Earnings report is impressive, technology stocks are strong, SPDR S&P 500 hits a new high again, Netflix rises more than 10%, AMD rises nearly 6%, and Chinese concept stocks outperform the market.

Netflix kicked off the earnings season for tech giants on a positive note, with tech stocks boosting the US stock market and the SPDR S&P 500 continuing its streak of hitting new all-time highs. However, 3M, which experienced a sharp drop after disappointing earnings guidance on Tuesday, continued to weigh down the Dow Jones Industrial Average, preventing it from successfully rebounding and causing it to decline during trading.

Streaming giant Netflix set a new record for quarterly subscriber growth in the fourth quarter, with revenue and performance guidance exceeding expectations. Its stock price surged more than 10% at the opening bell, marking the first double-digit increase in three months. ASML, the largest tech company in Europe and a Dutch lithography machine giant, also delivered good news, with its fourth-quarter orders reaching a new quarterly high and profits surpassing expectations. The company expects a 30% increase in full-year revenue in 2023. The US chip stock index is poised to continue hitting new closing highs, with both AI chip giants NVIDIA and AMD reaching new all-time highs. On the other hand, Tesla's after-hours announcement of lower-than-expected fourth-quarter revenue and a warning of slower sales in 2024, with delivery growth lower than in 2023, caused its stock price to accelerate its decline after hours.

The unexpected reserve requirement ratio cut by the People's Bank of China, combined with "targeted interest rate cuts," has led to continued strong performance of Chinese assets. Chinese concept stocks listed in the US have outperformed the broader market, and both onshore and offshore renminbi have risen above 7.15 during trading. Ming Ming, Chief Economist at CITIC SEC, stated that the timing and scale of the reserve requirement ratio cut exceeded market expectations. It is expected that the liquidity environment will further improve. Under the guidance of the central bank's "strengthening countercyclical and cross-cycle adjustments," this reserve requirement ratio cut may not be the last total operation in this round of loose monetary policy.

The initial release of the US January Markit PMI exceeded expectations and climbed, with the manufacturing PMI reaching a new high since October 2022. The positive economic news has dampened expectations of interest rate cuts. After the PMI data was released, US Treasury prices fell and yields rose. The yield on the benchmark 10-year US Treasury bond erased its intraday decline and rose back above 4.10%, temporarily rebounding by about 10 basis points from the daily low, approaching the high near the Federal Reserve's December meeting.

The market expects a further decline in the probability of a rate cut by the Federal Reserve in March and the total magnitude of rate cuts this year.

In the foreign exchange market, the market's confidence in the end of negative interest rates in Japan in April was strengthened after the speech by the Governor of the Bank of Japan, leading to a rebound in the yen, which rose more than 1% during trading. The UK's January PMI exceeded expectations, with the services PMI unexpectedly rebounding. Investors further reduced their expectations for interest rate cuts by the Bank of England this year, causing the pound to rebound to a more than one-week high. The eurozone market, which is often linked to news from the Chinese market, saw gains in stocks, bonds, and currencies. Asian and European major currencies collectively exerted pressure, causing the US dollar index to fall from its six-week high set on Tuesday. The decline narrowed after the release of the US PMI data, and the gains in non-US currencies also narrowed accordingly. The Bank of Canada remains unchanged, implying that the rate hike has been completed, and the Canadian dollar has turned down during the day. Cryptocurrencies rebounded, with Bitcoin recovering to $40,000 after several days of significant intraday declines, bidding farewell to the seven-week low created after falling below this level on Tuesday.

Market expectations for the Bank of England's hawkish stance have increased, while expectations for interest rate cuts have decreased, and the probability of interest rate cuts by the European Central Bank and the Federal Reserve has begun to converge.

In the commodity market, the Chinese economic stimulus has supported the continued rise of base metals such as copper; after the release of the US PMI, gold continued to give up its intraday gains and turned down; international crude oil rebounded, with Brent crude recovering the $80 level that it fell below on Tuesday, approaching the high of nearly a month created on Monday. China's reserve requirement ratio cut and the US Energy Information Administration's announcement of a larger-than-expected 9.2 million barrel decline in US crude oil inventories have both supported higher oil prices. The weather forecast shows that the weather in the United States will turn cold again, and natural gas prices in the United States are accelerating, moving away from the lows of the past month caused by the weather forecast of a rebound in average temperatures in the United States.

