline exceeding 2% at noon; the S&P 500 index wiped out an increase of more than 0.4% at the beginning of the day and failed to turn upward after falling more than 1.1% at noon; and the Dow, which is closely related to the economic cycle, maintained its upward trend and rose more than 0.8% during the tail-end market; the Russell small-cap stock rose more than 0.9% and then halved its gains.

As of the close:

The S&P 500 index fell 27.10 points, or 0.50%, to 5,436.44. The Dow Jones Industrial Average rose 203.40 points, or 0.50%, to 40,743.33. The Nasdaq fell 222.78 points, or 1.28%, to 17,147.42.

Nasdaq 100 fell 1.38%; The Nasdaq Technology Market Capitalization Weighted Index (NDXTMC), which measures the performance of Nasdaq 100 technology stocks, fell 2.02%; The Russell 2000 Index rose 0.35%; The panic index VIX rose 6.20% to 17.63.

Most of the 11 sectors in the S&P 500 index rose, but they couldn't resist the downturn of the technology sector. The S&P Information Technology/Technology sector fell by 2.2%, daily consumer goods sector fell by more than 0.6%, optional consumer goods sector fell by more than 0.5%, raw materials sector fell by more than 0.3%, other sectors rose, telecommunication sector rose more than 0.1%, financial sector rose by about 1.2%, energy sector rose by 1.54%.

Regarding investment research strategies:

Savita Subramanian, head of U.S. equities and quantitative strategy for Bank of America, predicts the S&P 500 index will reach 5,400 by the end of the year, a goal the index has already achieved. However, rotational trading still has potential for rich returns and may focus on dividend stocks, "old-school" stocks that benefit from capital expenditures (such as infrastructure, construction and manufacturing stocks) and themes that do not revolve around AI.

Subramanian said that according to data dating back to 1936, the S&P 500 index has an average of three declines of 5% or more each year and one pullback of 10% or more each year, and this year's pullback has yet to come. In addition, August and September are traditionally weak periods for U.S. stocks, and the U.S. presidential election in November could exacerbate volatility. It is expected that index gains will slow down by December, but "a full bear market is unlikely."

Most of the "Magnificent 7" tech giants fell. Tesla fell 4.08%, Amazon fell 0.81%, Microsoft fell 0.89%, Meta fell 0.54%, Nvidia fell more than 7.04%, while Google A rose 0.45%, and Apple rose 0.26%.

It's worth noting that just days after the blue screen incident, Microsoft reported another interruption of some office applications and cloud services, causing the Starbucks APP to experience service interruption. Prior to this, media reports said Delta Air Lines had hired well-known lawyer David Boies to launch a claim against cybersecurity company CrowdStrike and Microsoft after a global IT failure.

Elon Musk said in recent Tesla earnings conference calls that investors would not understand the company unless they used the fully autonomous driving capability (FSD) system. William Stein, an analyst at Truist Securities who gave Tesla a "hold" rating, took the opportunity to test drive a Tesla and almost had an accident. But Stein maintains his rating and target price of $215 for the stock.

Chip stocks suffered a complete collapse. The Philadelphia Semiconductor Index fell 3.88%; The SOXX industry ETF fell 3.63%; The Nvidia twice-long ETF fell 14.1%.

Popular chip stocks, AnSemiconductor fell 5.49%, Taiwan Semiconductor fell 3.42%, Qualcomm fell 6.55%, Micron Technology fell 4.9%, Marvell Technology fell 2.61%, KLA Corp. fell 2.52%, Intel fell 2.27%, Broadcom fell 4.46%, Arm Holdings fell 6%, and AMD fell 0.94%.

AI concept stocks suffered a complete loss. 2.0 version of Nvidia concept stocks, self-driving sidewalk robot delivery company Serve Robotics fell 22.64%, Snowflake fell 0.53%, Palantir fell 2.62%, Oracle fell 1.91%, Dell fell 2.33%, CrowdStrike fell 9.7%, hitting a recent low in closing prices and Delta Air Lines plans to initiate a claim. BullFrog AI fell 2.66%, while Nvidia concept stocks SoundHound AI rose 3.56%, reportedly launching a voice assistant based on generative AI, and BigBear.ai rose 2.11%.

Chinese concept stocks fell overall. The Nasdaq Golden Dragon China Index fell 1.5%, approaching the February 5th closing level of 5,556.75 points. In ETFs, the China Tech Index ETF (CQQQ) fell 1.57%, and the Chinese Internet Index ETF (KWEB) fell 1.62%.

Among the popular Chinese concept stocks, Keep falling 4.6%, Tencent Holdings (ADR) fell 1.14%, Li Auto Inc. fell 2.64%, JD.com fell 0.94%, Bilibili fell 1.39%, Baidu fell 1.94%, Alibaba fell 0.79%, Xpeng fell 3.64%, PDD Holdings fell 3.47%, while Netease rose 0.52% and NIO Inc. rose 0.68%.

Other individual stocks with significant changes due to earnings reports are:

Pfizer rose 2.18%, and its second-quarter performance was better than expected, with estimated adjusted earnings per share for the full year being raised.

