Nasdaq fell by 1.5%, Meta and defense stocks hit new highs, Chinese concept stocks rose by over 5% against the market, oil prices rose by 5% before pulling back from highs

The final value of the US Markit Manufacturing PMI in September rose slightly to 47.3, higher than expected and the initial value. However, the ISM Manufacturing Index for the same month remained consistent with the previous value but lower than expected at 47.2, both still in contraction territory, with the price paid index hitting a nine-month low. In August, the US JOLTS job openings exceeded expectations, rebounding to 8.04 million, reaching a three-month high. However, recruitment activities were weak, aligning with the overall trend of a slowing labor market.

In the Eurozone, the inflation rate for September fell below the 2% target for the first time since mid-2021, dropping to 1.8%. This strengthens the case for the European Central Bank to cut interest rates in October. The final value of the Eurozone Manufacturing PMI for September saw a slight increase but remained deep in contraction. ECB policymakers and the Governor of the Bank of Finland mentioned that easing inflation pressures and deteriorating economic conditions in the Eurozone support the rate cut this month, leading to a decline in the euro and Eurozone bond yields.

Geopolitical tensions escalated in the Middle East, with reports from Xinhua News Agency stating that Iran launched multiple missiles towards Israel. The Israeli military spokesperson stated that they will continue to launch strong attacks in the Middle East. International oil prices stopped falling and quickly rose by over 5%. Safe-haven assets like gold and the Japanese yen surged, with spot gold rising over 1% to briefly surpass $2670 and the yen briefly breaking through 143. Subsequently, major asset classes rose but then retreated, with the yen turning lower.

The market is also monitoring a strike by dockworkers on the US East Coast and Gulf Coast, which could result in hundreds of millions of dollars in losses for the US economy and lead to billions of dollars in trade disruptions. Some analysts suggest that this may create difficulties for the Federal Reserve in its interest rate decision-making. The market's bet on a significant 50 basis point rate cut in November still hovers around 37%. Federal Reserve Governor Cook mentioned that artificial intelligence has a long-term restraining effect on inflation.

Tuesday, October 1st marks the first trading day of October and the fourth quarter. The Dow and S&P fell from their highs, with the Nasdaq dropping over 2% intraday. Nvidia fell nearly 4%, while the "fear index" VIX rose to a three-week high. However, Chinese concept stocks rose by over 5%, with Meta and defense stocks hitting new highs:

• US stock indices fell across the board. The S&P 500 fell by 53.76 points, or 0.93%, to 5708.72 points. The Dow, closely tied to the economic cycle, dropped by 173.18 points, or 0.41%, to 42156.97 points. The tech-heavy Nasdaq fell by 278.81 points, or 1.53%, to 17910.36 points. The Nasdaq 100 fell by 1.43%. The Nasdaq Technology Market Cap Weighted Index (NDXTMC) measuring the performance of Nasdaq 100 tech stocks fell by 1.90%. The Russell 2000 small-cap stock index, more sensitive to the economic cycle, fell by 1.48%. The fear index VIX rose by over 15% to 19.26.

  

• Most US stock industry ETFs closed lower, with the energy industry ETF following oil prices to rise by over 2%, and the utility industry ETF rising by nearly 1%. However, regional bank ETFs fell by over 3%, while banking and semiconductor ETFs saw similar declines of close to 3%. Technology industry ETFs and global tech stock ETFs fell by at least 2%, global aviation industry ETFs fell by over 1%, and internet stock index ETFs, biotechnology index ETFs, financial industry ETFs, and healthcare industry ETFs all fell by at least 0.5%

