Technology stocks were the culprits behind the decline in U.S. stocks on Wednesday. ASML, Europe's most valuable technology company, saw its first-quarter new orders significantly underperform expectations, plummeting by 61% quarter-on-quarter, dragging down chip stocks in Europe and the U.S., with tech giants like NVIDIA, a benchmark for AI, largely not immune. The three major U.S. stock indices opened high in the morning and turned bearish, with the S&P and Nasdaq failing to rebound during the session, further下探ing to a two-month low. During the session, there were media reports discussing options to strike Iran's nuclear facilities, with some comments suggesting that this had triggered a decline in U.S. stocks.
Corporate earnings continue to attract attention. Travelers, an insurance company that suffered from high disaster losses and poor profits, plummeted, leading the Dow Jones Industrial Average down. UnitedHealth, a healthcare giant that reported strong earnings on Tuesday, failed to reverse the Dow's downward trend. United Airlines, which provided a positive second-quarter profit outlook but nearly halved its full-year narrow-body aircraft delivery expectations, saw its stock soar, while another Dow component, Boeing, fell back. Two European consumer goods giants, LVMH and Adidas, reported good news of strong growth in some Chinese markets and robust demand for some footwear, helping to offset the impact of technology stocks led by ASML and bolstering the overall rebound of the European stock market.
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Wall Street Journal has mentioned that U.S. stocks on Tuesday "didn't care too much" about Federal Reserve Chairman Powell's dampening of rate cut expectations, partly because corporate earnings have replaced monetary policy as the main driver of current U.S. stock market volatility. Barclays strategists recently stated that due to investor concerns about high interest rates and geopolitical uncertainties, corporate earnings bear the responsibility of driving the stock market further up. Some comments suggest that the combination of geopolitical uncertainties, rising interest rates, a hawkish Federal Reserve stance, and frustration over inflation has allowed bears to temporarily take the lead. Investor sentiment and behavior have changed significantly from last October, laying the foundation for long-term horizontal fluctuations.
In the bond market, the U.S. Treasury completed the auction of $13 billion worth of 20-year Treasury bonds, with bid multiples and other indicators showing strong demand. After the auction results were announced, U.S. Treasury bond prices rebounded faster, and the yield decline widened, accelerating the departure from a five-month high. The benchmark 10-year U.S. Treasury bond yield returned below 4.60%, falling more than 10 basis points from the high set on Tuesday, and the two-year U.S. Treasury bond yield, sensitive to interest rates, did not continue to hover around 5.0%.
In the foreign exchange market, the UK's March CPI growth slowed to the lowest in two and a half years, reinforcing expectations for a rate cut by the Bank of England. The pound rebounded against the dollar and surged to a one-month high against the euro, causing the dollar to retreat. The U.S. dollar index, which had been setting five-month highs for several days, temporarily halted its rise, recording its first weekly loss, allowing the yen to temporarily bid farewell to the lows since 1990. Some analysts still see the dollar as bullish, with some saying that any escalation of the Middle East crisis will bring safe-haven inflows to the dollar, benefiting it. Bitcoin, after the U.S. stocks turned bearish, accelerated its downward trend, breaking below the low set after Iran's attack on Israel over the weekend, and for the first time in over a month, it fell below the $60,000 mark during trading.
Among commodities, gold, which had set a record high for four consecutive days, fell back. International oil prices plummeted, with worries about demand overwhelming the supply risks brought by the situation in the Middle East. The U.S. Department of Energy reported that U.S. EIA crude oil inventories had increased for four consecutive weeks, with an increase of more than 2.7 million barrels, more than double the analysts' expectations. After the data was released, the oil price drop expanded to more than 3%, erasing all gains for the month and marking the worst single-day performance since Saudi Arabia unexpectedly lowered its official crude oil prices three months ago. Some comments mentioned that the EIA data showed gasoline demand was disappointing again, with the four-week average dropping to a low for the same period since 2022. Analysts pointed out that Iran's attack on Israel is not expected to quickly trigger U.S. sanctions on Iranian oil exports, and the crude oil premium brought by geopolitical conflicts is collapsing.
