Economic data also dampened expectations of interest rate cuts, leading to consecutive declines in US stocks and bonds. The Nasdaq and S&P 500 both fell more than 1% during trading, while Chinese concept stocks underperformed the broader market.

The data released on Wednesday showed that the US economy was stronger than expected: retail sales in December increased by 0.6% MoM, the largest increase in three months; industrial production in December increased by 0.1% MoM, slowing down from 0.2% in November, but not as stagnant as analysts expected. Following the statement by Federal Reserve Board member Waller on Tuesday that there is no rush to cut interest rates, the data further dampened market expectations of a recent rate cut by the Federal Reserve.

Good news for the economy has become bad news for the market. After the data was released, swap contracts showed that investors' probability of the Federal Reserve cutting interest rates as early as March dropped from about 80% last Friday to about 50%. US stocks and US bond prices fell further. The yield on the benchmark 10-year US Treasury bond rose above 4.10%, continuing to hit a high not seen since the Federal Reserve's interest rate meeting a month ago. The yield on the two-year US Treasury bond, which is sensitive to interest rates, rose more than 10 basis points for two consecutive days.

The market's probability of a 3-month rate cut by the Federal Reserve has dropped slightly above 50%, and the expected rate cut for the full year of 2024 has dropped to about 140 basis points.

Market expectations for interest rate cuts by the European Central Bank and the Bank of England this year have also cooled. The UK's CPI in December, announced on Wednesday, accelerated year-on-year for the first time in ten months, causing a sharp drop in UK bond prices, with the yield on the two-year UK bond soaring more than 20 basis points in a single day. European Central Bank officials' speeches continue to suppress expectations of interest rate cuts. ECB President Lagarde said that the ECB is expected to achieve its inflation target of 2%, but it has not yet been fully achieved. Klaas Knot, President of the Dutch Central Bank and a member of the ECB's Governing Council, said that market participants' expectations of monetary easing by the ECB are ahead of schedule.

In the foreign exchange market, after the release of US retail data, the US dollar index quickly expanded its gains and reached a new high in a month for two consecutive days. Various non-US currencies declined, and the yen further weakened, falling to a low since the end of November. The offshore renminbi lost the 7.23 level for the first time in two months, while the pound rebounded during the day, moving away from a one-month low. After the release of UK CPI, the market's probability of the Bank of England starting an interest rate cut before mid-May decreased.

In the commodity market, the market is concerned about Chinese data. Under the pressure of a stronger US dollar, various basic metals, including copper, fell together. International crude oil prices also fell by more than 2% at one point, but under the threat of the conflict in the Red Sea, the decline in oil prices continued to be suppressed, and US oil even turned higher during the day. In addition, the OPEC monthly report released on Wednesday predicts that global oil demand will remain relatively strong in 2024, and demand will continue to grow strongly in 2025; Fatih Birol, Executive Director of the International Energy Agency (IEA), said that despite the tense situation in the Middle East, the oil market will still be in a balanced supply and demand state this year; the rise in the US dollar and US bond yields continued to hit gold, with gold prices falling more than 1% for several consecutive days.

Real estate sector leads the decline in the S&P, chip stocks underperform the market, Nvidia and Microsoft fall from historical highs, Chinese concept stocks decline for three consecutive days

The three major U.S. stock indexes opened lower for two consecutive trading days. The S&P 500 index and the Nasdaq Composite index remained in a downward trend throughout the day, with the S&P falling nearly 1.1% at its lowest point during midday trading, and the Nasdaq falling more than 1% in early trading, with a decline of about 1.6% at its lowest point. The Dow Jones Industrial Average initially fell more than 170 points, but rebounded in the final moments of early trading, only to widen its decline during midday trading, falling nearly 230 points, or over 0.6%, at its lowest point.

The decline in the three major indexes narrowed in the final moments of trading, with two consecutive days of declines. The Dow fell 94.45 points, or 0.25%, to close at 37,266.67 points, marking three consecutive days of decline and two consecutive days of closing at a low since December 20th. The S&P fell 0.56% to close at 4,739.21 points, and the Nasdaq fell 0.59% to close at 14,855.62 points, both setting new closing lows since January 5th.