• Most of the 11 sectors of the S&P 500 index also fell. The energy sector rose by 2.23% driven by the rise in oil prices, the utility sector rose by 0.81%; the information technology/tech sector fell sharply by 2.66%, the real estate sector fell by 0.66%, and the financial sector fell by 0.55%.
• In terms of research and investment strategies, Bank of America believes that the U.S. September non-farm payroll data released on Friday will determine the market direction. If it exceeds expectations, it will strengthen the argument for a soft landing of the economy, potentially pushing the stock market to new highs, as the soft data in July and August have set a low threshold for triggering a rebound.
• Only Google and Meta among the "Tech Seven Sisters" rose. Apple fell by 2.91%, Google Class A rose by 0.69%, "metaverse" Meta rose by 0.70% to a new high, Microsoft fell by 2.23%, Tesla fell by 1.38%, NVIDIA fell by 3.66%, and Amazon fell by 0.64%.
• On the news front, Citigroup lowered its sales expectations for iPhones in the September to December quarter. Apple is preparing to launch a new iPhone SE, expected to be released in early 2025. The new iPhone SE will replicate the iPhone 14 and feature a more modern design. Apple is also preparing to launch an upgraded version of the iPad Air and keyboard products. Tesla is expected to record its first quarter of sales growth this year, with increased electric vehicle subsidies in China boosting demand.
• Chip stocks fell across the board. The Philadelphia Semiconductor Index fell by 3.6% and closed down by 2.9%, the industry ETF SOXX fell by 2.8%; NVIDIA's double long ETF fell by 7.4%. Intel fell by 3.3%, TSMC ADR fell by 0.9%, Broadcom fell by 2.9%, Arm Holdings fell by 4.9%, Micron Technology fell by 3.3%, Applied Materials fell by 2.4%, ASML ADR fell by 1.3%, KLA fell by 2.7%, AMD fell by 2.6%, and Qualcomm fell by 2.5%.
• AI concept stocks fell across the board. Dell Technologies fell by 4.5%, AMD fell by 2.6%. Serve Robotics rose by 0.5%, CrowdStrike fell by 1.9%, BullFrog AI fell by 18.5%, SoundHound AI, an AI voice company held by NVIDIA, fell by 2.2%, BigBear.ai fell by 5.8%, C3.ai fell by 6.7%, Snowflake fell by 4%, Oracle fell by 1.9%, and Palantir fell by about 2%.
• Chinese concept stocks rose against the market. The Nasdaq Golden Dragon China Index rose by 5.48%, the China Technology Index ETF (CQQQ) rose by 4.8%, the China Internet Index ETF (KWEB) rose by 6%, the FTSE China 3x Bull ETF (YINN) rose by over 12%, and the FTSE China 3x Bear ETF (YANG) fell by over 12%FTSE A50 index futures continue to rise, up more than 2%.
• Among popular Chinese concept stocks, Alibaba rose more than 6%, Nio and XPeng Motors rose more than 5%, Bilibili rose more than 14%, Pinduoduo rose 8%, Li Auto rose more than 11%, JD.com rose more than 7%, and UP Fintech rose 16.7%. Previous data shows that both Nio and Li Auto achieved record monthly deliveries in September, while Nio set a new high for deliveries in the third quarter.
• Other key stocks: 1) Boeing turned up more than 1%, with reports indicating the company is considering raising at least $10 billion through a new stock issuance to replenish cash reserves lost due to factory worker strikes. 2) CVS Health fell more than 2%, with sources stating that the company is working with advisors to conduct a strategic review of its business, which may include a spin-off. 3) Traditional automotive giant Stellantis fell for the second consecutive day, with its U.S. stock dropping more than 2%, as it extended the production pause of the electric version of the Fiat 500 due to weak demand until next month. The stock fell 12.5% on Monday, marking its largest single-day decline since mid-March 2020. 4) U.S. defense stocks rose, with Lockheed Martin and Raytheon Technologies hitting all-time highs, while the S&P Aerospace and Defense Index reached a new high, and cruise and airline stocks declined. 5) Nike's quarterly revenue missed expectations, leading to a withdrawal of full-year performance guidance, with the stock rising 4% after hours before quickly falling 6%.

Tensions in the Middle East caused European stocks to turn lower from intraday highs, with the banking index leading the decline with a 2.2% drop. Renault in France continued its industry downturn, falling over 3%. Among national indices, only the UK's FTSE rose, while Italy's index fell by 1% being the worst performer:

The pan-European STOXX 600 index closed down 0.38% at 520.88 points. The Eurozone's STOXX 50 index closed down 0.93% at 4954.15 points. The FTSE All-World 300 index closed down 0.36% at 2061.79 points.