The S&P 500 has hit a new all-time high for four consecutive days, with Nvidia, AMD, Microsoft, Meta, and Google all hitting new all-time highs. Tesla's stock plummeted after its earnings report.

The three major US stock indices opened higher and maintained their gains in early trading. The Dow Jones Industrial Average rose nearly 160 points, or over 0.4%, when it hit a midday high, but then gave up its gains and turned down, hitting a daily low at the end of the session. At midday, the SPDR S&P 500 Index rose 0.8%, hitting a new intraday high for the fourth consecutive trading day. The Nasdaq Composite Index, which had risen more than 1% in early trading, rose 1.3%, gradually giving up more than half of its gains.

In the end, the three major indices failed to close higher collectively. The Dow fell 99.06 points, or 0.26%, to 37,806.39, marking a second consecutive day of decline and further distancing itself from the closing record high set on Monday. The Nasdaq rose 0.36% to 15,481.92, marking a fourth consecutive day of closing at a high since January 4, 2022. The S&P 500 rose 0.08% to 4,868.55, setting a new closing high for the fourth consecutive day, along with the Nasdaq, both rising for four consecutive days.

The Nasdaq 100 Index, which is dominated by technology stocks, rose more than 1% during the day, closing up 0.55%. The Nasdaq Technology Market Cap Weighted Index (NDXTMC), which measures the performance of technology stocks in the Nasdaq 100 Index, rose more than 2% at midday and closed up 1.17%, both setting new closing highs for five consecutive trading days. The Russell 2000, which is mainly composed of value stocks, opened higher but fell during midday trading, closing down 0.73%, continuing to move away from the closing high set on January 8 after rebounding.

Most major US stock indices closed higher, but retreated during midday trading, with the Dow erasing its gains and turning down, and small-cap stock indices opening higher but falling during midday trading. In the Dow Jones Industrial Average, 3M, which fell 11% after its earnings report on Tuesday, continued to decline by about 3%. Verizon, which rose nearly 7% after its earnings report on Tuesday, fell more than 2%. Procter & Gamble, which rose more than 4% after its earnings report on Tuesday, also retreated, falling more than 1%. After several US airlines announced that they are considering halting the purchase of Boeing aircraft, Boeing initially fell 1% but later rebounded and closed up more than 1%.

Among the major sectors of the SPDR S&P 500, only four closed higher on Wednesday. Energy led the way with a 1.4% increase, driven by a rebound in oil prices. Communication services, including Meta and Netflix, also rose more than 1%. IT, which includes Microsoft and chip stocks, rose nearly 0.8%, while finance rose nearly 0.5%. The seven sectors that closed lower all fell more than 1%, including materials, real estate, utilities, and consumer staples.

Overall, chip stocks outperformed the market. The Philadelphia Semiconductor Index and the semiconductor industry ETF SOXX rose about 2.8% at midday and closed up about 1.5%, marking five consecutive trading days of gains and four consecutive days of closing at record highs. Among individual stocks, AMD rose more than 7.2% at midday after being upgraded to a buy rating by New Street Research, which is optimistic about its data center AI chip business. It closed up about 5.9%, setting a new intraday high and surpassing the closing high set last Friday. Nvidia rose nearly 5% at midday, also reaching a new intraday high, and closed up about 2.5%, setting a new closing high for five consecutive trading days. However, Texas Instruments, which reported lower-than-expected revenue and EPS guidance for the first quarter, fell more than 2%.

Leading technology stocks rose at the opening but later turned lower. Tesla, which denied plans to launch a $25,000 entry-level car in 2025 and will release its fourth-quarter earnings report after the market closes on Wednesday, initially rose 1.7% but later fell, closing down 0.6%. It failed to break away from the closing low since November 1st, which was set after a decline on Monday. After the earnings report was released, the stock price fell further, dropping more than 5% after hours.