The S&P and Nasdaq fell for four consecutive days, with Google being the only one among the tech "Seven Sisters" to rise, while NVIDIA fell nearly 4%. After earnings, Travelers plummeted, and United Airlines soared.
The three major U.S. stock indices opened collectively higher, with the Nasdaq Composite Index, which had risen nearly 0.6% at the beginning of the session, turning bearish half an hour after the opening, and the decline expanded to more than 1% at noon. The S&P 500 Index, which had risen by more than 0.5% at the beginning, and the Dow Jones Industrial Average, which had risen by nearly 240 points at the beginning, turned bearish one after another in the morning. At noon, the S&P had fallen nearly 0.7%, and the Dow had fallen by more than 160 points, or more than 0.4%, before the decline narrowed, with the Dow turning positive and the S&P briefly turning positive. In the end, the three major indices closed lower for the second day of the week, with the S&P and Nasdaq falling for four consecutive days, setting the longest losing streak since January 5 for the S&P.
The Nasdaq closed down 1.15%, at 15,683.37 points, and the S&P closed down 0.58%, at 5,022.21 points, both刷新ing their closing lows since February 21 for three consecutive days. The Dow Jones Industrial Average, which had just ended a seven-day losing streak on Tuesday, closed down 45.66 points, or 0.12%, at 37,753.31 points, approaching the closing low it set on Monday since January 18.
The Russell 2000, a small-cap index dominated by value stocks, closed down 0.99%, falling for four consecutive days to its lowest level since February 5. The Nasdaq 100 Index, heavily weighted with technology stocks, closed down 1.24%, falling back to its closing low since February 21 after rebounding on Tuesday. The Nasdaq Tech Market Value-Weighted Index (NDXTMC), which measures the performance of technology sector components in the Nasdaq 100 Index, closed down 1.75%, falling back to its low since February 28.In the S&P 500 sectors, seven out of the major segments closed lower on Wednesday. The IT sector, which includes chip stocks like Nvidia, led the decline with a 1.7% drop. Other sectors fell no more than 0.8%, with the communication services sector, where Google is located, falling just over 0.1%, marking the smallest decline. Among the four sectors that closed higher, utilities, which rose by more than 2%, took the lead, followed by consumer staples, which increased by nearly 0.5%, and financials and materials, both up by 0.2%.
Among Dow Jones components, insurance company Travelers (TRV), which reported lower-than-expected earnings and revenue for the first quarter, led the decline, closing down 7.4%. Intel and Amazon fell by more than 1%, while Boeing (BA), which had dropped by more than 1% during midday, closed down by 0.2%. UnitedHealth (UNH), which had surged by over 5% after reporting earnings on Tuesday, initially rose by more than 4% and closed up 2.1%, leading the gains for two consecutive days.
Among the tech giants known as the "Seven Sisters," including Microsoft, Apple, Nvidia, Google's parent Alphabet, Amazon, Facebook's parent Meta, and Tesla, only Alphabet did not experience a decline during the session. Tesla, which had led declines in the previous two days, turned lower at the start of the session, falling by 2.1% in the morning before narrowing its losses, closing down by nearly 1.1%, marking four consecutive days of losses and hitting its lowest closing level since April 26, 2023, for two days in a row.
Among the FAANMG tech stocks, Meta and Netflix, which turned lower at the start of the session, closed down by 1.1% and 0.6% respectively. Meta fell for four consecutive days to its lowest level since April 1, while Netflix failed to continue rising from the low it hit on Monday, which was its lowest since March 15. Apple, which had risen by more than 0.7% in the morning, closed down by 0.8%, approaching its lowest level since October 26, 2023, set last Wednesday. Microsoft, which had risen by 1% at the start, turned lower in the morning and closed down by nearly 0.7%, hitting its lowest level since March 11. Amazon, which had risen by nearly 0.7% at the start, turned lower in the morning and closed down by 1.1%, marking four consecutive days of losses and hitting its lowest level since April 4 for three days in a row. Alphabet, which had fallen for three consecutive days to its lowest level since April 5, initially rose by 1.7% and closed up by nearly 0.6%.