The technology-heavy Nasdaq 100 index fell more than 1% in early trading and closed down 0.56%, after roughly flatlining on Tuesday, falling from the high reached on December 28th after a six-day consecutive increase. The Nasdaq Technology Market Cap Weighted Index (NDXTMC), which measures the performance of technology stocks in the Nasdaq 100 index, also fell more than 1% in early trading and closed down 0.58%, after a seven-day consecutive increase and four consecutive days of closing at a new historical high. The small-cap Russell 2000 index, which is dominated by value stocks, fell 1.5% in early trading and closed down 0.73%, underperforming the market and setting a new closing low since December 12th after four consecutive days of decline and two consecutive days of closing at a low.

Major U.S. stock indexes continue to decline on Wednesday, with a narrowing decline in the final moments of trading.

Among the Dow component stocks, Caterpillar led the decline with a drop of about 3%, while Intel had the second largest decline. Boeing, which plummeted nearly 8% on Tuesday, rebounded and rose more than 2% in early trading, closing up 1.3%. All major sectors of the S&P 500 were hit hard, with the interest rate-sensitive real estate sector falling nearly 2.9% at midday and leading the decline with a close down of nearly 1.9%. Utilities fell 1.5%, and non-essential consumer goods, IT (where Tesla is located), and communication services (where Google is located) all fell more than 1% in early trading, but closed with less than a 1% decline.

Leading technology stocks fell more than 1% in early trading, but the decline narrowed later on. Tesla, which lowered prices in China and then lowered the price of the Model Y in the European market, fell more than 3% in early trading and closed down about 2%, erasing the small rebound on Tuesday and setting a new closing low since November 10th.

Among the six major FAANMG technology stocks, Alphabet, the parent company of Google, fell 2.5% in early trading and closed down 0.7%, marking two consecutive days of decline and closing at a low for the past week. After a comprehensive price reduction in Tmall's official flagship store and the iPhone 15 series dropping to a starting price of 4,999 yuan, Apple fell 1.8% in early trading and closed down 0.5%, marking two consecutive days of decline and closing at a low since January 5th. Microsoft, which had risen for six consecutive days, initially fell more than 1% and closed down 0.2%, deviating from the closing historical high set in the past four trading days. Amazon fell more than 1% in early trading and closed down nearly 1%, marking a three-day decline to a low point in the past week. Netflix fell more than 1% in early trading and closed down nearly 0.2%, continuing to move away from the closing high set in January 2022. Meta, the parent company of Facebook, fell more than 1% in early trading, but turned positive in the afternoon and closed up nearly 0.3%, failing to continue the decline from the closing high set in September 2021.

Chip stocks, which rebounded against the market on Tuesday, fell back and underperformed the broader market. The Philadelphia Semiconductor Index and the Semiconductor Industry ETF SOXX fell more than 2% in early trading and closed down about 0.9%, falling from the closing high set on December 29th. Among the IT component stocks of the S&P 500, Nvidia fell 2.9% in early trading, but the decline narrowed and fell less than 1% at noon, moving away from the intraday and closing historical highs set on Tuesday. At the close, Intel fell more than 2%, Qualcomm and Micron Technology fell more than 1%, Broadcom fell 1%, and AMD, which rose more than 8% on Tuesday, turned positive in the afternoon and closed up 0.9%.

Microsoft, Nvidia, and other seven major technology stocks continued to decline on Wednesday, roughly giving back all the gains since early 2024.

AI concept stocks continued to decline overall and underperformed the broader market for two consecutive days. At the close, C3.ai (AI) fell nearly 2.9%, SoundHound.ai (SOUN) fell nearly 1.7%, BigBear.ai (BBAI) fell nearly 3.8%, Palantir (PLTR) fell nearly 0.9%, and Adobe (ADBE) fell nearly 0.3%.

