SPDR S&P 500 and Nasdaq rebounded sharply, chip stocks weighed on the market, with NVIDIA falling more than 4% at one point, while Chinese concept stocks surged, outperforming their peers.

The main driving force behind the recent surge in the US stock market, semiconductor stocks, temporarily lost momentum, dragging down the two major US stock indices from successfully rebounding on Tuesday. Nvidia, which has been hitting record highs in recent days, fell from its peak. A recent report by Citigroup's strategist warned of the risk of a major sell-off in technology stocks, noting that investors have a very positive outlook on tech stocks to the extent that any sell-off could trigger a larger market crash.

On the other hand, Chinese concept stocks outperformed on Tuesday. Following the China Securities Regulatory Commission's proposal to suspend new margin financing and short selling and the announcement by Central Huijin Investment to further increase its holdings, popular Chinese concept stocks listed in the US followed the strong rebound in the A-share market on Tuesday, outperforming the broader market. Three new energy vehicle companies performed exceptionally well, all rising by more than 10%. Li Auto was upgraded from hold to buy by Deutsche Bank, with a target price set at $41, implying a 46% surge in stock price based on Monday's closing.

Federal Reserve officials who made statements on Tuesday echoed the signal from Fed Chairman Jerome Powell over the weekend that there is no rush to cut interest rates. Cleveland Fed President Loretta Mester said that if the economy develops as expected, there may be confidence in cutting interest rates "later this year," while Minneapolis Fed President Neel Kashkari believed that the inflation situation has clearly improved but more progress is still needed.

As investors focus on Fed officials' remarks and try to find clues to determine how recent economic data will affect Fed interest rate decisions, the overall volatility in the US stock market remains small. Before the US Treasury Department's large-scale sale of $42 billion in 10-year Treasury notes on Wednesday, US government bonds, which had experienced significant price declines in the previous two trading days, rebounded slightly, and the US dollar, which had been strong in recent days, retreated from its high point in nearly three months. The yield on the benchmark 10-year Treasury note fell back below 4.10%, and the yield on the two-year Treasury note, which is sensitive to interest rates, fell nearly 10 basis points from the one-month high set on Monday.

In the commodity market, positive news from China supported a halt in the continuous decline of base metals such as copper, while gold rebounded with support from the retreat of the US dollar. The supply risk caused by the tense situation in the Middle East continued to drive the international crude oil price higher. The ceasefire situation between Israel and Palestine is confusing. Israeli officials stated that they do not accept Hamas' ceasefire conditions, while Qatar and the United States confirmed receiving a "positive response" from Hamas regarding the ceasefire agreement framework in Gaza.

Nasdaq rebounds in late trading, chip stocks fall more than 1%, Nvidia falls after hitting a new high, Chinese concept stocks rise 6%

The three major US stock indices opened slightly higher, but their performance varied afterwards. The Dow Jones Industrial Average maintained its upward trend throughout the day, rising more than 160 points and over 0.4% at its daily high. The S&P 500 initially rose 0.3%, and the Nasdaq Composite Index initially rose nearly 0.4%, but both turned lower after about half an hour of trading. The S&P 500 fell nearly 0.2% at its daily low, but then rebounded multiple times before locking in gains in the late trading session. The Nasdaq fell more than 0.5% at midday, but rebounded in the afternoon.

In the end, all three major indices rebounded after two consecutive days of gains on Monday. The Dow Jones Industrial Average rose 141.24 points, or 0.37%, to close at 38,521.36 points, approaching the closing high set on Friday. The S&P 500 rose 0.23% to 4,954.23 points, also setting a new closing high since January 3, 2022. The Nasdaq, which reached a closing high on Friday, rose 0.07% to 15,609.00 points.

The tech-heavy Nasdaq 100 index initially rose nearly 0.4% but turned negative and closed down 0.23%, further distancing itself from the closing high set on Friday. The Nasdaq Technology Market Cap Weighted Index (NDXTMC), which measures the performance of technology stocks in the Nasdaq 100 index, also turned negative after an initial rise and fell more than 1% in early trading, closing down 0.66%, ending its two-day streak of closing highs. The small-cap Russell 2000 index, which is dominated by value stocks, quickly turned positive and maintained its upward momentum, closing up 0.85% after two days of declines since January 18.

