Overnight US Stocks | "Seven Giants" Decline Drag Nasdaq Down Nearly 2%, NVIDIA Falls Over 5%

According to the Wise Finance APP, on Thursday, the three major indices showed mixed movements, with the Nasdaq plummeting nearly 2% as the U.S. June CPI came in lower than expected, reinforcing expectations of a Fed rate cut.

[U.S. Stocks] At the close, the Dow Jones Industrial Average rose by 32.19 points, or 0.08%, to 39753.55 points; the Nasdaq fell by 364.04 points, or 1.95%, to 18283.41 points; and the S&P 500 Index dropped by 49.37 points, or 0.88%, to 5584.54 points. The seven tech giants in the U.S. faced the largest selling pressure in nearly a year, with NVIDIA (NVDA.US) falling by over 5% and losing $185 billion in market value, while Tesla (TSLA.US) dropped by over 8%. The remaining five giants all fell by at least 2.3%. The Russell 2000 Index surged by 3.57%, marking its best single-day performance in 7 months. The Nasdaq Golden Dragon China Index closed up by 2.2%, with Alibaba (BABA.US) rising by 3.3%.

[European Stocks] Major European indices rose, with Germany's DAX30 Index up by 0.69%, the UK's FTSE 100 Index up by 0.36%, France's CAC40 Index up by 0.71%, and the Euro Stoxx 50 Index up by 0.35%.

[Asia-Pacific Markets] The Nikkei 225 Index rose by 0.94%, Indonesia's Jakarta Composite Index rose by 0.26%, and Vietnam's VN30 Index fell by 0.36%.

[Gold] COMEX gold futures closed up by 1.73% at $2420.9 per ounce, while COMEX silver futures rose by 2.29% to $31.725 per ounce.

[Cryptocurrencies] Bitcoin fell by 0.35% to $57509.9 per coin, while the price of Ethereum remained almost unchanged at $3109 per coin.

[Crude Oil] WTI crude oil futures for August delivery on the New York Mercantile Exchange rose by 52 cents, or 0.63%, to settle at $82.62 per barrel. Brent crude oil futures for September delivery on the Intercontinental Exchange rose by 32 cents, or 0.37%, to settle at $85.40 per barrel.

[Metals] London metals fell, with LME copper dropping by over 1.2%, LME aluminum by 0.3%, LME nickel by 0.14%, and LME zinc by 0.3%.

[Macro News]

U.S. stock indices hit by the "Seven Giants," risk appetite increases for small-cap stocks. The S&P 500 Index saw its longest winning streak since November last year come to an abrupt end on Thursday. The "roadblock" was the mega-cap tech stocks that have been driving the index higher this year. Investors sold off the so-called "Tech Seven Giants" on a scale not seen in nearly a year, as inflation data sparked bets on a Fed rate cut as early as September. Investors withdrew from this year's winners, leading the iShares MSCI USA Momentum Factor ETF to its worst performance since May. This turmoil has brought about some unusual data The S&P 500 index fell by 1%, despite 400 constituent stocks in the index rising. The benchmark index, excluding market capitalization weights, rose by 1.2%, outperforming the weighted index by the largest margin since November 2020. The Russell 2000 small-cap index, consisting mostly of low credit rating and high borrowing demand stocks, rose by 3.2%, achieving its best performance relative to the S&P 500 index since March 2020. An index tracking the "Big Seven Tech Giants" plummeted by 4.1% at one point, marking the largest decline since July 2023.

US Initial Jobless Claims Decline Exceeds Expectations. Initial jobless claims in the US last week declined more than expected. However, at this time of year, interpreting the job market becomes more challenging due to automakers shutting down factories for retooling. The US Labor Department reported on Thursday that initial jobless claims decreased by 17,000 to 222,000 people as of July 6, the lowest level since the end of May. Initial claims data include the Independence Day holiday, and tend to fluctuate around holidays. Automakers typically start shutting assembly plants from the week of July 4 for retooling. However, the timing may vary among manufacturers, potentially causing the government's models used to smooth seasonal fluctuations in data to fail. While this may disrupt initial claims data, increasing signs indicate that as the Federal Reserve significantly raises rates in 2022 and 2023, economic activity is cooling, and the labor market is losing momentum.