Germany's DAX 30 index closed down 0.64% at 19217.55 points. France's CAC 40 index closed down 0.81% at 7574.07 points. Italy's FTSE MIB index closed down 1.01% at 33781.00 points. The UK's FTSE 100 index closed up 0.46% at 8274.94 points.

Investors are concerned about escalating tensions in the Middle East, along with rising inflation and significantly improved economic data, increasing the probability of a rate cut by the European Central Bank in October. Both U.S. and European bond prices rose, leading to lower yields, with long-term bond yields experiencing a deeper decline, and the 10-year U.S. Treasury yield briefly dropping by 11 basis points:

• U.S. Bonds: At the close, the yield on the 10-year U.S. benchmark Treasury note fell by 4.18 basis points to 3.7391%, hitting a one-week low, dropping by 11 basis points at one point and briefly falling below 3.70%. The 2-year U.S. Treasury yield dropped by 2.86 basis points to 3.6125%, falling by 8 basis points at one point and briefly falling below 3.60%

• Eurozone Bonds: The yield on the 10-year German bund fell by 8.7 basis points to 2.036% at the close, hitting the lowest level since January. The 2-year German bund yield dropped by 4.8 basis points, briefly falling below 2% for the first time since 2022. The 30-year German bund yield fell by nearly 10 basis points. The 10-year French bond yield fell by over 13 basis points to 2.792%, the lowest since March. The 10-year UK gilt yield fell by 6.3 basis points to 3.941%. The 2-year UK gilt yield dropped by 2.8 basis points to 3.955%.

Powell's hawkish remarks significantly cooled rate cut expectations, pushing the US dollar index above 101 to a near three-week high, while the pound fell by 1%. The current rate cut expectations by the ECB have led to the euro falling for three consecutive days, and tensions in the Middle East briefly pushed the yen higher, briefly breaking through 143. The offshore yuan plunged by nearly 290 points and briefly fell below 7.03 yuan, erasing most of the gains since last Wednesday:

• US Dollar: The DXY US dollar index rose by 0.6% to 101.39, the highest since September 12, after three consecutive months of decline and nearly 1% decline in September.

• Non-US Currencies: The Australian dollar and New Zealand dollar fell from more than a year high. The euro against the US dollar fell by nearly 90 points or 0.8%, dropping below 1.11, falling for three consecutive days to a near three-week low. The British pound against the US dollar fell by over 130 points or 1%, breaking below 1.33 to a two-week low.
• Japanese Yen: The Japanese yen against the US dollar briefly rose above 143 before the US stock market midday, stopped falling and rose by 0.4%, then fell again, trading at 143.66. European stocks fell below 144 during the session, dropping by over 90 points or 0.6%.
• Japan's new Prime Minister Fumio Kishida tried to reverse the external impression of him being "hawkish," saying he hopes to see the Bank of Japan maintain its loose policy. The minutes of the September meeting of the Bank of Japan showed that policymakers discussed the need to be cautious about recent rate hikes, but it had little impact on the market.
• Offshore Renminbi (CNH): The offshore renminbi against the US dollar continued to decline, falling by nearly 290 points and briefly falling below 7.03 yuan, erasing most of the gains since last Wednesday. It fell by 226 points at the close, trading overall in the range of 7.0012-7.0354 yuan during the session.
• Cryptocurrencies: The largest cryptocurrency leader Bitcoin fell by over 2% and approached $62,000, falling for three consecutive days to the lowest level in two weeks since September 19. The second-largest Ethereum fell by over 3% and fell below $2,500, also hitting a near two-week low. At the New York close, the CME Bitcoin futures main contract was at $61,965.00, down 4.35% from Monday's New York closeCME Ethereum futures DCR main contract reported $2496.00, down 5.81% from Monday.