Among the FAANMG six major technology stocks, Netflix, which released its earnings report after the market closed on Tuesday, initially rose more than 10% and reached a peak increase of over 14% in early trading. It closed up 10.7%, marking the largest increase since October 19, 2023. Microsoft rose more than 1% at the opening, surpassing a market value of $3 trillion, and closed up 0.9%, returning to a market value below $3 trillion. Meta, the parent company of Facebook, initially rose more than 2% and closed up 1.4%, both setting new closing highs for two consecutive days along with Microsoft. Alphabet, the parent company of Google, closed up 1.1%, marking two consecutive days of gains and a new closing high. Amazon closed up 0.5%, setting a new closing high for two consecutive days since April 2022. Apple, which rose for four consecutive days, fluctuated during the day and closed down nearly 0.4%, falling from the closing high set two days ago on December 19th.

Microsoft, Nvidia, Tesla, and other seven major technology stocks rose overall at the opening and partially gave back their gains at midday.

Tech stocks related to AI concepts have yet to rise across the board. Super Micro Computer (SMCI) rose more than 8% intraday and closed up 2.8%, hitting a new closing high for the fourth consecutive day. Adobe (ADBE) rose more than 1%, while C3.ai (AI) fell 3.7%, BigBear.ai (BBAI) fell 4.9%, Palantir (PLTR) fell more than 3%, and SoundHound.ai (SOUN) fell 1%.

Popular Chinese concept stocks continued to rise, outperforming the overall market for two consecutive days. The Nasdaq Golden Dragon China Index (HXC), which rose 4.8% on Tuesday, initially rose 3.8% and closed up about 1.9%, reaching a high since January 12th. Chinese concept ETFs KWEB and CQQQ rose about 2.9% and 2.1% respectively. Among individual stocks, at the close, Douyu rose nearly 7%, New Oriental rose nearly 6%, TAL Education rose nearly 4%, Baidu rose more than 3%, Pinduoduo and NetEase rose more than 2%, Alibaba, JD.com, Tencent Music, Dada, and Gaotu Education rose more than 1%. However, the three new energy vehicle companies all fell, with XPeng Motors falling more than 5%, NIO, which rose more than 6% at the beginning of the session, falling more than 2%, and Li Auto falling more than 1%. In addition, Bilibili fell 0.4%.

Banking stocks rose across the board, outperforming the overall market. The KBW Bank Index (BKX), which closed roughly flat on Tuesday, rose 0.9%, reaching a high since January 10th. The KBW Nasdaq Regional Banking Index (KRX) rose nearly 0.7%, approaching the high since January 2nd set on Monday, and the SPDR S&P Regional Banking ETF (KRE) rose nearly 1.2%, rebounding to a high since January 2nd.

Among the stocks that announced their earnings reports, telecommunications operator AT&T (T), whose fourth-quarter EPS earnings and 2024 earnings guidance were lower than expected, fell about 3%; personal care product manufacturer Kimberly-Clark (KMB), whose fourth-quarter earnings and revenue were lower than expected, fell 5.5%; healthcare company Abbott Laboratories (ABT), whose fourth-quarter EPS earnings met expectations but projected full-year earnings were lower than expected, fell 2.8%. In addition, chemical giant DuPont (DD), which pre-announced fourth-quarter revenue and EPS earnings lower than expected, fell 14%.

European stocks also received support from tech stocks, rebounding strongly on Tuesday after a retreat. The STOXX Europe 600 Index rose more than 1%, marking the largest closing gain in three months and reaching a high since January 9th. The blue-chip Euro Stoxx 50 Index rose more than 2%, reaching a new closing high since May 2001. Major European country indices rose across the board, erasing the losses from Tuesday's decline, and the Italian stock index rebounded after three consecutive days of decline.

