In September, US retail sales exceeded expectations with a month-on-month increase of 0.4%, highlighting continued consumer support for the economy. The number of initial jobless claims last week was 0.241 million, lower than expected, causing traders to reduce bets on a Fed rate cut within the year, pushing up US bond yields and the dollar. Additionally, the prospect of rate cuts boosted demand expectations, leading to a rise in US homebuilder confidence to a four-month high in October.

The European Central Bank cut interest rates for the third time this year as planned, reducing rates by 25 basis points. The Eurozone's September CPI remained steady at 1.7% year-on-year, the first time in three years it fell below the central bank's target. The market increased bets on rate cuts, with a 20% probability of a significant 50-basis-point rate cut in December. The swap markets now largely expect a 25-basis-point rate cut at each meeting up to April next year, previously expected until March.

In August, with the Japanese yen rebounding more than 2% and easing pressure on its currency, the US's top creditor, Japan, increased its holdings of US Treasuries by $13.5 billion, marking the first increase in nine months and the first in this year. China reduced its holdings by $1.9 billion, marking the sixth consecutive month and approaching a low not seen since 2009.

Furthermore, investors continue to monitor the geopolitical situation in the Middle East, with reports from CCTV News that Israel claimed to have killed Hamas leader Sinwar, leading Palestinian President to host an emergency meeting.

On Thursday, October 17th, the S&P, Nasdaq, and chip stocks all took a significant downturn late in the day. The S&P hit a new intraday high before turning lower, the Nasdaq also nearly erased its 0.9% early gains, but the Dow hit intraday and closing highs for the second consecutive day. The Nasdaq was boosted by chip stocks, rising by 0.9% at one point, while the Russell small caps saw a stop to their previous four-day rally, moving away from a nearly three-year high. The Philadelphia Semiconductor Index initially rose by 2.8% but later narrowed to almost 1%, while the Nasdaq Golden Dragon China Index dropped by 4% before closing down 3.6%, marking a three-week low. Nvidia rose 3.8% before closing up 0.9%, hitting a new high during trading, Taiwan Semiconductor rallied over 13% before closing up nearly 10% and reaching its highest levels in trading and at the close. ASML rebounded, and Netflix saw a nearly 4% post-earnings rise.

• The S&P large and small-cap indices closed lower, while the Dow hit new highs for two consecutive days. The S&P 500 index closed down 1 point, a decrease of 0.02%, at 5841.47 points. The Dow, closely linked to the economic cycle, rose by 161.35 points, an increase of 0.37%, to 43239.05 points. The Nasdaq, dominated by tech stocks, rose by 6.53 points, an increase of 0.04%, to 18373.61 points. The Nasdaq 100 index saw a small increase. The Nasdaq Technology Market Cap Weighted Index (NDXTMC), which measures the performance of the Nasdaq 100 tech sector, closed up by 0.17%. The more economically sensitive Russell 2000 small-cap index closed down by 0.25%. The VIX fear index dropped by over 2% and is close to 19.

• US industry ETFs closed with mixed gains and losses. The semiconductor ETF rose by nearly 2%, while regional bank ETFs, bank ETFs, and global tech stock ETFs each rose by less than 1%. In contrast, utility ETFs fell by nearly 1%, healthcare ETFs, biotech index ETFs, and daily consumer goods ETFs each fell by around 0.5%.

• "The Big Tech Seven Sisters" all rose, with only Google falling. Apple closed up 0.2%, NVIDIA up 0.9%, Tesla down 0.2%, Microsoft up 0.14%, Google A down 1.4%, Meta slightly up, and Amazon up 0.3%."

• On the news front, as NVIDIA's main supplier, Taiwan Semiconductor's market cap in the US stock market increased by over a trillion dollars in a single day, with the total market cap surpassing a trillion dollars at one point during the day. Due to strong demand for AI, the company's third-quarter net income surged by 54% year-on-year, with a record high gross margin, and the full-year revenue growth outlook raised to 30%. Amazon's AWS cloud computing department's new system based on NVIDIA's Blackwell AI chip isn't expected to go live until next year, delayed from expectations. Reports suggest that the EU is considering fines on X platform, contemplating including Musk's business empire revenue in the calculation. Chinese autonomous driving unicorn Xiaoma Zhixing has applied for a US IPO, aiming to become the "global Robotaxi leader".

