On Wednesday, all three major US stocks indices closed lower, with the Nasdaq falling back after reaching a new record high earlier in the session. Shares of “AI darling” Super Micro Computer tumbled 32% following EY’s resignation as its auditor. Market focus has now shifted to upcoming tech earnings and the increasingly close U.S. presidential election.

Several significant U.S. economic indicators were released overnight, offering mixed results. Third-quarter GDP grew at an annualized rate of 2.8%, just under the forecasted 3%, but consumer spending rose at the fastest pace in a year and a half. Additionally, October’s ADP employment report showed 233,000 new jobs, with hiring hitting a 13-month high, indicating stronger-than-expected labor market conditions.

As the U.S. election and the Federal Reserve’s November policy meeting approach, each newly released economic data point has the market on edge, seeking trends for the near future. The CME FedWatch tool now shows a 96.1% probability of a 25 basis-point rate cut in November, with a 3.9% chance that rates will remain unchanged.

In election-related developments, betting site Polymarket’s odds significantly favor a Trump victory over Harris. UBS CEO Sergio Ermotti commented, “The market is currently pricing in a Trump win. Should Harris pull off a victory, positions betting on Trump may be reconsidered, potentially sparking a market shift.”

US Stocks Highlights

Super Micro Computer (“AI darling”) plunged 32% on Wednesday, followed by an additional 2% decline in after-hours trading. Reports indicate that EY stepped down as its auditor due to governance and transparency concerns.

Tech giant earnings continued to stir the market post-close. Microsoft exceeded Q3 expectations, with shares initially up over 2% but later dropping 3.7% after a disappointing outlook for next quarter, citing slowing cloud revenue growth, declining margins, and rising expenses. Meta also saw a post-market decline of more than 3%, despite exceeding profit expectations for Q3; the company anticipates a substantial increase in AI infrastructure spending next year.

US Stocks

Fundamental Analysis: 

Major tech stocks showed mixed results: Nvidia and Apple dropped over 1%, while Alphabet rose by more than 2% as its cloud revenue increased 35% year-over-year. Chip and semiconductor stocks led losses, with Super Micro Computer down over 32%, AMD falling over 10% on disappointing Q4 revenue guidance, and Qualcomm, ASML, and Micron each declining by more than 4%.

“Trump stocks” weakened, with Trump Media & Technology Group down more than 22%, Phunware off over 14%, and Rumble declining by over 8%. Eli Lilly dropped more than 6% after reporting Q3 revenue below expectations.

Most popular Chinese stocks also declined, as the Nasdaq Golden Dragon China Index dropped nearly 1%. Nio fell over 4%, Pinduoduo more than 3%, and JD.com and XPeng both dropped over 2%, with Baidu, Tencent Music, and Alibaba down over 1%. Exceptions included New Oriental and Li Auto, which rose over 1%, while TAL Education gained more than 3%.

Technical Analysis: 

Market Trends: 

• Dow Jones: -91.51 points, -0.22%, closing at 42,141.54
• Nasdaq: -104.82 points, -0.56%, closing at 18,607.93
• S&P 500: -19.25 points, -0.33%, closing at 5,813.67

Hong Kong Stock Market

Fundamental Analysis: 

Hong Kong’s indices all posted gains, with technology stocks mostly up—Xiaomi rose over 3%, while Baidu, JD.com, and Meituan each gained nearly 1%. Property stocks were among the best performers, led by China Jinmao, which rose more than 11%. Solar stocks also surged, with Flat Glass up over 8% amid hopes for a quicker pace in photovoltaic base construction.

Chinese brokerage stocks showed strength, with Hongye Futures up more than 10%. Eighteen listed securities firms have now reported Q3 results, with an average net profit growth of 46.17% compared to last year.

Technical Analysis: 

• Hang Seng Index: +0.47%, closing at 20,476.42
• Hang Seng Tech Index: +0.88%, closing at 4,553.36
• Hang Seng China Enterprises Index: +0.57%, closing at 7,328.12

FTSE China A50 Index

Fundamental Analysis: 

Chinese A-shares rallied in early trading, with all three major indices closing higher by midday. Morning trading saw total market turnover reach 14.07 trillion yuan, an increase of 196.4 billion yuan from the previous day, as over 3,400 stocks posted gains.

Sector-wise, gains were led by diversified finance, photovoltaic equipment, and real estate stocks, while precious metals and China Shipbuilding stocks fell. Solar stocks were particularly active, with Shuangliang Eco-Energy, GCL-Poly, and Sungrow Power each hitting limit-up. A major new policy push for renewable energy development, particularly in desert areas, appears to be boosting these stocks.

Technical Analysis: 

Market Trends: 

• Shanghai Composite Index: +0.36%, at 3,278.04
• Shenzhen Component Index:+0.90%, at 10,625.33
• ChiNext Index: +1.40%, at 2,181.53

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