Goolsbee: June CPI Shows Inflation on Path to 2%. Chicago Fed President Goolsbee described the latest inflation data as "very good," making him believe that the Fed is progressing towards its 2% target. Goolsbee declined to provide guidance on the timing of the first rate cut. However, he emphasized the importance of the recent slowdown in housing inflation, calling it "very encouraging." He has been closely monitoring this category of inflation to determine when a rate cut should be made. Goolsbee also stated, "If the economy overheats, there is reason to tighten policy. But in my view, this does not look like an overheated economy." Goolsbee explicitly stated that she is open to pausing after a rate cut or a series of rate cuts, emphasizing that the interest rate trajectory will depend on inflation data.

Daly: Relaxing Monetary Policy "Sooner Rather Than Later." Daly stated in a media conference call on Thursday that given recent inflation and employment data, she is more convinced that relaxing monetary policy sooner rather than later is appropriate. "Based on the information we have received so far, including employment, inflation, GDP growth, and economic outlook data, I believe that some policy adjustments may be necessary," Daly said. However, Daly refused to disclose when she thinks it is appropriate for the Fed to cut rates. Daly said, "At this critical moment, I have publicly stated before that I believe prescriptive forward guidance, including the number of rate cuts and timing, is not actually the best approach." Daly pointed out that the risks facing the Fed's dual goals of price stability and full employment have been better balanced. She believes that monetary policy is working, but there is still considerable uncertainty about how the economy will develop US 30-year mortgage rates fall as Fed rate cut expectations rise. US mortgage rates have fallen for the fifth time in six weeks. Freddie Mac said on Thursday that the average rate on 30-year fixed-rate mortgages was 6.89%, down from 6.95% last week. Homebuyers are starting to see some relief. In recent weeks, mortgage rates have dropped from around 7% in April and May. More properties are entering the market after years of shortages. Sam Khater, Chief Economist at Freddie Mac, said in a statement that homebuyers "see more inventory in the market, including a fair amount of discounted listings, which is an encouraging sign."

【Stock News】

Tesla (TSLA.US) delays release of Robotaxi. According to sources, Tesla has postponed the release of its self-driving taxi Robotaxi from August to October to allow the project team more time to manufacture more car prototypes. A few months ago, Tesla CEO Elon Musk set the release date for August 8, and the optimism surrounding the upcoming event drove Tesla's stock price up for 11 consecutive days. However, shortly after the news of the delay, Tesla fell more than 8% on Wednesday.

NVIDIA (NVDA.US) to launch new generation gaming graphics card GeForce RTX 5090. According to the latest leaks, NVIDIA is set to launch the new generation gaming graphics card GeForce RTX 5090, with a base frequency close to 2.9 GHz. This figure is significantly higher than the current flagship model RTX 4090's 2.23 GHz, and even surpasses the RTX 4090's 2.52 GHz boost frequency. If this information is accurate, the RTX 5090 will become one of the graphics cards with the highest base frequency on the market. The RTX 5090 is expected to be based on the Blackwell architecture, equipped with 28GB of GDDR7 memory and a 448-bit memory interface. Although it will not feature the full GB202 chip, with the top configuration usually having 32GB of memory and a 512-bit memory interface, the performance of the RTX 5090 is highly anticipated. Additionally, the TGP of this graphics card is expected to be 450W, with NVIDIA also preparing a version with a 350W TGP, 16GB of memory, and a 256-bit memory interface. The industry generally expects the RTX 5090 to be released in the fourth quarter of 2024, where it will represent NVIDIA's new benchmark in the high-end graphics card market. Specific specifications and performance of the graphics card still await official confirmation.

【Major Bank Ratings】

Bank of America Global Research: Raises Apple (AAPL.US) target price from $230 to $256