Caixin News Agency, November 1st (Editor: Zhao Hao) On Thursday (October 31), the three major U.S. indices opened lower and closed lower, with both the S&P and Nasdaq recording their biggest single-day decline since September 4th.

At the close, the S&P 500 index fell by 1.86%, closing at 5,705.45 points; the Nasdaq Composite Index fell by 2.76%, closing at 18,095.15 points. On September 3rd, the two indices fell by 2.12% and 3.26% respectively.

The Dow Jones Industrial Average fell by 0.90%, closing at 41,763.46 points. The "fear index" - CBOE Volatility S&P 500 Index closed at 23.00, the highest closing level since August 9th.

Recently, the Nasdaq and S&P both hit historical record highs, but due to the poor performance on the last trading day, both indices wiped out their gains for October. The Nasdaq accumulated a 0.52% decline, the S&P accumulated a 0.99% decline, and the Dow accumulated a 1.34% decline.

Analysts believe that the outlook for large-cap technology stocks is disappointing, dampening market sentiment. On the previous trading day, both Microsoft and Meta reported "double-exceeding expectations" earnings, but Microsoft's revenue outlook was slightly weak, and Meta warned of a substantial increase in capital spending next year.

S&P 500 Index heatmap.

Ross Mayfield, a strategist at Baird Private Wealth Management, said, "I think we have reached a point where the enthusiasm and potential of artificial intelligence are hard to sustain. These companies have good long-term growth prospects, but they have not fully realized the growth reflected in their pricing."

Steve Sosnick of Interactive Brokers stated: "Halloween brings many investors trick rather than treat. The market sentiment seems to be shifting from enthusiasm for anything AI-related to investors hoping companies can get returns from massive expenditures."

Before the market opens, the US Federal Reserve's most favored inflation gauge - the US September Personal Consumption Expenditures (PCE) Price Index recorded a year-on-year growth of 2.1%, with the core indicator rising 2.7%, a slight deviation from expectations. After the data release, the market believes that the probability of a 'double rate cut' by the Federal Reserve is close to 70%.

Some analysts believe that market concerns over the US presidential election and Federal Reserve decision have impacted the market. Quincy Krosby of LPL Financial pointed out that it is almost certain that the election has led to a surge in volatility rather than bringing certainty.

Some signs indicate signs of a 'Trump Trade' retreat. On the currently most popular Polymarket crypto predictive platform, the probability of Trump winning has dropped from 66% to 60%. However, this number also reflects Trump's relative stability.

During the day, Iranian Islamic Revolutionary Guard Corps Commander Hossein Salami mentioned at an event that Iran will give Israel an 'unimaginable response'. Israeli intelligence also indicates that Iran is planning to launch attacks on Israel in the coming days - just before the US election day.

Popular stocks performance

Large-cap tech stocks collectively plunged, with (by market cap) Apple down 1.82%, Nvidia down 4.72%, Microsoft down 6.05%, Google C down 1.96%, Amazon down 3.28%, Meta down 4.09%, and Tesla down 2.99%.

PHLX Semiconductor Index fell by 4.01%, with all 30 component stocks suffering losses. Xilinx dropped by 17.45%, Wolfspeed fell by 11.56%. Among the larger market cap companies, Taiwan Semiconductor declined by 2.03%, Broadcom by 3.89%, ASML Holding by 1.65%, and AMD by 3.05%.

China concept stocks associated with Donald Trump continued to decline, with the Donald Trump Media Technology Group falling by 11.72%, while Phunware dropped by 5.10%. This also dragged down crypto concept stocks, with Coinbase falling by 15.34% and Riot Platforms dropping by 11.83%.

As for Chinese concept stocks, the Nasdaq China Golden Dragon Index fell by 1.30%, accumulating a 4.50% decline in October.

Most popular Chinese concept stocks experienced declines, with Li Auto Inc. dropping by 13.58%, NIO Inc. falling by 4.67%, Tencent Music dropping by 2.54%, Baidu falling by 1.07%, Xpeng dropping by 1.06%, Alibaba declining by 0.73%, New Oriental decreasing by 0.62%, PDD Holdings falling by 0.23%, TAL Education rising by 0.91%, and JD.com increasing by 1.47%.

Company news

The EU will assess Nvidia's acquisition of the AI startup company Run:ai, as it may threaten the competition in the respective markets of the two companies.