After a general rebound on Tuesday, chip stocks fell back, with the Philadelphia Semiconductor Index and the semiconductor industry ETF SOXX turning lower at the start and closing down by nearly 3.3% and about 3% respectively, falling to their lowest closing levels since February 21. Among chip stocks, ASML, listed on NASDAQ, fell by more than 8% during the midday, reaching a drop of 8.3%, and closed down by nearly 7.1%. Nvidia, which had risen by nearly 1.6% at the start, turned lower within half an hour of opening and closed down by nearly 3.9%, falling to its lowest level since March 1. At the close, AMD, which had turned lower at the start, fell by 5.8%, and Intel fell by 1.6%. TSMC, which had risen by nearly 2% at the start, fell by nearly 0.6%.
AI concept stocks generally followed the broader market lower. At the close, SoundHound.ai (SOUN), BigBear.ai (BBAI), and Palantir (PLTR) fell by more than 2%, while Super Micro Computer (SMCI), Oracle (ORCL), and Astera Labs (ALAB), known as "little Nvidia" for selling data center interconnect chips, fell by more than 1%. Adobe (ADBE) fell by about 0.4%, while C3.ai (AI) rose by 0.5%.
Bank stock indices rebounded across the board. The KBW Bank Index (BKX), which had fallen back to its lowest closing level since March 1 on Tuesday, closed up by 0.7%. The KBW Nasdaq Regional Banking Index (KRX) closed up by nearly 0.2%, and the SPDR S&P Regional Banking ETF (KRE) also rose by nearly 0.2%, both rebounding after three consecutive days of losses and moving away from their respective lowest closing levels since November 28, 2023, and November 30, 2023, set on Tuesday.
Among the major banks, Morgan Stanley, which will also sell bonds after reporting earnings following JPMorgan Chase and Wells Fargo, closed up by nearly 1.1%. Bank of America, which had fallen by 3.5% after reporting earnings on Tuesday, rose by 1.6%. Citigroup, which had risen by more than 2% in the morning, was set to close higher for the first time since its earnings report last Friday. By the close, Goldman Sachs had risen by nearly 1.8%, Wells Fargo by nearly 1.4%, while JPMorgan Chase, which had turned lower in the morning, fell by 0.4%.
Among individual stocks reporting earnings, United Airlines (UAL), which reported a first-quarter EPS loss lower than expected, revenue higher than expected, and a second-quarter profit forecast higher than expected, closed up by nearly 17.5%. In contrast, J.B. Hunt Transport Services (JBHT), a transportation and logistics company that reported first-quarter profits and revenue below expectations and mentioned that domestic demand had not grown as expected, closed down by 8.1%. Additionally, Autodesk (ADSK), a software company that announced further delays in reporting its earnings due to an ongoing internal investigation into its directors, fell by more than 8% in the morning and closed down by 5.8%.
Among the more volatile stocks, Eli Lilly (LLY), one of the "weight loss drug duopoly," which showed its best-selling weight loss drug Zepbound had the potential to improve sleep apnea symptoms beyond institutional expectations in a phase III trial, rose by more than 3% in the morning and closed up by 0.5%. Resmed (RMD), which produces devices to treat sleep-related breathing disorders, closed down by nearly 6%. Urban Outfitters (URBN), a clothing retailer whose stock was downgraded by Jefferies from hold to underperform due to a perceived slowdown in foot traffic at its branded stores, fell by more than 4% at the start and closed down by 2.5%.Popular Chinese concept stocks experienced mixed gains and losses, with some turning lower or narrowing their declines in the early morning. The NASDAQ Golden Dragon China Index (HXC) initially rose by more than 0.7%, turned lower in the early session, and closed down by 0.3%, marking three consecutive days of losses and setting a new closing low since February 13th. The Chinese concept ETF KWEB closed down by about 0.4%, while CQQQ closed up by nearly 0.7%. Among the new forces in car manufacturing, Xiaopeng Motors closed up by 3.8%, NIO Inc. rose by more than 2%, Li Auto rose by more than 1%, and Xiaomi's pink sheet rose by about 0.5%. Among other individual stocks, by the close, Baidu fell by nearly 2%, Alibaba fell by more than 1%, NetEase fell by 0.5%, Tencent's pink sheet fell by 0.4%, Pinduoduo, which turned lower in the early session, fell by less than 0.1%, while JD.com rose by nearly 0.4% in the early session and Bilibili rose by less than 1%.