• Chip stocks rose across the board, but the gains narrowed significantly towards the end of the trading day. The Philadelphia Semiconductor Index rose by 2.8%, but the increase narrowed to nearly 1%, with industry ETF SOXX up 0.8%; NVIDIA's double-long ETF rose by 1.8%. Intel rose by 0.6%, TSMC ADR rose by 9.8%, Broadcom rose by 2.7%, Arm Holdings rose by 1.4%, Micron Technology rose by 2.6%, Applied Materials fell by 0.7%, ASML ADR initially down by 2.7% then turned up by 2.5%, KLA Corp. down by 1.8%, AMD slightly up, erasing most of the intraday gains, Qualcomm switching to a 0.2% decline.

• AI concept stocks had mixed movements. Dell Technologies rose by nearly 2%, Super Micro Computer fell by 2.4%. Serve Robotics dropped by nearly 5%, CrowdStrike rose by 1.3%, BullFrog AI fell by 4.7%, NVIDIA-backed AI voice company SoundHound AI fell by 0.4%, BigBear.ai fell by over 3%, C3.ai fell by 0.9%, Snowflake turned up by 0.1%, Oracle rose by 0.5%, Palantir rose by 0.2%.

• Chinese concept stocks saw larger declines. The Nasdaq Golden Dragon Index initially dropped by 4% then closed down by 3.6%, hitting a three-week low. In ETFs, the China Technology Index ETF (CQQQ) dropped by over 2%, the China Internet Index ETF (KWEB) by 3.8%, the FTSE China Bull 3X ETF (YINN) down by 7.4%, the FTSE **** 3X ETF (YANG) up by over 7%, and the 'China Dragon' ETF Rondhl China ETF (DRAG) down by 2.4%. However, the FTSE A50 futures continued their night trading with a 0.14% increase, closing at 13,033.000 points.

• Among popular Chinese concept stocks, Fangdd Network, which soared yesterday, fell by over 24%, Ke Holdings by over 11%, JD.com by over 4%, Alibaba and Tencent ADRs by about 2%, Bilibili and Li Auto by over 5%, NIO and Zeekr by over 6%, XPeng by over 7%, Baidu by over 3%, Pinduoduo by nearly 3%.

• Other key stocks: 1) Small nuclear power company Oklo, in which OpenAI CEO Sam Altman holds shares, initially fell by 14.7% then closed down by nearly 5%, after retracting most of the 41.97% increase seen on Wednesday. NuScale Power, which surged yesterday, also dropped by over 5%. 2) Online travel company Expedia rose by nearly 5% to a two-and-a-half-year high, with reports suggesting that ride-sharing leader Uber is exploring an acquisition, causing Uber to fall by 2.5%. 3) Luxury electric vehicle manufacturer Lucid Group fell by around 18%, announcing public offerings of nearly 0.2625 billion common shares to raise funds, with Saudi Arabia's Public Investment Fund subsidiary company set to purchase over 0.37 billion shares. 4) Alternative asset management giant Blackstone saw a rise of over 6%, its best increase since December last year, both third-quarter revenue and profits exceeding expectations. 5) 'Buy now, pay later' payment provider Affirm fell by over 8%, the worst in nearly three months, as competitor Klarna announced adding its payment option to Apple Pay.

The European Central Bank's third interest rate cut of the year boosted European stocks universally, with only the telecommunications sector declining due to Nokia's drag. Stock indexes in France, Denmark, and Italy all rose by over 1%, with the pan-European stock index briefly rising by over 1% during the day.

• European STOXX 600 index closed up 0.83% at 523.91 points. Eurozone STOXX 50 index rose by 0.79%, while the FTSE All-World Developed Europe Index rose by 0.87%.