In various sectors, the tech sector led the gains, rising more than 4.9%, thanks to the 9.7% rise in ASML, listed in the Netherlands, which hit a new closing high. ASML also rose 11% intraday on the US stock market. German software giant SAP rose 7.6% after announcing that its 2023 operating profit would exceed expectations and announcing a restructuring plan for 2024 that would affect 8,000 positions. The mining stocks in the sector benefiting from the stimulus of the Chinese economy rose by about 2%. Among other individual stocks, luxury goods giant LVMH, Kaiyun, and Lifeng, which have a heavy focus on the Chinese market, rose by 1.1% to 1.9%; Siemens Energy, which announced preliminary estimates of first-quarter revenue higher than expected, rose by 9.3%.

After the announcement of the US PMI, US bond yields rebounded, with the 10-year yield rising by 10 basis points at one point.

European government bond prices were mixed, with the UK PMI hitting expectations of a rate cut by the central bank, causing UK government bond prices to continue to decline and yields to rise, while yields on eurozone government bonds fell slightly. At the end of the bond market, the yield on the UK 10-year benchmark government bond closed at 4.01%, up about 2 basis points during the day, and rose to 4.04% in early European trading, hitting a high since December 11; the yield on the 2-year UK government bond closed at 4.39%, up about 4 basis points during the day, and rose to 4.44% after the opening of European stocks, hitting a high since December 13; the yield on the 10-year benchmark German government bond closed at 2.34%, down about 1 basis point during the day, temporarily leaving the near seven-week high set on Tuesday; the yield on the 2-year German government bond closed at 2.70%, unchanged from Tuesday's level, and moved away from the intraday high set on December 1.

The yield on the 10-year benchmark US government bond fell below 4.09% before the US stock market opened, hitting a daily low, falling more than 4 basis points during the day. After the release of the January PMI, it continued to rise, and the US stock market erased its decline and turned higher in early trading. It broke through 4.18% at noon, hitting a daily high, rising nearly 6 basis points during the day, rebounding about 10 basis points from the daily low, approaching the high since the first day of the Fed's interest rate meeting on December 13, which was close to the 4.20% high set on Friday. At the end of the bond market, it was about 4.18%, up more than 5 basis points during the day, rebounding after two consecutive days of decline.

The yield on the 2-year US government bond, which is more sensitive to interest rate prospects, fell below 4.29% before the release of the US PMI, hitting a daily low, falling about 8 basis points during the day. After the PMI was released, it quickly rose above 4.30%, and the US stock market broke through 4.38% at noon, rising nearly 2 basis points during the day, rebounding about 10 basis points from the daily low, and still far from the high of 4.42% set on January 5. At the end of the bond market, it was about 4.38%, up more than 1 basis point during the day, rising for three consecutive days.

The US dollar index fell from a six-week high, the yen rose more than 1% during the day, the Canadian dollar turned lower after the central bank meeting, and the renminbi rose above 7.15 during the day. The ICE Dollar Index (DXY), which tracks the exchange rate of the US dollar against six major currencies including the euro, continued to decline throughout Wednesday. Before the US stock market opened, it fell below 102.80, hitting a new daily low, and dropped more than 0.8% during the day. After the US stock market opened, it gradually erased about half of its losses.

By the end of Wednesday's US stock market trading session, the dollar index was below 103.30, down nearly 0.4% during the day. The Bloomberg Dollar Spot Index, which tracks the US dollar against ten other currencies, fell 0.2%, both indices falling after a two-day rebound.

The Bloomberg Dollar Spot Index narrowed its decline after the release of the US PMI in the morning session.

Among non-US currencies, the yen rebounded strongly the day after the Bank of Japan announced its decision. Before the US stock market opened, the USD/JPY fell below 146.70, hitting a low not seen since last Tuesday, and dropped 1.1% during the day. However, the decline narrowed, and by the end of the US stock market session, it was above 147.60, down about 0.5% during the day. After the release of the UK PMI in January, the GBP/USD rose above 1.2770 during the European stock market session, not only erasing the losses from Tuesday, but also hitting a high not seen since January 12, with an increase of about 0.7% during the day. The EUR/USD rose above 1.0930 before the US stock market opened, with an increase of over 0.7% during the day. After the Bank of Canada announced its decision at the beginning of the US stock market session, the Canadian dollar quickly turned lower, and the USD/CAD rose above 1.3470, surpassing 1.3500 during the US stock market session, and by the end of the session, it was above 1.3520, up about 0.5% during the day.