In terms of European stocks, the pan-European index, which had its largest drop in nine months on Tuesday, slightly rebounded. The Stoxx Europe 600 index, which fell by more than 1.5% on Tuesday, closed up by less than 0.1%, temporarily leaving the closing low it set on Tuesday since March 6th. Major European national stock indices mostly closed higher, with the UK stocks that fell for two consecutive days and the German, French, and Italian stocks that retreated on Tuesday all rebounding, while the Dutch domestic index, where ASML is located, closed down by nearly 1.1%.
Among the various sectors, the personal and household goods sector, home to luxury giants, rose by about 1.6%. This was due to LVMH's rise of 2.8% after announcing that its first-quarter organic revenue growth met expectations and demand for fashion and leather goods in the Chinese market increased by 10%. This led to Hermes rising by 2.3% and Richemont rising by nearly 3%. The technology sector, however, plummeted by 3.4%, with ASML, the highest-valued technology stock listed in Europe, closing down by 6.7%. Among other individual stocks that announced earnings, Adidas closed up by more than 8.6% after announcing first-quarter revenue higher than expected and raising its full-year guidance due to strong demand for sports shoes, supporting the rebound in German stocks. Continental, a supplier of tires and other transportation industry components, fell by 5.5% after its first-quarter revenue and profit margins were below expectations. Just Eat Takeaway, an online food ordering and delivery company, fell by 4.5% after its first-quarter orders were below expectations.
U.S. Treasury prices rebounded, and the ten-year yield fell by more than 10 basis points from a five-month high during the session.
The U.S. 10-year benchmark Treasury yield rose above 4.68% in the Asian morning session to set a daily high, then accelerated its decline from before the U.S. stock market opened, breaking below 4.60% during the U.S. stock market lunch break. After the completion of the 20-year U.S. Treasury auction, it broke below 4.58% during the lunch break to set a daily low, falling by more than 9 basis points during the day. It retreated by about 12 basis points from the high of 4.70% tested on Tuesday, which was the highest since November 13, 2023, and was about 4.59% at the end of the bond market, falling by nearly 8 basis points during the day, marking the second decline in the last six trading days.
The 2-year U.S. Treasury yield, which is more sensitive to interest rate prospects, once approached 5.0% before the European stock market session to set a daily high, and once broke below 4.92% during the U.S. stock market lunch break to set a daily low, falling by more than 7 basis points during the day. It detached from the high of 5.0% tested on Tuesday, which was the highest since November 14, 2023. At the end of the bond market, it was about 4.93%, falling by nearly 6 basis points during the day, also retreating after two consecutive days of rises.
The U.S. dollar index fell from a five-month high, and the yen temporarily left its low since 1990, while Bitcoin fell by nearly $5,000 during the session.
The ICE U.S. Dollar Index (DXY), which tracks the basket of exchange rates of the U.S. dollar against the euro and five other major currencies, once broke above 106.40 before the European stock market session, approaching the high of 106.50 broken on Tuesday, which was the highest since November 1, 2023, and was up by nearly 0.2% during the day. After the release of the UK CPI, it turned down, and it briefly turned up during the European stock market morning session, before the U.S. stock market, and the morning session, then accelerated its decline during the U.S. stock market lunch break, breaking below 105.90 at its daily low, falling by nearly 0.4% during the day.
By the close of the U.S. stock market on Wednesday, the U.S. dollar index was slightly below 106.00, down by 0.3% during the day; the Bloomberg U.S. Dollar Spot Index, which tracks the exchange rates of the U.S. dollar against ten other currencies, fell by more than 0.3% during the day, detaching from the high of the same period since November 2023, which was refreshed for four consecutive days, and both the U.S. dollar index and the Bloomberg U.S. Dollar Spot Index fell after five consecutive days of rises.