In terms of individual stocks, Walgreens led the Dow Jones components with a gain of over 4%, while Nike and Disney rose nearly 3%. Johnson & Johnson, 3M, UnitedHealth, and Dow Chemical all rose more than 1%. Boeing, which fell more than 1% on Monday after new quality issues were discovered with some 737 Max planes, rose 0.9%. McDonald's, which had its largest decline since May 2022 after releasing its earnings report on Monday, continued to decline, closing down nearly 0.5%.

Among the major sectors of the S&P 500, only two declined on Tuesday. The IT sector, which includes chip stocks, fell nearly 0.5%, while the communication services sector, which includes Meta, fell 0.2%. Among the nine sectors that rose, materials led the gains with a 1.7% increase, followed by healthcare and interest rate-sensitive real estate, both rising more than 1%.

Leading tech stocks continued to have mixed performance. Tesla initially fell more than 2% but quickly rebounded, rising as much as 3% in early trading and closing up 2.2%, moving away from the closing low since May 2023.

Among the FAANMG stocks, Meta, the parent company of Facebook, initially fell and closed down 1%, further distancing itself from the closing high set after its earnings report was released last Friday, when it surged 20%. Amazon, which rose nearly 8% after its earnings report last Friday, also declined for two consecutive days, falling more than 1% in early trading and closing down nearly 0.7%. Microsoft, which rose for two consecutive days and set a new high in three years after its earnings report last Friday, initially turned negative but fell less than 1%. Netflix, which initially turned negative, closed down 1.1%. Apple initially turned positive and closed up nearly 0.9%, rising for two consecutive days after the launch of Vision Pro last Friday. Alphabet, the parent company of Google, maintained its upward momentum throughout Tuesday, rising more than 1% in early trading and closing up more than 0.3%, marking its fourth consecutive day of gains. Chip stocks overall fell back and underperformed the market. The Philadelphia Semiconductor Index and the semiconductor industry ETF SOXX both turned down in early trading, with a drop of over 2% at the beginning of the afternoon session. They closed down by about 1.1% and nearly 1.2% respectively, retreating after hitting a closing high since January 25th following three consecutive days of gains. Among individual stocks, NVIDIA initially rose to $697.54, continuing to hit an intraday historical high, but quickly turned down. It fell nearly 4.4% at one point during the afternoon session and closed down 1.6%, dropping from the closing historical high set over the past three trading days. AMD fell 5% at one point during the afternoon session and closed down 3.6%, marking a two-day decline to the closing low since January 18th. Ansys, which rose 9.5% after announcing better-than-expected earnings on Monday, closed down 1.6%, while Intel, which fell over 1% in early trading, closed up 0.2%.

NVIDIA rose to nearly $700 at the beginning of Tuesday's trading session, hitting an intraday historical high, but quickly turned down, falling over 4% during the session.

Including Apple, Microsoft, Alphabet, Meta, Amazon, NVIDIA, and Tesla, the seven major tech stocks overall fell slightly on Tuesday.

Including Apple, Microsoft, Alphabet, Meta, Amazon, NVIDIA, and Tesla, the seven major tech stocks

Most AI concept stocks rose, outperforming the overall market. Palantir (PLTR), which announced higher-than-expected fourth-quarter revenue and achieved annual profitability for the first time, rose 30.8%. C3.ai (AI) rose 7.8%, SoundHound.ai (SOUN) rose 5.5%, and BigBear.ai (BBAI) rose 10.1%. Super Micro Computer (SMCI), which rebounded on Monday to hit a closing historical high, fell over 5% during the session and closed up nearly 2.8%, while Adobe (ADBE) closed down 3.7%.

Popular Chinese concept stocks overall rose significantly, outperforming the market. The Nasdaq Golden Dragon China Index (HXC) rose nearly 6%, marking a two-day consecutive increase to a closing high since January 12th. Chinese concept ETFs ASHS, KWEB, and CQQQ rose 8.8%, 6.7%, and 7.1% respectively. Three new forces in the car manufacturing industry saw significant gains, with Nio rising nearly 12.1%, XPeng rising nearly 12%, and Li Auto rising 10.5%. Among other individual stocks, Dada Group rose over 20%, Bilibili rose over 10%, JD.com rose over 7%, NetEase rose over 6%, Alibaba and Tencent rose nearly 5%, and Baidu and Pinduoduo rose nearly 4%.

Banking stocks collectively fell for two consecutive days. The overall banking industry index, the KBW Bank Index (BKX), closed down by about 0.1%, marking a two-day consecutive decline to the closing low since January 18th. The KBW Nasdaq Regional Banking Index (KRX) fell 1.4%, hitting a new low since November 30, 2023, while the SPDR S&P Regional Banking ETF (KRE) dropped nearly 1.3%, also hitting a new low since November 30, 2023.