Before the US stock market opened, the onshore Chinese yuan (CNY) rose above 7.15, and at the beginning of the US stock market session, it rose to 7.1440, hitting a new intraday high since January 5, with an increase of 278 points during the day. At 03:00 on January 25th Beijing time, the onshore yuan against the US dollar closed at 7.1580, up 130 points from the overnight closing on Tuesday.

In the early Asian session, the offshore Chinese yuan (CNH) hit a new daily low of 7.1798, and after a brief rise in the European session, it continued to rise. Before the US stock market opened, it rose to 7.1415, with an increase of 259 points during the day, hitting a new intraday high since January 5. However, the increase narrowed, and the offshore yuan fell below 7.15 and 7.16 during the early US stock market session. At 5:59 on January 25th Beijing time, the offshore yuan against the US dollar was reported at 7.1623, up 51 points from the New York closing on Tuesday, rising for four consecutive trading days.

Bitcoin (BTC), which has fallen more than $1,000 in recent trading sessions, rebounded and regained the $40,000 mark before the European stock market opened. During the European stock market session, it rose above $40,500, surpassing the intraday low in the Asian session by more than $900, an increase of more than 2%. It rebounded from the intraday low that fell below $39,500 on Tuesday, which was the lowest level since December 3. However, it fell back to $40,000 at the end of the session, and by the end of the US stock market session, it was around $39,700, up more than 1% in the past 24 hours. It is still far from the high of $49,000 reached on the first day of the listing of the Bitcoin spot ETF on January 11. Bitcoin rebounded above $40,000 during the day, but failed to hold this level.

Crude oil rebounded and approached a four-week high. Brent crude oil recovered $80, while US natural gas rose nearly 8%.

International crude oil futures rose overall on Wednesday, but fell during the Asian and European stock market sessions. When European stocks hit a daily low, US WTI crude oil fell below $74, down nearly 0.6% for the day, and Brent crude oil fell to $78.6, down 1.2% for the day. After the rebound, it did not fall again. When US stocks hit a daily high in early trading, US oil rose above $75.80, up nearly 2% for the day, and Brent oil rose above $80.3, up nearly 1% for the day.

WTI March crude oil futures closed up 0.97% at $75.09 per barrel, while Brent March crude oil futures closed up 0.61% at $80.04 per barrel. After Monday, they closed above the $80 mark again, approaching the closing high since December 26 set on Monday.

US gasoline and natural gas futures continued to fluctuate. The EIA announced that gasoline inventories last week exceeded expectations. NYMEX February gasoline futures fell 0.03% to $2.2095 per gallon, continuing to fall from the high set on November 29, which rose nearly 3.5% on Monday. NYMEX February natural gas futures rose 7.79% to $2.6410 per million British thermal units, rising for two consecutive days, far from the low of $2.42 set on December 20.

London base metal futures continued to rise on Wednesday. London zinc and London nickel rose more than 2%, while London aluminum and London copper rose for two consecutive days. London zinc reached a three-week high, while London nickel and London copper reached new highs since the end of December, and London aluminum reached a two-week high. London tin, which rose for three consecutive days and reached a five-month high, fell slightly, temporarily leaving the high of the past two months.

New York gold futures hit a daily high of $2037.9 during the European stock market session, up about 0.6% for the day, and then continued to decline. US stocks turned down in early trading, falling to a daily low of $2011.7, down about 0.7% for the day.

Finally, COMEX February gold futures closed down 0.48% at $2016 per ounce, erasing the gains from Tuesday's rebound. It closed down for the second day of the week and began to fall towards the closing low since December 13, which was set last Wednesday. Spot gold briefly rose to $2,036.70 before the US stock market opened, hitting a daily high. It rose 0.4% during the day. However, US stocks turned lower in early trading, with gold falling nearly 0.9% to approach $2,011 at midday.

Spot gold falls below the 50-day moving average.