Popular Chinese concept stocks continued to decline and underperformed the broader market for two consecutive days. The Nasdaq Golden Dragon China Index (HXC) fell more than 3% in early trading and closed down 2.6%, marking a three-day decline and refreshing the low point since November 2022. The Chinese concept ETFs KWEB and CQQQ fell by about 2.6% and 2.9% respectively. The three new energy vehicle companies also continued to underperform the broader market. Xpeng Motors fell more than 8% in early trading and closed down 4.8%, NIO fell more than 6%, and Li Auto fell 3.8%. Among other individual stocks, Tusimple (TSP), which announced voluntary delisting from Nasdaq, fell nearly 60% in early trading and closed down 46%. At the close, JD.com fell nearly 5%, Baidu, Bilibili, and iQiyi fell more than 2%, NetEase, Tencent Music, and New Oriental fell more than 1%, Alibaba fell nearly 0.8%, Pinduoduo fell 0.7%, and Gaotu Education fell 0.6%.

Banking stocks continued to decline across the board. The overall banking industry index, the KBW Bank Index (BKX), closed down nearly 0.7%, marking a six-day decline and refreshing the closing low since December 13th. The KBW Nasdaq Regional Banking Index (KRX) and the SPDR S&P Regional Banking ETF (KRE) also fell. Both fell by about 0.6% and 0.4%, marking a four-day and three-day consecutive decline, hitting a new low since December 12th.

Among the major banks that released their earnings reports on Tuesday, JPMorgan Chase initially fell more than 2% and closed down 0.5% after a more than 4% decline. Goldman Sachs, which bucked the trend and closed up 0.7% on Tuesday, fell 0.9%. In other major banks, Citigroup and Bank of America fell by about 1% in early trading, JPMorgan Chase fell by over 0.5%, and Wells Fargo fell by 0.3%.

Among the stocks with significant volatility, Spirit Airlines (SAVE) fell 22.5% after a 47% decline on Tuesday, as a U.S. judge blocked its merger with JetBlue Airways due to antitrust concerns. JetBlue Airways (JBLU) fell 8.7%. Rivian (RIVN), a competitor of Tesla, initially fell nearly 8% and closed down nearly 6% after Deutsche Bank downgraded its rating to hold, expecting it to take longer than expected to improve its gross margin. Ford Motor Company (F), which was downgraded to neutral by UBS, initially fell over 3% and closed down 1.7%. Sinclair (SBGI), the broadcasting group that reached a settlement with Diamond Sports Group and paid $495 million, rose 17.8%. Instacart (CART), known as the "American version of Meituan", rose 7.5% after being upgraded to overweight by Wolfe Research, which believes it has multiple ways to achieve strong revenue growth. Spirit AeroSystems (SPR), the largest supplier of Boeing, rebounded along with Boeing, closing up 3.7% after a more than 4% decline on Tuesday.

In Europe, comments from ECB officials such as Lagarde continued to dampen expectations of interest rate cuts, and the pan-European stock index fell for the third consecutive day, accelerating its decline on Wednesday. The STOXX Europe 600 index recorded its largest closing decline since October 20, 2023, hitting a new low since December 5th. Major European stock indexes all fell, with German, French, British, and Spanish stocks all falling for three consecutive days, with declines exceeding 1%. The Italian stock index, which had a slight rebound on Tuesday, fell back.

In terms of sectors, the basic resources sector, which was affected by the decline in copper and gold prices, led the decline with a 2.1% drop, followed by a nearly 2% decline in the automotive sector, and a more than 1.7% decline in the personal and household goods sector, which includes luxury goods stocks. In terms of individual stocks, LVMH, Kering, and L'Oréal, luxury goods giants heavily reliant on the Chinese market, fell by 2.8%, 3.5%, and 2.4% respectively. Among other stocks, Prudential Group, a London-listed insurance company affected by the Chinese market, fell nearly 4%, and HSBC fell nearly 1%.

The two-year UK bond yield rose by more than 20 basis points, and the two-year U.S. bond yield has risen more than 10 basis points in consecutive trading days.

