Nasdaq fell nearly 2%, with the "Seven Sisters" seeing the largest sell-off in a year and a half, while small caps and Chinese concept stocks surged, and US Treasury bonds soared

US inflation cooled unexpectedly in June, with overall CPI growth turning negative for the first time in four years, and core year-on-year growth hitting a new low in over three years. The money market now fully expects a 25 basis point rate cut in September, with three rate cuts expected within the year.

US bonds, the US dollar, and gold all experienced severe volatility after the data release. The Nasdaq and Nasdaq 100 plummeted, deviating from their intraday historical highs, while the Russell small-cap stock index surged. The US dollar index dropped from a high of 104.99 to a low of 104. The British pound hit a one-year high against the US dollar. Yields on 2 to 30-year US Treasury bonds all fell by over 10 basis points intraday, steepening the yield curve. Spot gold broke through the $2400 per ounce mark for the first time since May 22, followed by a more than 2% intraday increase.

The Japanese yen suddenly strengthened, surging from 161.58 to 157.44 in just over half an hour, a nearly 3% increase. Reports indicated that the Japanese Ministry of Finance intervened to support the currency, but some analysts stated that the yen's rise was not due to Japanese government intervention in the foreign exchange market, but likely related to positioning adjustments caused by bets on a Fed rate cut.

Both the Chicago and St. Louis Fed presidents, who are FOMC voters next year, stated that the US CPI data showed more encouraging inflation progress. This year's voter and San Francisco Fed President Daly stated that the latest data suggest that the Fed may need to make interest rate adjustments, confirming market expectations of an imminent rate cut.

Traders are focusing on the second-quarter earnings season kicked off by large bank stocks on Friday, with the outlook being whether they can continue to outperform the broader market.

Expectations for rate cuts surged this year, reaching the highest level since April (61 basis points), with expectations for four rate cuts already priced in for 2025.

Rate cut bets drive rotation in US stocks, investors withdraw funds leading to the largest drop in tech giants since 2022

On Thursday, July 11, the S&P, Nasdaq, and Nasdaq 100 opened at new highs before quickly falling, while the Dow, closely related to the economy, turned higher, and US small-cap stocks surged:

Due to the unexpected decline in US June CPI consumer inflation, core data also hit a more than three-year low, the futures market fully digested the possibility of a Fed rate cut in September, with the S&P 500 index and the tech-heavy Nasdaq opening at new highs. The Dow opened slightly lower.

Within the first 10 minutes of trading, the S&P and Nasdaq had turned lower, with losses widening, while the Dow, dominated by blue-chip stocks, turned higher, rising nearly 0.4% or over 150 points, with mid, small, and micro-cap stocks rising against the trend, and the Russell small-cap stock index accelerating upwards, closing up 3.6% for its best single-day performance since November last year.

Approaching the closing bell and hitting daily lows, the Nasdaq approached 18200 points and fell nearly 2.2%, ending a seven-day streak of closing at new highs, while the S&P 500 fell over 1%, ending a six-day streak of hitting new highs Analysis shows that the extent of investors withdrawing from the seven tech giants hit the largest since 2022, causing the S&P and Nasdaq to miss at least six consecutive record highs. Funds flowed into small-cap stocks and industrial stocks, related to market expectations of interest rate cuts and the possibility of a soft landing for the U.S. economy. Real estate-related stocks such as Home Depot and D.R. Horton surged, as low interest rates reignited the property market frenzy.

At the close, the S&P and Nasdaq halted their seven-day gains, with the S&P 100 halting its six-day streak of record highs, the Nasdaq halting its seven-day streak of record highs, the Dow rising for two consecutive days to a seven-week high since May 21, and the Russell 2000 index closing up 3.6%, marking its best single-day performance since November 2023. Regional bank stocks rose by over 4%:

The S&P 500 index fell by 49.37 points, a decrease of 0.88%, closing at 5584.54 points. The Dow rose by 32.39 points, an increase of 0.08%, closing at 39753.75 points. The Nasdaq fell by 364.04 points, a decrease of 1.95%, closing at 18283.41 points.

The Nasdaq 100 fell by 464.02 points, a decrease of 2.24%, closing at 20211.36 points. The Nasdaq Technology Market Cap Weighted Index (NDXTMC), which measures the performance of Nasdaq 100 technology stocks, fell by 2.98%. The Russell 2000 small-cap stocks rose by 3.57%, marking its best single-day performance since November 2023. The VIX fear index rose by 0.54% to 12.92.

