On Wednesday, U.S. stocks saw a decline, led by the technology sector. The 10-year U.S. Treasury bond yield reached a 16-year high.  

The market closely monitored geopolitical risks and U.S. corporate earnings. 

The Federal Reserve’s Beige Book indicated that prices continued to rise moderately, and economic growth showed signs of slight fatigue. 

In September, the U.S. Consumer Price Index (CPI) increased by 3.7% year-on-year, slightly surpassing the expected 3.6% and maintaining the previous rate of 3.7%.  

The core CPI, which excludes volatile food and energy prices, rose by 4.1% year-on-year, marking the lowest increase since 2021 and aligning with expectations, following a previous rate of 4.3%. 

These figures indicate that, although U.S. inflation has somewhat moderated from its peak, it still remains distant from the Fed’s 2% target. 

This could potentially lead the Federal Reserve to maintain high-interest rates for an extended period. 

U.S. Stocks 

Fundamental Analysis: 

Most major tech stocks declined, with Google, Tesla, and Meta falling by over 1%.  

Charging station, coking coal, and non-ferrous metals sectors led the decline, with ChargePoint falling by over 5%. U.S. Aluminum Corporation, Newco Steel, Blink Charging, and EVgo all falling by over 4%.  

Meanwhile, lithium batteries, semiconductor equipment, and digital music sectors saw gains, with ConTech Technology and Livent rising by over 4%.  

Broadcom, KLA, U.S. Yabao, and Chilean Mining & Chemicals all rising by over 3%. Sony also increased by over 1%. 

Banking stocks faced a collective decline, with major banks like Morgan Stanley and Goldman Sachs falling by over 1%. Bank of America and JPMorgan Chase saw marginal declines, while Wells Fargo saw a slight increase.  

Novo Nordisk increased by over 1%, reaching a historic high after preliminary evidence suggested that its drug Ozempic was effective in treating kidney failure in diabetes patients. 

Popular Chinese stocks experienced significant declines, with the Nasdaq Golden Dragon China Index falling by over 3%.  

JD.com fell by over 8%, TAL Education by over 7%, NIO, Weibo by over 5%, and iQiyi, Bilibili, Vipshop, Baidu, and XPeng Motors all falling by over 4%. 

Futu Holdings, Alibaba, Pinduoduo, Ideal Auto, and Manbang Group also fell by over 2%, while NetEase and Tencent Music saw a decrease of over 1%. 

Technical Analysis:   

(S&P 500 Index, 1-day chart) 

Market Trends: 

• Dow Jones Industrial Average fell by 173.73 points, a 0.51% decrease, closing at 33,631.14 points. 
• Nasdaq Composite Index (Nasdaq) declined by 85.46 points, a 0.63% decrease, closing at 13,574.22 points. 
• S&P 500 Index dropped by 27.34 points, a 0.62% decrease, closing at 4,349.61 points. 

Hong Kong Stocks 

In today’s Hong Kong stock market, core technology stocks saw declines, with JD Group and Baidu Group falling by over 5%, Meituan dropping by over 3%, and Xiaomi and Kuaishou both increasing by over 1%.  

Real estate stocks generally declined, with China Evergrande falling by nearly 4%.  

Insurance stocks underperformed, with China Life Insurance dropping by over 5%.  

Chinese brokerage stocks collectively fell, with CITIC Securities declining by over 3%. 

Automotive stocks had the most significant declines, with XPeng Motors and NIO falling by over 8%.  

According to a report by Morgan Stanley, concerns about industry competition and profit margins in the third and fourth quarters have triggered recent sell-offs of XPeng Motors stocks.  

However, the bank believes that these concerns are excessive. Morgan Stanley notes that the recent pullback provides a buying opportunity.  

While investors remain concerned about the macroeconomic outlook on the mainland and increased competition from technology companies like Huawei, the fact that XPeng’s stock price has fallen back to pre-Volkswagen investment levels reflects ongoing operational improvements. 

XPeng’s continued execution in G6/G9 deliveries is key to restoring market confidence. 

Technical Analysis:  

(Hang Seng Index, 1-day chart) 

Market Trends: 

• Hang Seng Index (HSI) declined by 1.95%, closing at 17,386.75 points. 
• Hang Seng Tech Index (HSTECH) decreased by 1.86%, closing at 3,701.60 points. 
• Hang Seng China Enterprises Index (HSCEI) dropped by 1.99%, closing at 5,954.64 points. 

FTSE China A50 Index 

Fundamental Analysis: 

On October 19th, the three major A-share indexes opened low, with the Shanghai Composite Index and Shenzhen Component Index both falling by over 1%.  

On the market, there was a relative differentiation between large and small-cap stocks. The Shanghai 50 Index fell by nearly 2%, while the CSI 1000 Index resisted the decline. 

Regarding industry sectors, semiconductor, electronic chemicals, aerospace, real estate services, electronic components, education, and securities saw gains.  

Automotive manufacturing, mining, insurance, pharmaceuticals, traditional Chinese medicine, and banking sectors faced the most significant declines. 

Technical Analysis: 

(SSE Composite Index, 1-day chart) 

Market Trends: 

• Shanghai Composite Index (SHCOMP) fell by 1.21%, closing at 3,021.55 points. 
• Shenzhen Component Index (SZCOMP) declined by 1.09%, closing at 9,709.46 points. 
• ChiNext Index (CHINEXT) dropped by 0.79%, closing at 1,923.11 points. 
• SSE STAR Market 50 Index (SSE50) increased by 0.22%, closing at 871.68 points. 

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