Tensions in the Middle East drive international oil prices up by about 2.5% to a one-week high, with intraday gains exceeding 5%, while European natural gas briefly rose by 1.8%, hovering near four-week highs:

• WTI Crude Oil: WTI November futures closed up $1.66, up 2.4%, at $69.83 per barrel. At midday, US stocks rose by $3.77 or 5.5%, approaching $72, and before the turnaround, during the European stock period, they had fallen by 2.7% to $66.34.

• Brent Crude Oil: Brent December futures closed up $1.86, up 2.6%, at $73.56 per barrel. At midday, US stocks rose by $3.75 or 5.2%, briefly surpassing $75, and before the turnaround, during the European stock period, they had fallen by 2.5% and dropped below $70. Deutsche Bank lowered its 2025 Brent oil price forecast by 18% to $66 per barrel, stating that OPEC+'s plan would result in an actual production increase of about 1.5 million barrels per day next year.

• Natural Gas: NYMEX US November natural gas futures fell by 0.92% to $2.8960 per million British thermal units. The European benchmark TTF Dutch natural gas futures briefly rose by 1.8%, with the closing gain narrowing to 0.7%, still hovering near four-week highs.

The escalation of tensions in the Middle East, combined with the demand for safe-haven assets, expectations of further interest rate cuts in the United States, and the overlay of US bond yields, all bode well for gold prices, with spot gold rising by over 1%, briefly surpassing $2670, having hit a historical high of $2685.42 last Thursday, and experiencing the largest single-day decline in over four weeks on Monday due to Powell's hawkish remarks:

• Gold: COMEX December gold futures rose 1.07% to $2684.80 per ounce at the close. Spot gold rose by over $38 or 1.5% at midday in US stocks, reaching a high of $2673, recovering from last Friday's decline, and trading around $2660, up by about 1% at the close.

• Silver: COMEX December silver futures rose 0.92% to $31.715 per ounce at the close. Spot silver briefly rose by over 2% to $31.85, with the closing gain significantly narrowing to 0.7%, trading at $31.36

• Most London Industrial Metals Rise Over 1% : LME Copper closed up $150 or 1.5% at $9,979 per ton. LME Aluminum closed up $36 or 1.4% at $2,648 per ton. LME Zinc closed up $56 or 1.8% at $3,146 per ton. LME Lead closed up $12 or 0.6% at $2,108 per ton. LME Nickel closed up $197 or 1.1% at $17,711 per ton. LME Tin closed up $421 or 1.3% at $33,879 per ton. LME Cobalt remained unchanged at $24,300 per ton.

Updates Before 22:00 on October 1

Tuesday, October 1st marked the first trading day of October and the fourth quarter. The U.S. stock market opened lower, with the Dow and S&P indices falling from historical highs.

Within 20 minutes, the Dow extended losses to 300 points or 0.7%, the S&P 500 index fell 0.9%, the Nasdaq dropped over 1%, the chip index fell 1.6%, but the Chinese concept index rose against the trend by 1.4%.

After 40 minutes of trading, the Nasdaq fell over 2%, the Nasdaq 100 fell over 2%, NVIDIA fell 3.6%, the Philadelphia Semiconductor Index fell 3.3%, while gold, silver, and oil rose. The Nasdaq Golden Dragon Index rose 1.2%.

Chinese concept car stocks rose, with Nio up 3%, XPeng up over 3% before halving its gains, and Li Auto up over 4%. Previous data showed that both XPeng and Li Auto achieved record-high monthly deliveries in September, while Nio set a new delivery record in the third quarter.

Traditional automotive giant Stellantis fell for two consecutive days, with its U.S. stock falling over 2% at the opening. This was due to weak demand leading to the extension of the production pause for the electric version of the Fiat 500 until next month. The stock fell 12.5% on Monday, marking its largest single-day decline since mid-March 2020.

As the decline in U.S. stocks widened, Brent and WTI crude oil prices stopped falling and quickly rose over 2%. Safe-haven assets such as spot gold and the Japanese yen saw short-term gains, with spot gold rising over 1% intraday and the yen against the dollar rising over 50 points. This was mainly due to renewed geopolitical tensions in the Middle East, with reports that the White House claimed Iran was preparing to attack Israel. According to CCTV News, air raid sirens were heard in multiple locations in northern Israel.

