Chinese concept stocks continue to rise by nearly 5%, with US stocks slightly up after fluctuations, and oil prices rising nearly 4% before falling back

In September, the "small non-farm" ADP private sector employment in the United States rebounded more than expected, with the previous value revised upwards. However, wage growth declined again. The U.S. bond yields and the dollar rose, indicating the market's continued acceptance of the logic that the Federal Reserve does not need to make a significant interest rate cut next time. This year, the median policy outlook of the Federal Reserve and Richmond Fed President Barkin warned that there is a median of 50 basis points rate cut expected within the year, with significant uncertainty in inflation and employment prospects.

The market is focusing on the release of the U.S. non-farm employment data for September on Friday, with an expected increase in new jobs from the previous 142,000 to 150,000, while the unemployment rate is expected to remain unchanged at 4.2%. Traders estimate the likelihood of a significant 50 basis points rate cut by the Federal Reserve in November to be less than 39%. At the same time, several ECB officials, including hawkish voters like Schnabel, hinted at supporting a rate cut in October, leading to a four-day decline in the euro.

The escalating tensions in the Middle East have heightened market concerns. The major U.S. stock indices opened lower for two consecutive days, with the Dow Jones Industrial Average opening nearly 190 points lower. According to CCTV News, Iranian President warned that if Israel carries out retaliatory strikes, Iran will respond more strongly. U.S. President Biden stated that he does not support Israeli attacks on Iranian nuclear facilities. Due to concerns about Israeli strikes on Iran's oil industry, oil prices rose nearly 4%.

Japan's new Prime Minister Kishida stated that the current economic situation in Japan is not suitable for another rate hike. Bank of Japan Governor Kuroda hinted at a dovish signal, avoiding reiterating a commitment to further rate hikes, and instead discussing the risks facing the economy. The yen fell sharply by 2% to below 146. Despite the general decline in U.S. stocks at the opening, Chinese concept stocks continued to rise against the trend, surging more than 5% in early trading to the highest level since February 2023.

After the opening hour, U.S. stocks successively turned higher, with NVIDIA rising 1.6% leading the rebound in tech stocks. The chip index rose by 2.5% at one point. After a midday dip, U.S. stocks turned lower again, with only small-cap stocks still falling. The "fear index" VIX rose above 20 at the opening of the U.S. stock market, then fell. Tesla fell by 6.4% at one point. The Chinese concept index rose by 6.5% before closing up nearly 5%, reaching its highest level since February last year, while Agora rose by nearly 134% before closing up more than 79%:

• U.S. stock indices rose slightly, with only small-cap stocks falling. The S&P 500 closed up 0.79 points, a 0.01% increase, at 5709.54 points. The Dow Jones, closely related to the economic cycle, closed up 39.55 points, a 0.09% increase, at 42196.52 points. The tech-heavy Nasdaq closed up 14.76 points, a 0.08% increase, at 17925.12 points. The Nasdaq 100 closed up 0.15%. The Nasdaq Technology Market Cap Weighted Index (NDXTMC), which measures the performance of Nasdaq 100 tech sector components, closed up 0.47%. The Russell 2000 small-cap stock index, more sensitive to the economic cycle, closed down 0.09%. The fear index VIX fell by nearly 2%, dropping below 19.

• U.S. stock industry ETFs closed with mixed gains and losses, with the semiconductor ETF rising by nearly 1.5%, the energy industry ETF rising by over 1%, and the technology industry ETF rising by over 0.5%. Global technology stock ETFs also saw an increase of close to 0.5%

• The global aviation industry ETF fell by more than 1%, while daily consumer goods ETF and optional consumer goods ETF also dropped by nearly 1%.

• The 11 sectors of the S&P 500 index also showed mixed performance. The energy sector continued to rise by 1.12% driven by the situation in the Middle East, the information technology/tech sector rose by 0.59%; the optional consumer goods and daily consumer goods sectors each fell by 0.78%, the communication services sector fell by 0.44%, the real estate sector fell by 0.37%, and the materials sector fell by 0.33%.
• In terms of research and investment strategies, Scott Rubner, Global Market Director and Tactical Expert at Goldman Sachs, believes that the bullish trend in the U.S. stock market may push the S&P index above 6000 points by the end of December, exceeding his year-end target. However, there may be a round of volatility in October, and he remains tactically bearish on the U.S. stock market for the next three weeks. Nevertheless, the stock market tends to rise after the U.S. presidential election. Strategas Securities stated that the U.S. stock market historically benefits from Chinese stimulus plans and credit expansion periods.
• Only NVIDIA and Apple among the "Tech Seven Sisters" saw gains. Apple closed up by 0.25%, NVIDIA closed up by 1.58%, Tesla fell by 6.4% and closed down by 3.49%, Microsoft fell by 0.85%, Google Class A shares fell by 0.68%, Meta fell by 0.63% from its recent high, and Amazon fell by 0.20%.