The KBW Regional Banking Index in the US has fallen 15% from its high in December last year and has dropped about 12% in the past five days.

Among regional banks, New York Community Bank (NYCB), which rebounded more than 5% on Friday but fell 42% throughout the week, dropped 22.2%, hitting a new low since 1997. Western Alliance Bancorporation (WAL), which fell nearly 2% on Monday, continued to decline for the second consecutive day. Zions Bancorporation (ZION), which also fell nearly 2% on Monday, rose less than 0.1%.

In terms of individual stocks that released their earnings reports, Eli Lilly (LLY), a heavyweight weight loss drug company that exceeded expectations in both fourth-quarter revenue and 2024 guidance, initially rose more than 5% but turned negative in early trading. Coherent (COHR), an engineering materials and laser supplier that reported higher-than-expected earnings in the second quarter, rose 17.4%. GE HealthCare Technologies (GEHC), a medical and healthcare company in the British Virgin Islands that exceeded expectations in fourth-quarter earnings, rose nearly 11.7%. DuPont (DD), a chemical giant that announced plans to repurchase $1 billion and raised its dividend after reporting fourth-quarter profits at the high end of its guidance, rose nearly 7.4%. Spotify Technology (SPOT), a music streaming company that narrowed its fourth-quarter loss with price increases and cost-cutting measures, initially rose 6% and closed up nearly 3.9%.

Among the volatile stocks, UPS (UPS), a courier giant, rose 5% in intraday trading and closed up nearly 5% after UBS upgraded its rating from neutral to buy and raised its target price to $160, expecting its cost-cutting measures to support profit growth. CleanSpark (CLSK), a Bitcoin mining company that announced the acquisition of three Bitcoin mining facilities in Mississippi and the opening of a new facility in Georgia, rose 12.1%. European stocks rebounded with the support of energy stocks following positive Chinese policies. The STOXX Europe 600 index easily erased Monday's losses and reached its highest closing level since January 6, 2022. Major European stock indices rose together, with the German and French stocks rebounding from Monday's decline and the UK stocks ending a four-day losing streak. The German stock market even reached a new all-time high, and the Italian stock index rose for the third consecutive day.

In terms of sectors, the oil and gas sector rose by about 2%, benefiting from BP's better-than-expected fourth-quarter earnings and accelerated share buybacks, which led to a nearly 5.5% increase in BP's stock price. The basic resources sector, which includes mining stocks, rose by over 1% due to the impact of Chinese demand. Among individual stocks, Novo Nordisk, the pharmaceutical company with the highest market value in Europe and listed in Denmark, rose by nearly 0.5% and continued to reach a new closing high. However, its weight loss drug competitor, Eli Lilly, briefly fell when releasing its earnings report. ASML, the chip stock with the highest market value in Europe and listed in the Netherlands, rose by nearly 0.8% and also reached a new closing high. It even rose by over 1.3% during trading hours. However, after the opening of the US stock market, as US chip stocks fell, ASML gave back some of its gains.

US Treasury yields fall, 2-year yield drops nearly 10 basis points from one-month high

The yield on the 10-year benchmark US Treasury bond briefly rose during European stock trading, reaching as high as 4.17%, close to the high since January 25th, which was set on Monday. However, it quickly turned lower, dropping below 4.10% during US stock trading hours, and fell to a daily low of 4.08% at the end of the US stock market session, a decrease of over 9 basis points from the daily high. It is still far from the low of 3.82% reached on Thursday last week, the lowest level since December 27th. At the end of the bond market session, the yield was around 4.10%, a decrease of nearly 6 basis points during the day.

The 2-year US Treasury yield, which is more sensitive to interest rate expectations, briefly rose to 4.48% during European stock trading, approaching the high since January 5th. However, it fell below 4.40% during the US stock market session and dropped to as low as 4.38% at one point, a decrease of nearly 10 basis points from the daily high and the high on Monday. At the end of the bond market session, the yield was around 4.40%, a decrease of about 3 basis points during the day. Both the 2-year and 10-year US Treasury yields fell after two consecutive days of gains.

Yields on US Treasury bonds of various maturities collectively fell on Tuesday, but still recorded cumulative increases for the first two days of the week.