Luckin Coffee's stock fell 6.67%, with Q2 revenue up 35.5% YoY to USD 8.4 billion, setting a new single-quarter revenue high. However, the company's profit fell by 13% YoY, and the expansion of store numbers slowed to a new low in two years.

PayPal rose 8.59%, with second-quarter net revenue surpassing market expectations and its 2024 profit forecast being revised upward, rising by over 10% at one time in intraday trading, achieving its largest increase since November 2022.

Procter & Gamble fell 4.84%, with fourth-quarter sales unexpectedly declining below market expectations, with organic sales growth at a six-year low.

Buffett reduced his holdings in Bank of America for the ninth consecutive trading day, cashing out more than USD 3 billion this month. The total amount of the company's second largest position, holding Bank of America, is very close to the holding of American Express.

Novavax's stock price fell 25.7%. Previously, JPMorgan downgraded it from Neutral to Underweight, with a target price of USD 8.

Merck's stock fell 9.8%, the largest single-day drop since 2021, following its financial report downgrading annual profit expectations.

Intel is planning to lay off thousands of employees to save costs and provide financial support to reverse its performance decline, rising more than 1% after trading hours.

With Bitcoin briefly slipping below USD 66,000, digital currency concepts fell across the board. Beyond Inc. fell 9.79%, Applied Digital fell about 6.6%, MSTR, a "big holder of Bitcoin", fell about 4.8%, double-long Bitcoin ETF fell 4.4%, and Coinbase, a digital currency exchange, fell more than 4.1%, with Robinhood down about 3.7%, and Cathie Wood's spot Bitcoin ETF ARK 21SH BTN ETF fell over 2.1%.

European stocks rose ahead of the Bank of England's interest rate meeting on Thursday:

The pan-European Stoxx 600 rose 0.45% to 514.08 points. The Euro Stoxx 50 rose 0.53% to 4841.00 points.

The German DAX 30 index rose 0.49%. France's CAC 40 index rose 0.42%. Italy's FTSE MIB index rose 0.79%. The UK's FTSE 100 index fell 0.22%. The Netherlands' AEX index rose 0.43%. Spain's IBEX 35 index rose 0.76%.

Other individual stocks with significant changes due to earnings reports are:

Standard Chartered Bank rose 5.94% in European stocks, with Q2 pre-tax profit growing faster than expected, announcing its largest buyback ever, and raising its full-year performance guidance.

L'Oreal ADR rose 1.27%, with L'Oreal's Q2 sales growth slowing, with sales declining by over 2% in North Asia, among other regions, falling below expectations.

Airbus' Q2 EBIT exceeded expectations, maintaining its guidance for aircraft deliveries for the year at around 770, with its ADR rising more than 4% to its highest level in over three weeks.

Israeli attacks on Lebanon have forced investors to shift from technology stocks to safe-haven US Treasury bonds, with traders increasing bets on easing next year, and the two-year US Treasury bond yield falling more than 4 basis points.

Towards the end of the session, the two-year US Treasury bond yield, which is more sensitive to monetary policy, fell 4.33 basis points to a new low since February, at 4.3585%, trading at a range of 4.4059%-4.3441% intraday. The yield on 10-year US Treasury bonds fell by 3.11 basis points to 4.1433%, with an intraday range of 4.1860%-4.1278%, followed a sharp drop and refreshing the daily low after Israeli attacks on Lebanon. During intraday trading, demand for safe-haven assets pushed five-year and four-year US Treasury bond yields to their lowest levels since March.

The yield of 10-year German bonds in the euro zone benchmark fell by 1.9 basis points to its lowest level since April 12, at 2.34%, with intraday trading ranging from 2.371% to 2.333%. US stocks hit their lowest level since April 12 at the beginning of the stock market (bottoming out at 2.317% that day). The yield on two-year German bonds fell by 4.3 basis points to 2.550%, approaching the bottom of 2.474% on February 2 and the bottom of 2.4% on January 31.

The yield of10-year French bonds fell by 1.9 basis points, the yield of Italian 10-year treasury notes fell by 0.9 basis points, the yield of Spain 10-year treasury notes fell by 2.2 basis points, and the yield of Greece 10-year treasury notes fell by 1.4 basis points. The yield on 10-year UK treasury notes fell by 0.6 basis points.

Analysis shows that Spain's inflation slowed more than expected in July, and the currency market has increased bets on a rate cut by the European Central Bank. Traders have increased bets on the ECB's easing in 2025, with a 140 basis point rate cut expected by the end of next year, greater than the 138 basis point expected on Monday.

Escalating geopolitical conflict has boosted oil prices from their lows, but persistently low oil demand has pushed US crude oil below $75 to a seven-week low.

September WTI crude oil futures fell by $1.08, or more than 1.42%, to $74.73 a barrel, the lowest level since early June. September Brent crude oil futures fell by $1.15, or more than 1.44%, to $79.78 a barrel.

Oil prices initially fell in the Asian session, but then rebounded in early European stock trading and hit a daily high. US crude oil rose by more than 0.2% to nearly $76 a barrel, while Brent rose by more than 0.26% to approach the $80 mark. Oil prices then continued to fall and touched their daily lows during US stock market midday, with US crude and Brent falling by around 1.6% and 1.7%, respectively, falling below $74.6 and $78.5. They both rebounded slightly afterwards.