• On the news front, Tesla's third-quarter delivery volume increased year-on-year for the first time this year, but still fell short of market expectations. Amazon will increase the number of ads on Prime Video. Microsoft will invest €4.3 billion in Italy for the field of artificial intelligence and expand its cloud computing business. OpenAI raised $6.6 billion in its latest round of financing, with a valuation of $157 billion. Thrive Capital led the investment, with participants including Fidelity, Microsoft, NVIDIA, and SoftBank. Following OpenAI closely, Google is fully developing reasoning artificial intelligence software. NVIDIA rose by 1.6% after hours, with CEO Jensen Huang stating that their Blackwell series chips are facing a "crazy" demand situation in the market.
• Chip stocks rose across the board. The Philadelphia Semiconductor Index rose by 2.5% and closed up by 1.5%, the industry ETF SOXX closed up by 1.4%; NVIDIA's double long ETF closed up by 3.2%. Intel closed down by 1.3%, Taiwan Semiconductor ADR closed up by 2.2%, Broadcom closed up by 1.9%, Arm Holdings closed up by 0.7%, Micron Technology closed down by 0.5%, Applied Materials closed up by 2%, ASML ADR closed up by 1.2%, KLA closed up by 3.1%, AMD slightly rose, Qualcomm closed up by 1.5%

• AI concept stocks rise more than fall. Dell Technologies closed up 0.3%, AMD closed up 3.6%. Serve Robotics closed down 1%, CrowdStrike closed up 1.9%, BullFrog AI closed up 20.8%, SoundHound AI, an AI voice company held by NVIDIA, closed up 3.7%, BigBear.ai closed up 0.4%, C3.ai closed up 1.3%, Snowflake closed down 0.5%, Oracle closed up 0.3%, Palantir closed up 2.8%.
• Chinese concept stocks continue to show strong momentum. The Nasdaq Golden Dragon China Index rose 6.5% and closed up 4.93%, reaching the highest level since February last year. The China Technology Index ETF (CQQQ) closed up 7.7%, the Chinese Internet Index ETF (KWEB) closed up 6.4%, the FTSE China 3x Bull ETF (YINN) rose over 21.8%, and the FTSE China 3x Bear ETF (YANG) fell nearly 22%. The FTSE A50 futures continued to rise in overnight trading, closing up 1.91% at 15116.000 points.

• Among the popular Chinese concept stocks, Agora surged nearly 134% and closed up over 79%. OpenAI released a real-time API voice partner, with Agora listed as one of them. Alibaba and Nio rose over 2%, JD.com, Baidu, Pinduoduo, Futu Holdings, Li Auto rose over 4%, XPeng rose over 3%, Bilibili rose nearly 11%, Fangdd Network and Tiger Brokers rose over 29%.
• Other key stocks: 1) Nike fell as much as 8.3% at one point, the largest drop since June 28, and closed down 6.8%. Quarterly revenue fell short of expectations and withdrew full-year performance guidance, delaying Investor Day due to CEO change. 2) Health insurance giant Humana plummeted over 23% and closed down nearly 12%, with the proportion of members choosing its top medical insurance plan dropping sharply by 2025, which may affect revenue in 2026. Competitors CVS Health and UnitedHealth rose over 1%.

Tensions in the Middle East have caused European stocks to fluctuate throughout the day, with the pan-European stock index initially rising by 0.4%, then turning lower and falling by 0.4%, before slightly recovering at the end of the session. Defense stocks rose, and the oil and gas sector followed the rise in oil prices. Among national indices, only the German and Italian stocks closed lower:

• The European STOXX 600 index closed up 0.05% at 521.14 points. The Eurozone STOXX 50 index closed up 0.18% at 4963.29 points. The FTSE All-World 300 index closed up 0.06% at 2063.11 points.

• The German DAX 30 index closed down 0.64%, the French CAC 40 index closed up 0.05%, the Italian FTSE MIB index closed down 0.26%, and the UK FTSE 100 index closed up 0.16% Investors weigh economic and geopolitical prospects, with yields on European and American bonds rising. The long-term bond yields have increased significantly, with the two-year U.S. bond yield rising nearly 4 basis points to approach 3.66%, and the 10-year U.S. bond yield briefly rising 8 basis points and briefly breaking through 3.80% after the unexpected rebound in ADP data release, reaching the highest level in four weeks since September 4th:

• U.S. Bonds: At the close, the yield on the 10-year U.S. benchmark bond rose by 5.50 basis points to 3.7866%, trading in the range of 3.8152%-3.7221% during the session. The two-year U.S. bond yield rose by 3.09 basis points to 3.6352%.