Dragged down by tech stocks, the Nasdaq fell by nearly 2%, the S&P 500 by nearly 1%, while small-cap stocks surged and the Dow slightly turned higher.

Among the 11 sectors of the S&P 500 index, the real estate sector rose by 2.66%, utilities, materials, industrials, and energy sectors rose by 1.83%-1.05%, the financial sector rose by over 0.8%, the consumer discretionary sector fell by 1.47%, the telecom sector fell by 2.56%, and the information technology/tech sector fell by 2.74%.

The "Tech Seven Sisters" plunged straight down, all closing at the daily low. Tesla fell by 8.44%, marking its largest single-day decline since January 25, performing the worst among the U.S. tech giants, ending an eleven-day rally and giving back all gains since July 3; Nvidia fell by 5.57%, ranking third in market value among U.S. stocks; Apple plunged by 2.32%, ending a seven-day rally, maintaining its position as the top market value; Microsoft dropped by 2.5%, ranking second in market value; Google A fell by 2.9%, falling from yesterday's historic high; Meta fell by 4.11%, and Amazon fell by 2.37%.

Tesla's stock price plummeted due to the delay in the release of robot taxis.

Chip stocks across the board collapsed. The Philadelphia Semiconductor Index fell by 3.47%, dropping below 5700 points from its historical high, and the industry ETF SOXX fell by 3.29%. NVIDIA's double long ETF fell by 11.09%; TSMC ADR fell by 3.43%, KLA fell by 4.42%, Applied Materials fell by 5.38%, Arm Holdings fell by 7.12%, Lam Research fell by approximately 6%, these five stocks all dropped from their historical highs; AMD fell by 1.1%, Micron Technology fell by 4.52%, Qualcomm fell by 4.29%, Broadcom fell by 2.22%, Intel fell by 3.93%.

AI concept stocks had mixed performances. SoundHound.ai had previously surged by over 22.1%, but later gave back most of the gains, closing up by 5.92%, BigBear.ai rose by 3.23%, Snowflake rose by 0.49%, Oracle rose by 0.77%, while Dell fell by 3.46%, Palantir fell by 2.74%, bidding farewell to its historical high, and CrowdStrike fell by 1.07%.

On the news front, reports indicated that Tesla plans to postpone the release of RoboTaxi from August to October, causing the stock price to hit a daily low. NVIDIA's rival and AI chip dark horse Groq received a $300 million investment from BlackRock, with a latest valuation of $2.2 billion. Apple reached a settlement with the EU on the antitrust investigation into its tap-and-pay technology. Ming-Chi Kuo stated that in the coming years, iPhones will continue to adopt glass prisms, and Bank of America raised Apple's target price to $256, citing the benefits of generative AI features in promoting iPhone upgrade cycles.

Chinese concept stocks outperformed the US market indices. The China Internet ETF (KWEB) rose by 2.4%, the China Technology ETF (CQQQ) rose by 1.8%, the Nasdaq Golden Dragon China Index (HXC) rose by 3.4% and closed up by 2.2%, breaking through 6100 points to a near four-week high.

Among popular stocks, new energy vehicle companies performed strongly, with XPeng rising by 7.68%, Li Auto rising by 3.42%, Nio rising by 1.3%, ZEEKR rising by 4.64%; JD.com rose by 6.99%, Baidu rose by 2.79%, Alibaba rose by 3.3%, Tencent Holdings (ADR) rose by 1.77%, Pinduoduo rose by 0.85%, Bilibili rose by 3.89%.

Other stocks with significant fluctuations include:

Gold and silver mining stocks rose across the board. Hecla Mining rose by 7.3%, Coeur Mining rose by 6%, Pan American Silver rose by 5.5%, Gold ETF GDX rose by 2.3%, and Silver ETF SLV rose by 2.6%.

Photovoltaic concept stocks generally rose, with Maxeon Solar up by 14.23%, ReneSola and Array Technology up by about 9.3%, Canadian Solar up by over 7.9%, JinkoSolar up by 3.9%, Canadian Solar up by about 3.6%, Daqo New Energy up by about 3.3%, First Solar up by over 2.1% showing poor performance, and SolarEdge up by over 0.9%.

Low ticket prices impact profits, with most US airline stocks trending lower. Delta Air Lines opened low by 10% and closed down nearly 4%, with second-quarter revenue hitting a new high but net profit declining by 30%, and third-quarter sales growth and EPS guidance both disappointing. American Airlines dropped by nearly 4%, and United Airlines fell by over 3%.

