On Monday, the US stock market was closed for President's Day. On Tuesday local time, the US stock market continued its previous downward trend on the first trading day of the week, with all three major US stock indexes closing lower and the Nasdaq closing at a two-week low.
Since the beginning of this year, technology stocks, the main drivers of the US stock market, have taken the lead in a decline. At one point in the day, "AI selling shovel people" NVIDIA fell more than 6%, closing down 4.35%, and its stock price returned to below $700. However, even after experiencing Tuesday's sharp decline, Nvidia's growth rate so far this year is still as high as 40%. On Thursday morning Beijing time, Nvidia will release its latest financial report, and the market is waiting for Nvidia's latest financial report to meet investors' high expectations for the AI boom.
The Nasdaq fell nearly 1%
Energy and chip stocks have shown weak performance
On Tuesday local time, all three major US stock indices closed lower. As of the close, the Dow Jones Industrial Average fell 0.17% to 38563.8 points, the S&P 500 Index fell 0.6% to 4975.51 points, and the Nasdaq fell 0.92% to 15630.78 points.
On the market, most star technology stocks fell, with Apple falling 0.41%, Amazon falling 1.43%, Netflix falling 1.51%, Google rising 0.43%, Facebook falling 0.33%, and Microsoft falling 0.31%. Chip stocks adjusted across the board, with the Philadelphia Semiconductor Index closing down 1.56%; Chaowei Semiconductor fell 4.7%, Asma fell 2.09%, Broadcom fell 1.52%, TSMC fell 1.04%, and Qualcomm fell 0.48%. AI seller Nvidia fell more than 6% during trading, closing down 4.35% at $694.52 per share. On Tuesday, the stock market value of the company shrank by $78 billion, marking the largest single day market value drop on record.
Intel rose 2.32% against the trend. On the news front, the Biden administration in the United States is currently negotiating to provide Intel with over $10 billion in subsidies, and negotiations are ongoing. It is reported that subsidies for Intel may include loans and direct grants.
Popular Chinese concept stocks generally fell, with the Nasdaq China Golden Dragon Index down 1.33%, Nenglian Zhidian down 12.09%, Douyu down 8.29%, Dingdong Maicai down 7.2%, Zaiding Pharmaceutical down 6.78%, Jianan Technology down 6.52%, Shengmei Semiconductor down 6.33%, Youdao down 5.95%, Jinshan Cloud down 5.34%, Shuodi Biotechnology down 5.31%, and Futu Holdings down 4.83%.
Before the release of heavyweight financial reports
Nvidia's stock price plummeted significantly
NVIDIA, a super heavyweight stock scheduled to release its financial report early Thursday Beijing time, significantly dragged down the performance of the S&P and Nasdaq on Tuesday, with the stock falling nearly 7% during the day. Currently, the market generally expects Nvidia's fourth quarter revenue to reach $20.37 billion, compared to $6.05 billion in the same period last year. This means that Nvidia's fourth quarter revenue will be more than three times that of the same period last year.
Since the beginning of this year, Nvidia's stock price has risen by over 40%. Last week, its market value surpassed Amazon and Google, second only to Microsoft and Apple. The market is currently waiting for Nvidia's latest financial report to meet investors' high expectations for the AI boom. After experiencing Tuesday's decline, Nvidia's market value was overtaken by Amazon and Google.
Some market analysis suggests that even if Nvidia can deliver slightly stronger than expected financial reports, it will not be worthy of its excessively high valuation. Previously, Nomura analysts had warned that if Nvidia's financial report explodes or US inflation reignites, it could potentially end this round of gains in US stocks.
Bank of America analyst Vivek Arya said that given investors' previous "blind pursuit of artificial intelligence," he believes that it is not surprising that Nvidia's stock price experienced a "significant but brief pullback" after the financial report was released. Arya believes that the pullback in the stock may exceed 10%.
In fact, since the beginning of the year, the S&P information technology sector has clearly strengthened, with Meta and Amazon accumulating gains of about 33% and 10% respectively. But some people believe that in this financial reporting season, the performance of many technology companies has not yet matched the increase in their stock prices. Moreover, from a trading perspective, some Wall Street analysts believe that this year's AI craze continues to ferment, and call options are currently heavily betting on AI concept stocks such as Nvidia. Once Nvidia releases its financial report, the implied volatility of the entire options market may decrease, and the call option prices of Nvidia related stocks may fall, leading to a correction in the overall market. Whether Nvidia's financial report is good or bad, it will end the rise of the US stock market.