• Eurozone Bonds: At the close, the yield on the 10-year German bond rose by 5.5 basis points to 2.092%, moving away from the lowest level since January set yesterday, trading in the range of 2.116%-2.045% during the day. The two-year German bond yield rose by 2 basis points. The yield on the 10-year UK government bond rose by 8.6 basis points, and the two-year UK bond yield rose by 6.2 basis points.

Positive employment data unexpectedly boosted the U.S. dollar index for the third consecutive day this week, approaching 101.70 and hitting the highest level in nearly three weeks since September 12th. The euro fell for the fourth consecutive day as many officials suppressed the possibility of interest rate hikes. The Japanese yen fell by 2%, breaking through the key levels of 144 to 146 to the lowest level in four weeks, marking the largest decline in over two years. The offshore Chinese yuan slightly declined below 7.03 yuan, erasing gains since last Wednesday:

• U.S. Dollar: The U.S. Dollar Index (DXY) rose by 0.5% to 101.69, also rising by 0.5% yesterday to achieve the largest weekly gain in a week.

• Non-U.S. currencies generally fell: The euro against the U.S. dollar fell by 0.3% to the lowest level since September 12th, having fallen by 0.6% yesterday to mark the largest decline in nearly four months. The British pound against the U.S. dollar fell by 0.3% at one point, hitting a two-week low, having fallen by 1% yesterday.

• Japanese Yen: The Japanese yen against the U.S. dollar fell by about 2%, breaking through the key levels of 144 to 146 to the lowest level in four weeks. The new Prime Minister and the central bank governor are both reducing the possibility of the Bank of Japan raising interest rates again, with analysts at Mitsubishi UFJ Financial Group predicting that investors will rebuild short positions.

• Offshore Chinese Yuan (CNH): The offshore Chinese yuan against the U.S. dollar slightly declined, still below 7.03 yuan, with a decrease of 62 points at the close, trading overall in the range of 7.0061-7.0390 yuan during the session

Cryptocurrency: The escalating tension in the Middle East has dampened risk appetite, with the market's largest leader Bitcoin falling to $60,000 at one point, while the US stock market rose above $61,000 during trading. The second largest Ethereum dropped over 3% to below $2,400, hitting a two-week low. At the New York close, the CME Bitcoin futures main contract was at $61,130.00, down 1.35% from the New York close on Tuesday. The CME Ethereum futures DCR main contract was at $2,394.50, down 4.07% from Monday.

Expectations of OPEC+ production increase offset the impact of the Middle East situation on oil prices, with international oil prices rising and then falling by 0.4%. However, for two consecutive days, US oil prices rose by nearly 4% at one point, breaking through $72, while Brent oil briefly reached $76, the highest in four weeks. However, most of the gains were given back due to OPEC+ maintaining its plan to increase production starting in December and Saudi Arabia's implicit threat of a price war against non-compliant countries:

• US Oil: WTI November crude oil futures closed up $0.27, or 0.39%, at $70.10 per barrel. In early US trading, it rose by as much as $2.65 or 3.6%, breaking through $72, the highest in nearly two weeks since September 19.
• Brent Oil: Brent December crude oil futures closed up $0.34, or 0.46%, at $73.90 per barrel. In early US trading, it rose by as much as $2.58 or 3.5%, briefly reaching $76, the highest in four weeks since September 3.

• On the news front, US EIA crude oil inventories increased by nearly 3.9 million barrels last week, exceeding analysts' expectations of a decrease of 1.3 million barrels and the previous decrease of nearly 4.8 million barrels, indicating weak demand. The OPEC+ Joint Ministerial Monitoring Committee emphasized the importance of achieving full compliance and production compensation at the meeting, with the next meeting scheduled for December 1. Russian Deputy Prime Minister Novak stated that OPEC+ remains committed to the production decision reached earlier in the year-end, and remains optimistic about the global oil demand outlook. Goldman Sachs believes that given the high global idle oil production capacity and limited actual production disruptions, geopolitical risk premiums should remain moderate.
• Natural Gas: NYMEX November natural gas futures fell by 0.35% to $2.8860 per million British thermal units. The European benchmark TTF Dutch natural gas futures fell by over 2% at one point, moving away from recent four-week highs.