Analysts said that weak oil demand from the world's largest oil importer has pushed down oil prices. In addition, a ceasefire agreement between Israel and Hamas is expected to reduce risk premiums in the oil market by $4 to $7 per barrel. Goldman Sachs and Citigroup both believe that if former president Trump wins the US election, his tariff policy could lead to a drop in oil prices.

US August natural gas futures rose by 4.42% to $2.1260 per million British thermal units. The TTF Dutch natural gas futures in the European benchmark rose by 1.44% to €34.361 per megawatt hour. ICE UK natural gas futures rose by 2.21% to 80.760 pence per kilocalorie.

The dollar fell by about 0.1%, and the new head of Japan's foreign exchange affairs said that he would intervene to devalue the yen if necessary. The yen rose more than 0.8% to above 153.

The DXY, which measures the US dollar against six major currencies, fell by 0.08% to 104.478. The US stocks hit a new high of 104.799 points about half an hour before the opening of the stock market, breaking above the highest level in over two weeks since July 11.

The Bloomberg Dollar Index rose by 0.04% to 1260.81 points. At 22:14 (after the release of US job vacancy data), it hit a daily high of 1263.55 points and showed a high-to-low trend in the European and American sessions.

Most non-dollar currencies fell. The euro fell by 0.06% against the US dollar, the pound fell by 0.20% against the US dollar, and the US dollar fell by 0.37% against the Swiss franc.

Offshore renminbi (CNH) rose by 278 points to 7.2438 yuan against the US dollar, and overall trading ranged from 7.2761 to 7.2351 yuan during the day.

Among Asian currencies, the US dollar fell by 0.81% against the yen, at 152.78 yen, and the intraday trading range was between 155.22 and 152.66 yen. It showed a high-to-low trend throughout the day and successively fell below three important levels of 155, 154, and 153 yen. The euro fell by 0.85% against the yen to 165.22 yen, while the pound fell by 0.97% against the yen to 196.133 yen. There are also reports that Bank of Japan policy board members will discuss raising interest rates by 15 basis points to 0.25%.

The escalation of Middle East geopolitical conflicts caused the Shekel to fall more than 1% against the US dollar, hitting a daily low of 3.7690 Shekels.

Most mainstream cryptocurrencies fell. The largest market cap leader, Bitcoin, fell 1.65% to $66,740, hitting a daily low of $65,800 in post-market trading. The second largest, Ethereum, fell 0.90% to $3,306.50, trading in the range of $3,395.50-3,258.00 during the session.

Analysts point out that Bitcoin fell below $67,000 and traders are concerned that the US government may sell cryptocurrencies. According to reports, Arkham Intelligence, a blockchain research company, said a wallet related to the US government transferred $2 billion in Bitcoin to a new address on Monday. The US Treasury has confiscated billions of dollars in cryptocurrencies by cracking down on dark web markets such as Silk Road. Analysts say traders were bullish on Bitcoin after Trump attended a Bitcoin-themed conference, but are now selling due to fears that Bitcoin may be sold before Trump is elected.

The Fed's interest rate meeting is underway, and rate cut expectations and escalating Middle East conflicts have pushed gold prices up more than 1% and silver up more than 2%.

COMEX September gold futures rose 1.01% to $2,450.0 per ounce in the final session, and COMEX September silver futures rose 2.15% to $28.465 per ounce.

During the Asian market's opening, spot gold fell nearly 0.3% to approach $2,370, while spot silver fell more than 0.8% to below $27.7. Before the US stock market's noon, both prices rebounded and accelerated their rise, hitting a daily high. Spot gold rose more than 1.1% to exceed $2,400 per ounce, while spot silver rose more than 2% to exceed $28.4 per ounce.

Analysts say that because investors are still optimistic that both Europe and the United States will cut interest rates in September, the Fed is expected to maintain its current interest rate at the end of the two-day meeting on Wednesday, but will provide clues for a rate cut in September, which will support gold.

Escalating conflict in the Middle East has pushed up gold prices due to increased safe-haven demand. According to CCTV news, the Israeli military fired artillery at multiple locations in southern Lebanon on July 30th. The Israeli military claimed to have attacked a Hezbollah outpost and also attacked a southern suburb of Beirut, the capital of Lebanon.

Most London industrial metals have fallen for several days in a row. The economic barometer, Dr. Copper, fell 0.60% to $8,972 per ton, breaking through the $9,000 integer mark. London aluminum fell more than 1.15% to $2,224 per ton. London zinc fell $8 to $2,629 per ton. London lead fell by about 1.55% to $2,035 per ton. But London nickel rose about 1.48% to $16,071 per ton. London tin fell more than 1.76% to $28,779 per ton.

In addition, the Bloomberg Grains Subindex has fallen more than 20% from its peak at the end of May, with Chicago corn and soybeans falling about 1.9% on Tuesday. Shanghai lead night trading closed up about 0.8%, and Shanghai nickel rose more than 1.9%.

Editor/Lambor