Among non-U.S. currencies, the yen temporarily left its low since 1990, with the U.S. dollar against the yen once breaking below 154.20 during the U.S. stock market lunch break to set a daily low, falling by nearly 0.4% during the day, and falling from the high of 154.80 approached on Tuesday, which was the highest since 1990 for four consecutive days. The British pound against the U.S. dollar once broke above 1.2480 during the European stock market morning session to set a daily high, rising by nearly 0.5% during the day, detaching from the low of 1.2410 broken after Powell's speech on Tuesday, which was the lowest since November 17, 2023.Offshore Renminbi (CNH) against the US dollar refreshed its daily low to 7.2685 in the early Asian market, then fluctuated and rebounded, rising to 7.2425 after the US stock market closed, reaching a high not seen since April 10, rebounding 260 points from the daily low, and moving away from the low of 7.28 broken on Tuesday, which was the lowest since November 13, 2023. At 4:59 AM Beijing time on April 18, the offshore Renminbi against the US dollar was reported at 7.2440 yuan, up 204 points from the New York close on Tuesday, rebounding after the retreat on Tuesday.
Bitcoin (BTC) was above 64,000 US dollars before the European stock market, refreshing its daily high, with some platforms trading prices breaking through 64,500 US dollars, then continued to decline, accelerated the decline after the US stock market opened, and once fell below 59,800 US dollars at noon, breaking through 60,000 US dollars for the first time since March 5, falling more than 4,700 US dollars from the daily high, a drop of more than 7%, then rose back to 61,000 US dollars, narrowing the decline, once broke through 61,400 US dollars, and was above 61,000 US dollars at the close of the US stock market, falling more than 2% in the last 24 hours.
Crude oil fell by more than 3%, the largest drop in three months, and fell for three consecutive days to a three-week low.
International crude oil futures were basically in a downtrend, only turning up in the short term in the early Asian market, accelerated the decline after the US stock market opened, and when the US WTI crude oil broke 82.60 US dollars at noon, it fell 3.3% during the day, and Brent crude oil broke 87.20 US dollars, falling 3.2% during the day.
In the end, crude oil fell for three consecutive days, creating the largest daily drop since January 8 when Saudi Arabia unexpectedly lowered the official crude oil prices sold to Asia. WTI May crude oil futures fell 2.67 US dollars, nearly 3.13%, closing at 82.69 US dollars per barrel, refreshing the closing low since March 27; Brent June crude oil futures fell 2.73 US dollars, about 3.03%, closing at 87.29 US dollars per barrel, also refreshing the low for three weeks.
LME tin and copper rebounded to a two-year high, and gold fell from the closing record high for four consecutive days.
London base metal futures generally rose on Wednesday. Leading the rise, LME tin rose 3%, erasing the previous two days' decline, and once again reached a high not seen since June 2022 after last Friday. LME nickel, which fell back to a more than one-week low on Tuesday, rose nearly 3%, rebounding to a one-week high. LME zinc, which fell for two consecutive days, rose more than 2%, refreshing the high set last Friday since April last year. LME copper, which fell back on Tuesday, rose more than 1%, refreshing the high set on Monday since June 2022. LME aluminum rose about 1%, rising for four consecutive days, and setting a new high for three consecutive days since February last year. LME lead rebounded slightly and did not continue to fall away from the high set on Monday since November last year.
New York gold futures were mostly in a downtrend on Wednesday, briefly turning up before and during the European stock market and early US stock market, and refreshed the daily low to 2,376.5 US dollars at noon, falling 1.3% during the day, failing to approach the intraday historical high of nearly 2,450 US dollars set last Friday.
Spot gold once rose above 2,395 US dollars in the early US stock market, refreshing the daily high, then continued to decline and turned down, once fell below 2,362 US dollars during the US stock market, refreshing the low since Monday, April 15, falling more than 0.9% during the day, more than 1.4% from the daily high, and fell away from the intraday historical high of breaking 2,430 US dollars set last Friday.
By the close, COMEX June gold futures, which had risen for four consecutive trading days, fell 0.81%, closing at 2,388.4 US dollars per ounce, falling from the closing high record of 2,407.8 US dollars set on Tuesday for the fourth consecutive day. At the close of the US stock market, spot gold was slightly above 2,370 US dollars, falling about 0.4% during the day, and for the first time since last Thursday, it did not refresh the highest record for the same period.
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