Pfizer opened high by over 3% and closed up by 1% to a one-month high, rising nearly 6% in pre-market trading. Encouraged by early trial data, the company resumed the development of its daily weight-loss drug Danuglipron and will conduct dose optimization studies in the second half of the year.

MicroStrategy, the largest holder of Bitcoin, opened high by nearly 10% and closed up by 4% after announcing a 10-for-1 stock split following Bitcoin reaching a historical peak four months ago. The reason cited was to facilitate investors and employees to purchase shares, still down by 32% from the historical high in March.

Snack and beverage giant PepsiCo erased an initial 3.4% decline, with second-quarter revenue slightly below expectations but EPS exceeding expectations, North American sales declining and full-year revenue growth expectations being revised down. Costco raised its membership fees for the first time since 2017, causing the stock price to drop by over 4%.

US inflation cooling down, traders increasing bets on rate cuts in Europe and the UK, European stocks rose for two consecutive days. The pan-European Stoxx 600 index closed up by 0.60%, hitting a four-week high since June 12, with heavily indebted utility stocks leading the way with a 1.8% intraday rise, and the UK mid-cap index rising by over 1.2%. Among the "Eleven Arhats" of European stocks, chip stock ASML rose and fell back by about 1.3%, while luxury goods stock LVMH's parent company rose by about 1.8%:

The European STOXX 600 index closed up by 0.60% at 519.51 points. The Eurozone STOXX 50 index closed up by 0.35% at 4976.13 points.

The German DAX 30 index closed up by 0.69%, the French CAC 40 index closed up by 0.71%, the Italian FTSE MIB index closed up by 0.03%, the UK FTSE 100 index closed up by 0.36%, the Dutch AEX index closed down by 0.38%, and the Spanish IBEX 35 index closed up by 0.89%

US Treasury yields across the board plunged into double digits, with 2-year and 10-year yields both trading at four-month lows

At the close, the more sensitive 2-year US Treasury yield to monetary policy fell by 10.70 basis points to 4.5109%, trading in the range of 4.6409%-4.4858% during the day. After the CPI data was released, it dropped from around 4.63% to near 4.50%. The benchmark 10-year US Treasury yield fell by 7.59 basis points to 4.2082%, dropping from around 4.28% to below 4.18% when the US CPI data was released, trading in the range of 4.2958%-4.1656% throughout the day.

Expectations of rate cuts led to a rise in gold prices, a decline in the US dollar, and a sharp drop in US Treasury yields (led by short-term bonds)

The 10-year German bund yield in the eurozone fell by 7.1 basis points at the close, hitting a daily low of 2.462%, dropping from around 2.55% to below 2.48% when the US CPI data was released. It fell by 10.6 basis points to a daily low of 2.790%, dropping from around 2.91% to below 2.82% when the US CPI data was released.

The 10-year French bond yield fell by 6.3 basis points, the 10-year Italian bond yield fell by 7.0 basis points, the 10-year Spanish bond yield fell by 6.4 basis points, and the 10-year Greek bond yield fell by 7.6 basis points. The 10-year UK bond yield fell by 5.1 basis points to 4.074%, dropping from around 4.171% near the daily high to around 4.090%.

Rate cut expectations are positive for demand prospects, despite the IEA revising down its oil demand growth forecasts for this year and next, oil prices have risen for two consecutive days

A weaker US dollar boosted demand for oil priced in dollars, with WTI August crude oil futures closing up $0.52, up over 0.63%, at $82.62 per barrel. Brent September crude oil futures closed up $0.32, up over 0.37%, at $85.40 per barrel.

In early Asian trading, Brent oil rose to $85.89 per barrel, up nearly 1% intraday; after the CPI data was released, US oil fell the most by 0.57%, and Brent oil fell the most by 0.5%; nearing the close, US oil hit a daily high, rising nearly 1.2%, breaking through the $83 per barrel level, having hit a high of $84.53 per barrel since April 19 during Friday's trading. Brent oil erased all losses to close at the daily high, hitting a high since April 30 and approaching $88 per barrel during Friday's trading Oil prices rise, with US oil briefly surpassing $83 per barrel

Analysis indicates that rate cuts typically stimulate economic growth, thereby boosting demand for crude oil. JPMorgan Chase stated that summer driving favors crude oil demand. However, there is a discrepancy between the International Energy Agency and OPEC on the issue of oil demand growth. The International Energy Agency (IEA) predicts that global oil demand growth will slow to less than 1 million barrels per day this year and next, while OPEC maintains its global oil demand growth forecast unchanged at 2.25 million barrels per day for this year and 1.85 million barrels per day for next year.

