On Tuesday, all three major US stock indices closed lower, with the Nasdaq—heavily weighted in tech stocks—falling 1% after lithography giant ASML reported earnings well below expectations, dragging down the entire semiconductor sector.
ASML’s Q3 earnings report was initially scheduled for release on Wednesday morning (US time), but an early leak revealed disappointing results that triggered a sharp selloff in semiconductor stocks. ASML later explained that a technical glitch caused the early disclosure.
The earnings report showed that ASML’s Q3 orders totaled just €2.6 billion, falling far short of the market’s expectation of €5.4 billion. Additionally, the company cut its sales and gross margin forecast for 2025. The disappointing results sparked widespread selling in chip stocks.
By Tuesday’s close, ASML shares had plummeted over 16%, while Nvidia fell more than 4%, and the leveraged semiconductor ETF SOXL dropped over 15%.
ASML CEO Christophe Fouquet commented, “While AI markets continue to show strong growth and potential, recovery in other sectors has been slower than expected. It now appears that recovery will be slower than previously thought, likely extending into 2025, which has led customers to become more cautious.”
On the macroeconomic front, the US New York Manufacturing Index contracted unexpectedly, heightening concerns about the economy. The New York Fed’s October report showed the index dropping from 11.5 in September to -11.9, well below the economists’ median forecast of 3.85, signaling contraction in manufacturing activity.
US Stock
Fundamental Analysis:
Most major tech stocks fell, with Nvidia down over 4%, while Netflix, Microsoft, and Meta all posted small losses. Apple, however, gained over 1%, with Tesla, Google, and Amazon also seeing slight gains. Semiconductor stocks led the declines, with ASML down over 16%, ARM down more than 6%, AMD falling over 5%, and Micron, Broadcom, and Intel all dropping over 3%.
Popular Chinese stocks largely dropped, with the Nasdaq Golden Dragon China Index down 5.92%. Futu Holdings and JD.com both fell over 9%, while Bilibili, Vipshop, and Full Truck Alliance dropped more than 6%. Pinduoduo, Li Auto, iQiyi, Alibaba, and Baidu all fell over 5%, while XPeng fell over 4%, and Weibo, NetEase, and Tencent Music were down over 3%. Nio lost over 2%.
Technical Analysis:
Market Trends:
- Dow Jones: down 324.80 points, or 0.75%, to 42,740.42
- Nasdaq: down 187.10 points, or 1.01%, to 18,315.59
- S&P 500: down 44.59 points, or 0.76%, to 5,815.26
Hong Kong Stock Market
Fundamental Analysis:
The Hong Kong stock market saw broad gains, with the major indices rising. Tech stocks surged, with Meituan up nearly 3%, NetEase up nearly 2%, and Tencent up over 1%, although JD.com dropped more than 2%.
Mainland real estate stocks led the market, with Sunac China surging over 22%, while Chinese brokerage stocks posted strong gains, led by Guotai Junan and Shenwan Hongyuan, both up over 6%. Gold mining stocks also performed well, with Zhaojin Mining and Shandong Gold both rising over 5%.
Liquor stocks rallied shortly before the midday close, with WeiYang Brewery Holdings surging over 34%, Zhenjiu Lidu rising over 4%, and Dynasty Fine Wines gaining nearly 3%. The rally followed an announcement that Hong Kong would reduce the tax on spirits, lowering the tax on the portion exceeding HK$200 of import value from 100% to 10%.
Technical Analysis:
- Hang Seng Index: up 0.90%, to 20,501.77
- Hang Seng Tech Index: up 0.37%, to 4,467.20
- Hang Seng China Enterprises Index: up 1.03%, to 7,353.14
FTSE China A50 Index
Fundamental Analysis:
The A-shares market saw mixed performance in morning trading. By midday, the total market turnover reached ¥912.4 billion, down ¥132.2 billion from the previous session. Over 3,300 stocks were up.
Among sectors, Sichuan-based stocks, real estate, and brain-computer interface companies led the gains, while copper cable and e-commerce stocks slipped into the red.
Sichuan-based stocks soared, with nearly 20 stocks hitting their daily limit, including Ruiqi Intelligent, Dahongli Machinery, Dawning Information, Sinoma Energy Conservation, and Sichuan Shuangma Cement.
Real estate stocks were also strong, with Yangguang Co., Financial Street Holdings, and China Communications Construction all hitting their upper trading limits.
Ahead of a press conference by the State Council on stabilizing the real estate market, the securities and internet finance sectors rallied before midday, with Huaxi Securities hitting its daily limit, while Yintai Securities, Haitong Securities, Guotai Junan, and Winning Software all posted gains.
Technical Analysis:
Market Trends:
- Shanghai Composite Index: up 0.40%, to 3,214.01
- Shenzhen Component Index: down 0.51%, to 10,014.74
- ChiNext Index: down 1.41%, to 2,056.56
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