The path for the Federal Reserve to cut interest rates in 2024 is uncertain
In addition to traders' concerns about Nvidia's performance, there has been a pessimistic view this week that the probability of further interest rate hikes by the Federal Reserve may not be zero, which has also dampened the trend of technology growth stocks. Last Friday, former US Treasury Secretary Lawrence Summers said, "The possibility of the Federal Reserve raising interest rates next still exists, with a probability of 15%."
Last week, the slowdown rate of CPI and PPI announced by the United States was lower than the market expectation. In addition, the growth rate of non farm employment at the beginning of the month was far higher than Wall Street's expectation, which led to a significant increase in the yield of US treasury bond bonds, among which the yield of two-year, three-year and five-year US bonds reached the highest level since the beginning of December last year. Subsequently, the market postponed its expectation of interest rate cuts, and it is currently expected that the Federal Reserve will cut interest rates for the first time in June.
Swiss economist Sophie Altermat said that the market will closely monitor the minutes of the upcoming meeting of the Federal Open Market Committee (FOMC) to obtain more clues about the timing of the Federal Reserve's interest rate cut, and will also pay attention to the Purchasing Managers Index (PMI) quick report to find signs of further economic improvement. The macroeconomic situation is generally weak this week. Among them, the market will closely monitor the initial value of the PMI index to look for signs of further improvement in economic activity and sustained easing of price pressures in major global economies. In addition, the Eurozone Consumer Confidence Index and the German IFO Business Climate Index will further reveal the health status of European consumers and businesses.
Lindsay Rosner, head of cross asset fixed income investment at Goldman Sachs Asset Management, said, "The final stage of the fight against inflation is bumpy, it's a bit like a table tennis game." Each set of data will make the market react, and correspondingly, economic data will also respond to the market's response.
The United Nations Security Council resolution on Gaza has been vetoed by the United States once again
According to CCTV News, on February 20th local time, the United Nations Security Council voted on a new draft resolution proposed by Algeria on the situation in Gaza, which was vetoed by the permanent member of the United States. In the vote, 13 countries voted in favor, Britain abstained, and the United States vetoed.
The draft resolution proposed by Algeria calls for the immediate implementation of a humanitarian ceasefire that all parties must abide by, opposes the practice of forcing the displacement of Palestinian civilians, including women and children, in violation of international law, calls for the immediate cessation of all such violations, demands the immediate and unconditional release of all hostages, ensures humanitarian access to meet the medical needs of all hostages, and demands that all parties comply with their obligations under international law related to all those they detain and respect their human rights. In addition, the draft resolution calls for the release of hostages and mentions that South Africa has filed a lawsuit against Israel in the International Court of Justice, emphasizing the need to hold accountable for all violations of international law.
Many countries regret that the Security Council has once again been unable to pass resolutions related to Gaza due to the United States veto.
Israel's intensive bombing of the central and southern parts of the Gaza Strip
At least 51 deaths
According to a report by Palestinian television on the 20th local time cited by CCTV News, the Israeli army heavily bombed multiple areas in the central and southern Gaza Strip on the same day, resulting in at least 51 deaths.
According to reports, on the 20th, the Israeli army launched airstrikes on the Nusairait refugee camp in central Gaza and multiple residential areas in Der Bairah, resulting in at least 29 deaths and dozens of injuries. The Israeli army continued to bomb the southern city of Khan Younis in the Gaza Strip on the same day, resulting in 20 deaths so far. In addition, a car in the southern city of Rafah in the Gaza Strip was attacked by Israeli forces on the same day, resulting in at least 2 deaths.
According to data released by the Palestinian Gaza Strip health department on the 20th, the Israeli military's attacks on the Gaza Strip in the past 24 hours have resulted in 103 deaths and 142 injuries. Since the outbreak of a new round of Palestinian Israeli conflict on October 7th last year, Israel's military actions in the Gaza Strip have resulted in over 29100 deaths and over 69000 injuries.
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