EIA natural gas inventories increase more than expected, with US August natural gas futures falling over 2.6%, European benchmark TTF Netherlands natural gas futures rising 2.7%, and ICE UK futures closing up around 2.2%.

The US dollar sees its deepest two-month decline, the pound hits a one-year high, the yen surges by 3%, and offshore RMB rises by 344 points, breaking through 7.26

The US Dollar Index (DXY), which measures against a basket of six major currencies, fell by 0.56% to 104.46 points. When the US CPI inflation data was released, it dropped from around 104.86 points to around 104.40 points, and further declined. Before the US stock market opened, it hit a daily low of 104.077 points, approaching the 104-point mark and the June 7th low of 103.999 points. Throughout the day, it remained in a downtrend, breaking below the 100-day moving average and the 200-day moving average (which are at 104.795 points and 104.449 points respectively).

The Bloomberg Dollar Index fell by 0.47% to 1253.92 points, with an intraday trading range of 1259.76-1249.85 points.

Non-US currencies rose across the board. The euro against the US dollar rose by up to 0.6% and approached 1.09, reaching a one-month high. The pound against the US dollar rose by a hundred points or 0.8% to a one-year high of 1.295, breaking through the 1.29 mark.

The US dollar suffers a heavy blow, falling to pre-June non-farm payroll data lows

Offshore RMB (CNH) against the US dollar rose by 247 points to 7.2677 yuan, trading overall in the range of 7.2924-7.2580 yuan during the session. After the US CPI data was released and before the US stock market opened, offshore RMB rose above 7.26 yuan for the first time since June 13th, briefly breaking through the 50-day moving average (which is currently at 7.2653 yuan) In the Asian currency market, the US dollar fell by 1.73% against the Japanese yen, closing at 158.88 yen, with an overall intraday trading range of 161.76-157.44 yen. The euro fell by 1.34% against the Japanese yen, closing at 172.68 yen, hitting a low of 171.58 yen, and rising to 175.43 yen at 20:15 Beijing time, reaching a historical high. The British pound fell by 1.24% against the Japanese yen, closing at 205.116 yen.

It is reported that the Bank of Japan has intervened in the foreign exchange market to support the yen.

Mainstream cryptocurrencies experienced mixed movements. The largest cryptocurrency, Bitcoin, rose by 0.22% to $57,750.00, trading between $57,235.00 and $59,895.00 during the session, hitting a daily high when US CPI inflation data was released. The second largest, Ethereum, was trading at $3,121.00, remaining relatively stable compared to Wednesday.

US CPI Data Boosts Rate Cut Expectations, Gold Rises Over 1% to Reclaim $2,400 Mark, Silver Surges 3%

The significant drop in US bond yields and the US dollar supported a notable rally in precious metals. COMEX August gold futures rose by 1.67% to $2,419.5 per ounce at the close, while COMEX September silver futures rose by 2.24% to $31.71 per ounce.

Prior to the release of June US CPI inflation data, spot gold and spot silver only saw slight gains. After the data was released, gold and silver surged to daily highs, with spot gold rising by over 2.2% to break through the $2,400 mark and spot silver rising by over 3% to surpass $31.7. Towards the end of the session, both gold and silver retraced slightly.

Overall, spot gold rose above $2,400 to a seven-week high, marking the first time since May 22, approaching the historical high of $2,449.89 per ounce set on May 20. Spot silver rose above $31.7 for the first time since May 30, reaching a six-week high.

Gold prices surged near historical highs, with spot gold breaking through $2,400 again.

Analysts suggest that due to the impact of US inflation data, the US dollar fell to a more than one-month low, while the US 10-year Treasury yield dropped to a four-month low, enhancing the attractiveness of gold.

Other precious metals such as platinum and palladium also rose by over 1%.

London industrial metals mostly declined. The economic indicator "Dr. Copper" fell by 1.2%, dropping below the two integer levels of 9,900 and 9,800 US dollars successively, erasing gains since last Wednesday. London aluminum fell by 0.2% to a nearly three-month low. London zinc saw a slight decline, but London lead rose by 0.8%, London nickel fell slightly to refresh a three-and-a-half-month low, London tin fell by about 1% from the mid-April high