• Nokia's share price once fell over 5%, with its third-quarter sales declining by 8% year-on-year due to a slowdown in the Indian market. Food giant Nestle initially fell by 2.7% before turning to a 2.5% increase, after previously lowering its full-year sales expectations.

• Germany's DAX 30 index closed up 0.77%, France's CAC 40 index rose by 1.22%, Italy's FTSE MIB index increased by 1.09%, and the UK's FTSE 100 index rose by 0.67%.

Positive US retail sales and jobless claims data supported a rise in US bond yields, with long-term bond yields increasing more significantly. The 10-year Treasury bond yield rose over 8 basis points, briefly surpassing 4.10%. Shorter-term rates also saw increases.

• US bonds: At the close, the yield on the 10-year benchmark Treasury bond rose by 7.45 basis points to 4.0866%, trading in the range of 4.0161%-4.0964%. The 2-year Treasury yield increased by 3.43 basis points to 3.9719%, reaching 3.95% before US retail sales data release. The 30-year Treasury bond yield rose by 10 basis points to 4.40% during the session.

• Research and strategy: Citigroup closed out its short US Treasury/long UK Treasury strategy recommendation made two weeks ago for profit. The creator of the US bond volatility index, Harley Bassman, mentioned an anticipated storm of historical volatility in the bond market post the US election on November 5th.

• Eurozone bonds: At the close, the 10-year German bond yield rose by 2.4 basis points to 2.208%, after the European Central Bank's interest rate cut, it initially rose to 2.210% from 2.195% during Lagarde's press conference, later hitting a daily high of 2.223%. The 2-year German bond yield fell by 2.4 basis points to 2.146%. The 10-year French bond yield stopped falling and turned upward by 2 basis points, while the 10-year Italian bond yield stopped falling and increased by 0.3 basis points. The 10-year UK bond yield rose by more than 2 basis points to 4.089%, with the 2-year yield rising by over 1 basis point.

Positive economic data pushed the US dollar index to an 11-week high, amid expectations for looser European interest rate policies, leading to the euro falling for four consecutive days to an 11-week low. The Japanese yen fell below 150 to its lowest level since August 1st, reigniting concerns over Japanese authorities' intervention risks. The offshore renminbi briefly fell by 100 basis points and briefly dropped below 7.14 yuan to an eight-week low, while Bitcoin dipped nearly 2% to fall below $67,000.

• U.S. Dollar: The U.S. Dollar Index DXY rose by 0.3% to 103.87, the highest since August 2, with a cumulative rebound of 3.34% since the end of trading on September 27. The Bloomberg Dollar Index rose by 0.12% to 1254.84, also approaching the top of 1259.42 on August 2, with a cumulative rebound of 2.93% since September 27.

• Non-U.S. Currencies: The euro against the U.S. Dollar fell the most by 0.5% to approach 1.08, the lowest since August 2. The British Pound slightly turned higher against the U.S. Dollar and rose above 1.30, still hovering near a two-month low, and the Euro against the British Pound hit a new low for the month. The U.S. Dollar rose by 0.08% against the Swiss Franc. Among commodity currencies, the Australian Dollar rose by 0.41% against the U.S. Dollar, the New Zealand Dollar rose by 0.05% against the U.S. Dollar, and the U.S. Dollar rose by 0.32% against the Canadian Dollar.

• Research Strategy: Barclays sees a bearish trend for the Euro/US Dollar as the market has not fully digested the risk of Trump's re-election. If former U.S. President Trump returns to the White House and imposes high tariffs, it will cause "non-linear impact" on the market, and a steep bear market will strengthen the U.S. Dollar. JPMorgan also believes that emerging market assets have not fully priced in the risks of the U.S. election, and Trump's potential tariff stance will boost the U.S. Dollar.