US dollar index falls from nearly three-month high, offshore RMB rises more than 200 points to regain 7.20

The ICE US Dollar Index (DXY), which tracks the exchange rates of the US dollar against six major currencies including the euro, initially rose during European stock trading and approached 104.60, a new daily high. It also approached the high set on Monday, breaking above 104.60, the highest level since November 14, 2023. It rose by over 0.1% during the day but turned lower afterwards. It fluctuated again before the US stock market opened, rose briefly at the beginning of the US stock market session, but then continued to decline. It fell below 104.20 during the US stock market session and dropped to as low as 104.15, a new daily low, a decrease of nearly 0.3% during the day. At the close of trading on Tuesday, the US dollar index was below 104.20, down nearly 0.3% for the day. The Bloomberg Dollar Spot Index, which tracks the dollar against ten other currencies, fell by about 0.3%, ending the high it reached on Monday for the first time since November 17 last year, following two consecutive days of gains.

Among non-US currencies, the USD/JPY pair approached 148.80 during early European trading, nearing the two-month high set on Monday. However, it fell as European stocks turned negative and dropped nearly 0.6% for the day, with the US session seeing a low of around 147.80. The EUR/USD pair approached the low of 1.0720 set on Monday during European trading, the lowest since November 14, but rebounded and turned positive after the US stock market opened. At the close of trading, it was above 1.0750, up more than 0.1% for the day. The GBP/USD pair tested the low of 1.2530 during European trading, approaching the low of 1.2520 set on Monday, the lowest since December 23. At the close of trading, it hovered around 1.2600, up nearly 0.6% for the day.

In the offshore market, the offshore yuan (CNH) against the US dollar initially fell below 7.22 to a daily low of 7.2202, but quickly rebounded and maintained its upward momentum. It recovered to 7.20 during European trading, reaching a daily high of 7.1941, up 261 points for the day, breaking away from the intraday low of 7.2245 set on Monday, the lowest since January 18. At 5:59 am Beijing time on February 7, the offshore yuan against the US dollar was reported at 7.2014 yuan, up 187 points from the New York session on Monday, reversing the downward trend of the previous four trading days.

Bitcoin (BTC) rebounded throughout Tuesday, rising above $43,300 during the US stock market session, up more than $1,000 or more than 2% from the daily low below $42,400 during the early Asian session. At the close of trading, it was above $43,100, up nearly 2% in the past 24 hours, but still below the high of $43,500 reached on Wednesday, January 31, before the decline on Monday.

Crude oil continues to rebound, moving away from three-week lows

International crude oil futures continued to rebound, with a slight dip during early European trading after a rise in the Asian session, but maintaining an upward trend during the European and US trading sessions. WTI crude oil rose above $73.80 during the US stock market session, up more than 1.4% for the day, while Brent crude oil approached $79.10, up nearly 1.4% for the day.

In the end, crude oil closed higher for the second consecutive day. WTI March crude oil futures rose by $0.53, or 0.73%, to $73.31 per barrel, while Brent April crude oil futures rose by $0.60, or 0.77%, to $78.59 per barrel. Both WTI and Brent crude oil continued to move away from the closing lows set on January 10 and January 11, respectively.

Gasoline and natural gas futures in the United States have seen mixed movements. NYMEX March gasoline futures closed up 0.4% at $2.22 per gallon, rebounding for two consecutive days after hitting a low since January 17th last Friday. NYMEX March natural gas futures, which rose for two consecutive days, closed down 3.51% at $2.0090 per million British thermal units, hitting a closing low since April 2023.

London base metals futures halted their four-day decline on Tuesday. London copper and London zinc, which had fallen for four consecutive days, rebounded from their respective lows of the past two weeks and early December. London lead, which had fallen for four consecutive days, closed flat and stabilized at a two-week low. London tin, which fell nearly 3% on Monday, rose more than 1%, along with London aluminum, both rebounding after three consecutive days of decline, breaking away from their respective lows since mid-January and the past two weeks. However, London nickel fell for two consecutive days, closing below $16,000 for the first time since November 2020.

New York gold futures hit a daily low of $2038.8 during early European stock trading, down 0.2% for the day. Pre-market gains in US stocks were maintained, with US stocks hitting a daily high of $2055.3 during early trading, up 0.6% for the day.

In the end, COMEX April gold futures, which had fallen for two consecutive trading days, closed up 0.42% at $2051.4 per ounce, rebounding from the low of the past week set on Monday.

Spot gold remained above $2000 throughout Tuesday, hitting a daily high of $2039 during US stock trading, up nearly 0.7% for the day, breaking away from the low since January 25th when it fell below $2015. At the close of US stocks, it remained above $2030, up more than 0.5% for the day.

Spot gold testing $2040