European bond prices fell across the board, with UK bond yields leading the way higher. After the release of UK CPI data, traders on Wednesday predicted that the Bank of England would cut interest rates by approximately 104 basis points this year, equivalent to four 25 basis point cuts, with only a 20% probability of a fifth rate cut.

At the end of the bond market session, the yield on UK 10-year benchmark bonds was approximately 3.98%, up about 19 basis points for the day, approaching 4.0% intra-day, reaching a five-week high since December 11th; the yield on UK 2-year bonds closed at 4.35%, up about 22 basis points for the day, approaching 4.40% intra-day, reaching a five-week high since December 13th; the yield on 10-year benchmark German bonds closed at 2.31%, up about 6 basis points for the day, reaching a six-week high of 2.33% intra-day; the yield on 2-year German bonds closed at 2.69%, up about 10 basis points for the day, reaching a five-week high of over 2.70% intra-day.

The yield on US 10-year benchmark bonds fell below 4.04% in early Asian trading, hitting a daily low, and fell by about 2 basis points during the day. After the release of US retail sales data before the stock market opened, it accelerated its climb and quickly rose above 4.10%, reaching 4.13% in early US trading, hitting a high since the first day of the Federal Reserve's interest rate meeting on December 13th for two consecutive days, up about 7 basis points during the day, and was about 4.10% at the end of the bond market session, up about 4 basis points during the day.

The yield on 10-year US bonds stabilizes above 4.0%, closing above the 200-day moving average for the first time since December 12th.

The yield on 2-year US bonds, which is more sensitive to interest rate prospects, fell below 4.20% in early Asian trading, hitting a daily low, and fell by about 2 basis points during the day. It continued to rise after the release of retail data, reaching above 4.30%, rising above 4.37% during the midday trading of US stocks, up about 15 basis points during the day, with an increase of more than 10 basis points for two consecutive days, returning to the level of last Thursday's midday trading and continuing to move away from the approximately eight-month low of 4.12% reached last Friday. It was about 4.36% at the end of the bond market session, up about 14 basis points during the day, and both the yield on 10-year US bonds rose for two consecutive days.

Yields on US bonds of various maturities continued to rise on Wednesday, with short-term yields leading the way.

The US Dollar Index (DXY), which tracks the exchange rates of the US dollar against six major currencies including the euro, fell below 103.30 in early Asian trading, hitting a daily low, and fell by nearly 0.1% during the day. It quickly turned higher, briefly falling during the early European trading session and the early European stock market session. After the release of US retail sales data, the intraday gain quickly expanded, with the US stock market briefly approaching 103.70, hitting a high in intra-day trading since December 13th for two consecutive days, with an increase of over 0.3% during the day. At the close of the US stock market on Wednesday, the US dollar index was slightly below 103.40, with a slight increase of less than 0.1% during the day. The Bloomberg Dollar Spot Index, which tracks the exchange rates of the US dollar against ten other currencies, rose by more than 0.1%, reaching a high for the same period since December 12th. Both the Bloomberg Dollar Spot Index and the US dollar index have risen for four consecutive trading days.

Among non-US currencies, the Japanese yen has fallen for three consecutive days. The USD/JPY pair rose above 148.50 during the early trading session of the US stock market, reaching a high since November 30th. It rose by about 0.9% during the day and nearly 0.7% at the close of the US stock market. The EUR/USD pair fell below 1.0850 during the early trading session of the US stock market, reaching a low for the past two days since December 13th. It fell by nearly 0.3% during the day, but slightly rebounded towards the end of the US stock market. The GBP/USD pair, which had fallen for three consecutive days, rebounded during the European stock market session. It fell below 1.2600 before the European stock market session, reaching a one-month low. It fell by 0.3% during the day, but rose by nearly 0.5% during the European stock market session, reaching above 1.2680 at the close of the US stock market, with a decrease of nearly 0.4% during the day.