• Japanese Yen: The Japanese Yen against the U.S. Dollar declined by 0.5% at the midday of U.S. stocks, then fell by 0.4% to 150.18 at the closing price, with a trading range during the day of 149.25-150.32 Japanese Yen. The Euro against the Japanese Yen rose by 0.06% to 162.65 Japanese Yen, after a V-shaped reversal following the European Central Bank's announcement of a 25 basis point rate cut; and the British Pound against the Japanese Yen rose by 0.55% to 195.377 Japanese Yen.

• Offshore Renminbi (CNH): The offshore Renminbi against the U.S. Dollar fell by a hundred points during the European stock period and briefly dipped below 7.14, the lowest since August 23. The decline narrowed significantly during the U.S. stock period, with a slight drop to 7.1370 at the end of the session, trading overall between 7.1258-7.1475.

• Cryptocurrencies: The largest cryptocurrency, Bitcoin, dropped nearly 2% and fell below $67,000, while the second-largest, Ethereum, dropped over 1% and fell below $2600. At the New York session close, the CME Bitcoin futures main contract was at $67,050.00, down 1.21% from Wednesday's New York close. The Biden administration arrested and sued American hackers attacking SEC accounts over Bitcoin ETF approval issues. The CME Ethereum futures DCR main contract was at $2601.00, down 1.07% from Wednesday.

U.S. Crude Oil: Last week, the unexpected decrease in EIA crude oil inventories halted a four-day decline in international oil prices, lifting them from a two-week low. U.S. oil rose by 1% to briefly surpass $71 during the day, while Brent oil rose by 0.9% approaching $75.

• WTI Crude Oil: WTI November crude oil futures closed up $0.28, an increase of about 0.40%, at $70.67 per barrel.

• Crude Oil: Brent December crude oil futures closed up $0.23, up about 0.31%, at $74.45 per barrel.

• On the news front, some analysts have stated that there is still a risk of supply disruption in the Middle East, providing support for oil prices. Last week, US EIA crude oil inventories decreased by 2.19 million barrels, while the market originally expected an increase of 1.3 million barrels. Gasoline and refined oil inventories also decreased, implying robust demand.

• Natural Gas: NYMEX November natural gas futures closed down 0.84% at $2.3470 per million British thermal units. The TTF Dutch natural gas futures, a European benchmark, rose by a maximum of 2%, rebounding from the recent one-week low.

The uncertainty of the US election and expectations of more loose monetary policies have driven spot gold to approach $2700 again, hitting a new historical high. Gold has risen over 30% this year. After the positive US economic data release, the increase in gains narrowed, and silver turned lower towards the end of the session. The dollar and US bond yields rising put pressure on metal prices, with zinc falling by 2.9%, while nickel and aluminum falling by up to 1.6%.

• Gold: COMEX December gold futures rose 0.6% to $2707.60 per ounce at the end of the session, breaking through $2710 during the session to reach a new historical high. Spot gold initially soared by about $23 or 0.9% at the start of US trading, nearing $2697 to set a new high, ending the session 0.6% higher, holding above $2690.

• Silver: COMEX December silver futures fell slightly by 0.08% to $31.865 per ounce at the end of the session. Spot silver initially rose by 1% and briefly surpassed $32 at the start of US trading, then slightly declined to trade at $31.67 by the end of the session, still hovering near a week's high.

• London industrial metals across the board decline: LME copper futures fell by $42 to $9516 per ton. LME aluminum futures fell by $30, a decrease of 1.16%, to $2554 per ton. LME zinc futures remained flat at $3052 per ton. LME lead futures fell by $14 to $2070 per ton. LME nickel futures fell by $274, more than 1.58%, to $17005 per ton. LME tin futures fell by $932, approximately 2.90%, to $31218 per ton. LME cobalt futures remained flat at $24300 per ton.

• Shanghai tin and nickel night market fell by more than 2%, while alumina continued to retreat from its historical high. Most domestic futures markets fell at night, with glass down by about 6%, soda ash down more than 5%, coke down by about 4%, and rubber up by over 1.8%. Iron ore fell below $100 per ton on the same day. COMEX copper futures fell by 0.85% to $4.3310 per pound.

Editor/rice