Market Recap
On Tuesday, US equities ended lower as investors looked ahead to Nvidia’s quarterly earnings later this week and the release of the PCE Price Index.
Last Friday, Fed Chair Jerome Powell hinted that the Federal Reserve could ease policy before inflation fully returns to target, given signs of a softening labor market.
Powell’s dovish tone has led markets to price in an 84% probability of a 25-basis-point rate cut in September, with cumulative cuts of at least 100 basis points by mid-2025—bringing rates down to 3.25%-3.5%.
Daniel Murray, CEO of EFG Asset Management, commented: “The road ahead isn’t smooth. While monetary easing is usually welcomed by markets, the broader macro and corporate environment still carries significant uncertainty.”
On the stock front, investors are closely watching Nvidia’s earnings report due after Wednesday’s close. Traders hope the results will ease concerns about AI investment and confirm that the recent US equity rally is not merely a tech-driven bubble.
Market expectations suggest Nvidia’s EPS will surge 48%, with revenue reaching $45.9 billion. Options pricing indicates a potential 6% move in either direction—a significant swing given Nvidia’s $4 trillion market capitalization, which could have a major impact on the broader market.
US Stocks
Mega-cap tech stocks saw mixed performance. Nvidia, Netflix, Google, and Tesla gained over 1%, while Intel fell more than 1%. Amazon, Meta, Apple, and Microsoft posted modest losses.
Most Chinese ADRs advanced, with the Nasdaq Golden Dragon China Index up 0.11%. DouYu and Sohu climbed over 3%, NetEase and Gaotu gained nearly 3%, Baidu rose more than 2%, and Alibaba advanced over 1%. Solar stocks outperformed, with Daqo New Energy up more than 4%, Canadian Solar rising nearly 3%, and JinkoSolar gaining over 1%.
US Market – Technical Analysis
US Market Snapshot
- Dow Jones: -349.27 points (-0.77%) to 45,282.47
- Nasdaq: -47.24 points (-0.22%) to 21,449.29
- S&P 500: -27.59 points (-0.43%) to 6,439.32
Hong Kong Stocks
Hong Kong’s major indexes ended mixed. Among sectors, tech names were mixed, with NetEase up nearly 1%, while Bilibili, Alibaba, and Meituan fell more than 1%.
Gold miners rallied, with China Gold jumping over 7%. Apple-related names rose, led by Lens Technology up more than 4%. Auto stocks diverged: Great Wall Motor surged over 4%, while NIO slumped more than 5%. Biopharma lagged, with Innovent Biologics down 4%. Newly listed Shuangdeng Co. soared over 31% on debut.
The rally in gold stocks followed Powell’s dovish signals at the Jackson Hole symposium on August 22. ICBC Credit Suisse noted that expectations of a September rate cut could drive nominal rates lower while inflation expectations rebound—pushing real rates down and supporting gold prices.
Hong Kong Market – Technical Analysis
Hong Kong Market Snapshot
- Hang Seng Index: -0.22% at 25,773.56
- Hang Seng Tech Index: +0.27% at 5,840.71
- China Enterprises Index: -0.11% at 9,237.89
A50 & A-Shares
Mainland China’s major indexes opened lower but rebounded into positive territory by midday. Combined turnover on the Shanghai and Shenzhen exchanges reached RMB 1.68 trillion, down RMB 398.3 billion from the previous session. Market sentiment was broad-based, with over 3,300 stocks advancing.
Sector Highlights
- Gaming stocks surged, with 37 Interactive Entertainment hitting the daily limit.
- Huawei Ascend concept names were active, led by Talkweb Information hitting the limit-up.
- AI computing stocks stayed strong, with Cambridge Technology also hitting the limit-up.
China Market – Technical Analysis
China Market Snapshot
- Shanghai Composite: +0.11% at 3,888
- Shenzhen Component: +0.73% at 12,532.51
- ChiNext Index: +0.21% at 2,768.76
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