Investors are focusing on US economic data, with the upward trend in gold pausing, but silver continuing to rise and at one point rising by 2.8%. Despite the rise in US bond yields and the US dollar, demand prospects have led to a general rise in London metals, with London copper breaking through the psychological $10,000 mark again:

• Gold: COMEX December gold futures closed down 0.48% at $2,677.30 per ounce. Spot gold fell by over $22 or 0.8% to below $2,640, but halved the decline to return above $2,650 by the end of trading

• Silver: COMEX December silver futures rose by 0.99% at the close, to $32.055 per ounce. Spot silver rose by a maximum of 2.8%, briefly breaking through $32, and narrowed its gains to 1% to trade at $31.78 per ounce at the close.
• London Industrial Metals Rise: LME copper futures closed up $106 or 1.1% at $10,084 per ton. LME aluminum futures closed up $30 or 1.1% at $2,678 per ton. LME zinc futures closed up $27 or 0.9% at $3,174 per ton. LME lead futures closed up $42 or about 2% at $2,151 per ton. LME nickel futures closed up $442 or 2.5% at $18,153 per ton. LME tin futures closed up $14 at $33,893 per ton. LME cobalt futures remained flat at $24,300 per ton.

Update before 22:00 on October 2nd

On Wednesday, October 2nd, amid escalating tensions in the Middle East and growing market concerns, major U.S. stock indices opened lower for the second consecutive day, with the Dow falling nearly 100 points at the opening. Chinese concept stocks continued to shine, rising against the market trend, with an initial surge of 5% to the highest level since February 2023.

In key individual stocks, Tesla opened down more than 4% as third-quarter deliveries fell short of market expectations. Nike fell 7.4%, marking its largest decline since June 28, as quarterly earnings fell short of expectations and the company withdrew its full-year performance guidance. Popular Chinese concept stocks continued their upward trend, with Beike rising over 9% and Agora rising over 120%. OpenAI released a real-time API voice partner, with Agora listed, and Agora is a sister company of Agora.

International oil prices rose for the second consecutive day, with a 3% increase on Wednesday. U.S. oil approached $72 again, while Brent oil rose back above $75, as traders feared that Israel's actions could impact Iran's oil industry. Spot gold narrowed its decline to 0.2% at the start of U.S. trading, testing $2,660. Spot silver rose by over 2% intraday, currently trading at $32.18 per ounce.

The U.S. dollar index continued to rise to a near three-week high, trading at 101.46, while Japan's new Prime Minister Fumio Kishida stated that the current economic conditions in Japan do not warrant another rate hike, causing the yen to decline. The USD/JPY exchange rate widened its gains, rising 1.5% intraday to 145.73.

On the news front, U.S. September ADP employment figures rebounded more than expected, with revisions to previous data and a further decrease in wage growth. Following the release of the U.S. ADP data, U.S. bond yields rose, as the market continued to endorse the logic that the Federal Reserve does not need to make significant rate cuts in the next meeting

Below is the previous article

The escalation of geopolitical conflicts has prompted investors to flock to safe-haven assets, causing the Wall Street fear gauge VIX index to rise slightly, intensifying market concerns.

On Wednesday, October 2nd, before the U.S. stock market opened, Chinese concept stocks continued to rise, with Agora surging over 120% pre-market. U.S. stock index futures fell, with S&P 500 index futures down 0.2%, Nasdaq 100 index futures down 0.1%, and Dow Jones index futures down 0.3%.

Traders are awaiting a response to Israel's overnight missile strike on Iran. International crude oil prices continue to rise, with both WTI crude and Brent crude up over 3% intraday, now trading at $72.15 per barrel and $75.81 per barrel, respectively.

Anna Rosenberg, geopolitical director at Mundi Asset Management, told Bloomberg TV, "There is clearly a lot of uncertainty, but I believe the market is still in a manageable state, and the conflict will not escalate into a full-scale war."

• U.S. stock index futures fell, with S&P 500 index futures down 0.2%, Nasdaq 100 index futures down 0.1%, and Dow Jones index futures down 0.3%.
• 10-year U.S. Treasury yield rose by 3 basis points to 3.76%.
• The U.S. dollar remained flat, with the U.S. Dollar Index now at 101.3.
• FTSE China A50 index futures continued to rise during the night session, up over 2%, while Hang Seng Index futures rose by over 1%.
• Popular Chinese concept stocks rose pre-market, with JD.com up over 10% and XPeng up over 9%.
• Agora surged over 120% pre-market, as OpenAI released a public beta of its real-time API today, with voice partners including Agora and Twilio.
• The U.S. dollar strengthened against the Japanese yen in the short term, rising nearly 0.7% intraday to 144.45. Japanese Prime Minister Shizo Abe stated that it is not appropriate to raise interest rates further at the moment.

Traders are awaiting a response to Israel's overnight missile strike on Iran, while international crude oil prices continue to rise, with both WTI crude and Brent crude up over 3% intraday, now trading at $72.15 per barrel and $75.81 per barrel, respectively