U.S. markets closed lower on Thursday, with disappointing earnings from Meta and Caterpillar raising concerns about corporate profit outlooks. This occurred amid data showing increased inflation pressures and a slowing economy in the first quarter.  

Following the GDP data release, U.S. 10-year Treasury yields surged to a five-month high of over 4.7%. 

Meta Platforms’ shares plummeted by more than 10% at market close. The company’s second-quarter revenue guidance disappointed investors.  

CEO Mark Zuckerberg’s remarks during the earnings call suggested that AI investments would take a long time to yield returns, heightening concerns about the monetization prospects of AI technology. 

Thierry Wizman, a global FX and rates strategist at Macquarie, commented, “Despite the past nine months of intense focus on generative AI, Meta failed to meet its first-quarter revenue growth forecasts. This has raised doubts about how easily this technology can be monetized, contrary to management’s suggestions to traders.” 

U.S. Stocks

Fundamental Analysis: 

Large tech stocks displayed mixed performance. Meta’s shares plummeted over 10%, wiping out approximately $130 billion in market value.

Although Meta surpassed Q1 performance expectations, its Q2 revenue forecast disappointed investors and the company predicted a significant rise in capital expenditures for the year.  

IBM’s shares fell more than 8%, Microsoft dropped over 2%, and both Google and Amazon declined by more than 1%. Meanwhile, Tesla saw a near 5% increase, Nvidia surged over 3%, and both Netflix and Intel enjoyed gains of more than 1%. 

The performance of Chinese concept stocks was also mixed. The Nasdaq Golden Dragon China Index rose by 0.75%.  

Tencent Music and JD.com each advanced over 1%, while Baidu, Alibaba, and NetEase made modest gains. However, Bilibili, Li Auto, Futu Holdings, Pinduoduo, and Weibo each declined more than 1%, with NIO and Vipshop experiencing slight drops. 

Technical Analysis: 

(S&P 500 Index, 1-day chart) 

Market Trends: 

• Nasdaq dropped 100.99 points, or 0.64%, to 15,611.76. 
• Dow fell 375.12 points, or 0.98%, to 38,085.80. 
• S&P 500 declined 23.21 points, or 0.46%, to 5,048.42. 

Hong Kong Stock Market

Fundamental Analysis: 

The three major Hong Kong indices continued their upward trajectory.  

In the tech sector, substantial gains were noted, with JD.com climbing nearly 5%, Xiaomi advancing over 4%, and Meituan rising more than 3%.  

In the brokerage segment, Guolian Securities led with a significant surge of over 15%, following its announcement to acquire Minsheng Securities through an A-share offering.  

Photovoltaic stocks also performed exceptionally well, with Fuyao Glass leading the charge with a more than 13% increase post-earnings. 

Oil stocks were also notably active, particularly CNOOC, which rose over 4% after announcing its first-quarter results for 2024.  

The company reported a 14.1% year-over-year increase in operating revenue, reaching RMB 111.468 billion, and a 23.7% rise in net profit attributable to the parent company, totaling RMB 39.719 billion. Basic earnings per share were reported at RMB 0.84. 

Technical Analysis: 

(Hang Seng Index, 1-day chart) 

Market Trends: 

• Hang Seng Index (HSI) rose 1.99%, to 17,627.73. 
• Hang Seng Tech Index (HSTECH) increased 3.66%, to 3,684.23. 
• Hang Seng China Enterprises Index (HSCEI.) went up 2.41%, to 6,267.95. 

FTSE China A50 Index

Fundamental Analysis: 

The A-share major indices uniformly rose, with AI concept stocks, real estate, and brokerage sectors experiencing significant gains. 

In sector performance, quantum technology, Sora, computing power, and CPO sectors led the gains, while banks, ports, coal, and steel sectors faced the largest declines. 

Technical Analysis:  

(SSE Composite Index, 1-day chart) 

Market Trends: 

• Shanghai Composite Index (SHCOMP) up 0.79%, to 3,076.92. 
• Shenzhen Component Index (SZCOMP) up 1.51%, to 9,404.83. 
• ChiNext Index (CHINEXT) up 2.54%, to 1,809.55. 
• SSE Sci-Tech Innovation 50 Index down 2.10%, to 748.75. 

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