U.S. stocks closed higher on Friday, with the technology sector leading the gains. Both the Dow Jones Industrial Average (DJIA) and the S&P 500 set new records. Out of the past 14 weeks, the U.S. stock market has witnessed gains in 13 weeks.

The January non-farm payroll data in the U.S. reduced market expectations of a Federal Reserve interest rate cut. Investors are also digesting earnings reports from tech giants such as Apple, Amazon, and Meta, with Meta’s stock surging over 20% to reach a historic high.

According to the FedWatch tool from the Chicago Mercantile Exchange Group, traders estimate a 20% probability of a rate cut at the March Federal Reserve meeting. The probability of a rate cut in May decreased from 92% before the data release to 78%. The market anticipates approximately five interest rate cuts by the Federal Reserve this year.

Lindsay Rosner, an analyst at Goldman Sachs Asset Management, noted that the strong January labor market data in the U.S. makes it reasonable for Chairman Jerome Powell to “shatter” expectations of a rate cut in March. Rosner emphasized caution and patience in the market regarding rate cuts, particularly as December wage growth was revised upward.

U.S. Stock Market

Fundamental Analysis: 

Most popular Chinese stocks saw declines, with the Nasdaq Golden Dragon China Index falling by 1.62%. Bilibili dropped over 4%, while XPeng, Ideal Auto, and Beike fell by nearly 3%. Tencent Music, Netease, and Baidu declined by over 2%, and JD.com and Pinduoduo fell by over 1%. Alibaba, Kingsoft Cloud, and iQiyi followed the downward trend. New Oriental rose over 4%, and Hesai gained over 3%, while NetEase Youdao increased by over 1%.

Several large-cap tech stocks experienced gains, with Meta surging over 20%. The company announced a $50 billion stock buyback and its first-ever dividend of $0.50 per share, leading Bernstein to raise its target price to $535.

Amazon rose nearly 8%, NVIDIA gained close to 5%, AMD increased over 4%, and TSMC and Broadcom rose over 2%. Microsoft gained nearly 2%, and Google-Class A increased by nearly 1%. Apple declined by over 0.50%, reporting a revenue of $20.819 billion in Greater China for the last fiscal quarter, a nearly 14% YoY decrease. Tesla and Netflix saw slight declines. Meta, NVIDIA, and Microsoft reached new closing highs.

Technical Analysis:   

(S&P 500 Index, 1-day chart) 

Market Trends: 

• Dow rose by 134.58 points (0.35%) to 38,654.42.
• Nasdaq increased by 267.31 points (1.74%) to 15,628.95.
• S&P 500 rose by 52.42 points (1.07%) to 4,958.61.

Hong Kong Stock Market

Fundamental Analysis: 

All three major Hong Kong indices initially rose but later experienced a pullback. In the tech sector, trends were mixed, with Meituan rising over 2% and Kuaishou gaining over 1%, while Tencent declined by over 0.5%. Xiaomi and Alibaba followed the downward trend.

Most stocks related to the pharmaceutical Ming series saw gains, with WuXi AppTec rising over 7%. Education stocks surged against the trend, with New Oriental gaining over 8%. Gold-related stocks collectively faced a significant decline, with Zhaojin Mining falling over 6%.

Technical Analysis:  

(Hang Seng Index, 1-day chart) 

Market Trends: 

• Hang Seng Index declined by 0.15% to 15,510.42.
• Hang Seng Tech Index fell by 0.21% to 3,037.50.
• State-owned Enterprises Index increased by 0.01% to 5,219.73.

FTSE China A50 Index

Fundamental Analysis: 

In the A-share market, all three major indices opened lower. After an initial uptick, the market experienced a downward trend. The Shanghai Composite Index fell below 2700 points and briefly dropped over 3%, while the Shenzhen Component Index and the ChiNext Index both dropped by over 4%.

All three indices collectively refreshed new lows, with the Shanghai Composite Index reaching 2635.09 points, the lowest since February 2019. The number of limit-down stocks in the market surpassed 1000 at one point, with a partial rebound observed in the morning.

Across sectors, there was an overall decline, with relatively smaller drops observed in banking, insurance, airports, securities, and the coal industry. Sectors with larger declines included engineering consulting services, software development, plastic products, internet services, environmental protection, and education.

Technical Analysis: 

(SSE Composite Index, 1-day chart) 

Market Trends: 

• Shanghai Composite Index fell by 1.82% to 2680.47.
• Shenzhen Component Index declined by 2.28% to 7872.08.
• ChiNext Index dropped by 1.7% to 1524.07.
• Science and Technology Innovation 50 Index fell by 3.37% to 650.71.

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