The offshore Chinese yuan (CNH) against the US dollar rose to 7.2070 during the early trading session of Wednesday's Asian market, but then fell more than once. After the release of US retail data, it continued to decline and did not rebound. During the early trading session of the US stock market, it fell to 7.2322, reaching a new low since November 20th after reaching a low since November 17th. It fell by 132 points during the day, a decrease of 252 points from the high point, but narrowed most of the decline afterwards. At 5:59 am Beijing time on January 18th, the offshore Chinese yuan against the US dollar was reported at 7.2218 yuan, a decrease of 28 points from the end of Tuesday's New York session. It has fallen for two consecutive days, and the decline has eased significantly compared to the more than 300 points on Tuesday.

Bitcoin (BTC) rose above $43,500 during the early trading session of the Asian market, but then continued to decline. It fell below $43,000 during the Asian market session and fell below $42,300 during the US stock market session, a decrease of more than $1,300 and more than 3% from the high point. It is far from the high point of $49,000 reached on the first day of the listing of the Bitcoin spot ETF last Thursday, the highest point since December 2021. At the close of the US stock market, it was below $42,700, with a decrease of more than 1% in the past 24 hours.

During the US stock market session, after falling more than 2%, US oil rebounded and approached a one-week high, while Brent crude oil fell from a one-week high. In the end, crude oil experienced different ups and downs for two consecutive days. On Tuesday, WTI February crude oil futures, which had risen for two consecutive days, closed up 0.22% at $72.56 per barrel, approaching the closing high since January 5th, which was set last Friday. Brent March crude oil futures, which rebounded on Tuesday, fell 0.52% to $77.88 per barrel, deviating from the closing high since January 5th, which was the same as last Friday.

U.S. WTI crude oil fell and then rose on Wednesday, returning to the volatility range since the beginning of the year.

U.S. gasoline and natural gas futures continued to fluctuate. NYMEX February gasoline futures rose 0.64% to $2.1354 per gallon, hitting a new high since January 3rd for three consecutive trading days and rising for four consecutive days. NYMEX February natural gas futures fell 1.03% to $2.87 per million British thermal units, hitting a new low since January 4th when it was $2.821, falling for two consecutive days. However, the decline was significantly eased compared to the nearly 12.47% drop on Tuesday.

European natural gas fell for three consecutive days and plummeted again on Wednesday after Monday. The UK natural gas futures contract, which fell 7.16% on Monday, fell by about 7.02% to 68.36 pence per kilocalorie, hitting a new low since July 19th for two consecutive days. The European benchmark Dutch natural gas futures, which fell 6.46% on Monday, fell 6.57% to 27.708 euros per megawatt-hour, hitting a new low since August 1st.

London Zinc Falls Over 3%, London Copper Hits Two-Month Low, Gold Falls Over 1% for Several Days, Hits Five-Week Low

The London base metal futures mostly fell on Wednesday as the market focused on Chinese economic data. London zinc fell over 3%, closing below $2,500 for the first time since mid-December, while London copper fell by about 1% and London lead fell nearly 2%, both falling for two consecutive days. London copper closed below $8,300, hitting a two-month low, and London lead fell to a one-week low. London nickel fell for five consecutive days, approaching the low point since April 2021, which was set on January 4th. London aluminum, which rebounded on Tuesday, fell back and hit a five-week low. London tin, on the other hand, rose slightly and rose for six consecutive days, hitting a new high since January 3rd after closing above $25,000 for the first time since January 3rd.

New York gold futures briefly turned higher before the U.S. stock market opened, but continued to fall after the release of U.S. retail sales data. During the U.S. stock market session, it hit a daily low of $2004.6, down nearly 1.3% for the day, falling more than 1% for two consecutive days.

In the end, COMEX February gold futures fell 1.17%, marking the largest two-day decline since January 3rd, closing at $2006.5 per ounce for two consecutive days, hitting a new low since December 13th, which was set last Thursday. Spot gold fell below $2,002 during the midday session of the US stock market, hitting an intraday low since December 13th, with a 1.3% decline during the day. By the close of the US stock market, it was close to the $2,006 mark, still down more than 1% during the day, just like the continuous 1% decline in futures gold for two consecutive days.

Spot gold and futures gold both fell more than 1% for two consecutive days.