The EU will assess Nvidia's acquisition of the AI startup company Run:ai, as this could pose a threat to competition in the markets of both companies. It is reported that Nvidia may need to make concessions to ensure approval of the transaction.

Li Auto Inc.: Currently not planning to enter the Western European and North American markets.

During the earnings conference call for li auto inc in the third quarter of 2024 held today, the management mentioned the importance of overseas markets and emphasized that the strategies are different. Li auto inc is currently selling in limited markets, with the Middle East becoming a target market, while having no plans to enter Western Europe and North America markets.

According to well-known analyst Ming-Chi Kuo, the possibility of Super Micro Computer (Super Micro) being suspended or delisted is increasing.

Renowned analyst Ming-Chi Kuo wrote that, based on experience, the resignation of auditing firms is a serious signal. Super Micro Computer (SMIC.O) is facing an increased possibility of suspension or delisting, which will indirectly weaken Super Micro's competitiveness and bring enormous challenges to its survival, especially since its competitors are well-funded, resource-rich giants. Although Super Micro's influence in the AI server industry has waned (they are behind Foxconn and Wistron in volume production by 3-6 months in terms of GB200), the company still maintains a strong capability in AI server design and manufacturing. If my analysis is correct, there may be significant adjustments in the executive team or board of directors. Further corporate consolidation is also possible, as seen in AMD's acquisition of ZT Systems.

Q3 Financial Report Summary

In the fourth quarter, Apple's revenue slightly exceeded expectations, but revenue in Greater China fell short of expectations.

Apple's fourth-quarter revenue was $94.93 billion, slightly higher than analysts' expectations of $94.36 billion; revenue in Greater China was $15.03 billion, below analysts' expectations of $15.8 billion; iPhone revenue was $46.22 billion, compared to analysts' expectations of $45.04 billion; iPad revenue was $6.95 billion, compared to analysts' expectations of $7.07 billion; Mac revenue was $7.74 billion, matching analysts' expectations; revenue from wearables, home, and accessories was $9.04 billion, below analysts' expectations of $9.17 billion; product revenue was $69.96 billion, exceeding analysts' expectations of $69.15 billion; service revenue was $24.97 billion, below analysts' expectations of $25.27 billion; earnings per share for the fourth quarter were $0.97, down from $1.46 in the same period last year.

Amazon's fourth-quarter profit outlook midpoint is above market expectations.

Amazon's third-quarter net sales were $158.9 billion, exceeding analysts' expectations of $157.29 billion; earnings per share for the third quarter were $1.43, estimated at $1.16; operating profit in the third quarter was $17.4 billion, estimated at $14.75 billion; operating profit margin in the third quarter was 11%, estimated at 9.34%; AWS net sales in the third quarter were $27.45 billion, estimated at $27.49 billion; estimated fourth-quarter net sales of $181.5 billion to $188.5 billion, with analysts expecting $186.36 billion; estimated fourth-quarter operating profit of $16 billion to $20 billion, with analysts expecting $17.49 billion.

Intel's fourth-quarter revenue outlook is slightly above expectations.

Intel's third-quarter revenue was $13.28 billion, with analysts expecting $13.02 billion; adjusted loss per share of $0.46 for the third quarter, compared to earnings per share of $0.41 for the same period last year; Intel Foundry's third-quarter revenue was $4.35 billion, with analysts expecting $4.44 billion; Data center and artificial intelligence (AI) revenue for the third quarter was $3.35 billion, with analysts expecting $3.15 billion; Adjusted gross margin for the third quarter was 18%, compared to analysts' expectation of 38%; Adjusted operating profit margin for the third quarter was -17.8%, compared to 13.6% in the same period last year; Fourth-quarter revenue is expected to be between $13.3 billion and $14.3 billion, with analysts expecting $13.63 billion; Expected adjusted earnings per share for the fourth quarter is $0.12, compared to analysts' expectation of $0.06; Expected adjusted gross margin for the fourth quarter is 39.5%, compared to analysts' expectation of 38.7%.

United States Steel's third-quarter adjusted earnings per share exceeded expectations

United States Steel's net sales in the third quarter were $3.85 billion, exceeding analysts' expectations of $3.76 billion; Adjusted earnings per share in the third quarter were $0.56, higher than analysts' expected earnings of $0.47; Adjusted EBITDA in the third quarter was $0.319 billion, above analysts' forecast of $0.3027 billion; Steel shipments in the third quarter reached 3.52 million tons, surpassing analysts' estimate of 3.43 million tons.