Previous Articles from Wall Street News

Eurozone Inflation Cools Significantly in September, with expectations of an October rate cut by the ECB leading to a surge in Eurozone bonds. Overnight, Fed Chair Powell poured cold water on the market's expectations for a significant rate cut, stating that there was "no rush to cut rates." On Tuesday, the Asia-Pacific markets saw mixed movements, with Japanese stocks reboundingAccording to CCTV News, today, the new leader of the Liberal Democratic Party of Japan, Shigeru Ishiba, took over as Prime Minister.

The Eurozone's CPI in September fell by the largest margin since January 2024 on a month-on-month basis, and for the first time since 2021, it dropped below the European Central Bank's 2% target. Analysts believe that the possibility of a rate cut by the European Central Bank in October has significantly increased. European Central Bank Governing Council member Olli Reh stated that easing inflation pressures and deteriorating Eurozone economy support a rate cut this month.

On Tuesday, European stock markets opened with the Stoxx 600 index rising, while French and German bonds surged. Before the U.S. stock market opened, Chinese concept stocks rose across the board:

• The yield on French 10-year government bonds fell by over 13 basis points to 2.792%, the lowest level since March. The yield on German 10-year government bonds dropped by 8 basis points to 2.051%.
• Li Auto rose by 3.08% in pre-market trading, XPeng Motors rose by 2.55%, Nio rose by 3.74%.
• Among Chinese concept ETFs, the KraneShares CSI China Internet ETF (KWEB) rose by 1.4% pre-market, iShares MSCI China ETF (MCHI) rose by 0.96%, the ASHR ETF tracking the CSI 300 Index rose by 1.19%, and the iShares FTSE China 25 Index ETF (FXI) rose by 0.91%.
• Boeing's U.S. stock price fell by 3% pre-market as the company is reportedly considering raising at least $10 billion.
• Both Brent crude and WTI crude initially fell by around 2.5% before narrowing their losses.
• The U.S. Dollar Index briefly rose above 101.
• The Nikkei 225 Index closed up by 1.9% at 38,651.97 points. The TOPIX Index in Japan rose by 1.7% to 2,690.78 points.

[19:39 Update]

Before the U.S. stock market opened, Li Auto rose by 3.08%, XPeng Motors rose by 2.55%, Nio rose by 3.74%, Tesla and NVIDIA both slightly increased by 0.2%. Boeing's U.S. stock price fell by 3% pre-market as the company is reportedly considering raising at least $10 billion.

Among Chinese concept ETFs, the KraneShares CSI China Internet ETF (KWEB) rose by 1.4% pre-market, iShares MSCI China ETF (MCHI) rose by 0.96%, the ASHR ETF tracking the CSI 300 Index rose by 1.19%, and the iShares FTSE China 25 Index ETF (FXI) rose by 0.91%.

[17:12 Update]

Brent crude oil approached $70, falling nearly 2.5% intraday. WTI crude fell by over 2.5% to $66.42.

[16:35 Update]

The Euro slightly declined against the U.S. Dollar, now trading at 1.11 Euros. The U.S. Dollar Index (DXY) rose above 101 for the first time since September 18.

French government bonds led the European bond market, with the 10-year yield dropping by 8 basis points to 2.84%.

German bonds rose, with the 10-year yield falling by 5 basis points to 2.07%, the lowest level since January.

[16:20 Update]

WTI crude oil fell over 2.00% intraday, while Brent crude oil fell by 1.98% intraday.

[14:13 Update]

The Nikkei 225 index closed up by 1.9% at 38651.97 points.

The TOPIX index in Japan rose by 1.7% to 2690.78 points.

The USD/JPY rose to 144.37, with an intraday increase of 0.52%.

Overnight, Powell stated during the Q&A session with Morgan Stanley economist Ellen Zentner after his speech: "The committee is not in a hurry to cut interest rates. If the economic performance meets expectations, there will be two more rate cuts this year, totaling 50 basis points."

Stay tuned for more updates