The three major indices of US stock reviews plummeted by more than 1%; technology stocks and AI concept stocks generally fell, and US regional bank stocks fell sharply, and investors waited for the Federal Reserve's decision.

Steven000 wrote a column · May 2, 2023 22:01

US stocks collectively closed down more than 1%, small-cap stocks fell more than 2%, technology and AI concept stocks fell sharply, and US regional bank stocks fell sharply

The three major indices of US stock reviews plummeted by more than 1%; technology stocks and AI concept stocks generally fell, and US regional bank stocks fell ...

Current expectations of the Federal Reserve's interest rate hike, economic data cooling, debt ceiling fears, and the specter of the banking crisis still exist, all depress market risk appetite. After opening low on Tuesday, US stocks fell sharply lower. The overall decline was more than 1% within an hour of opening, and Russell's small-cap stocks fell more than 2% to lead the decline.

$Dow Jones Industrial Average(.DJI.US)$ The deepest drop was over 610 points or 1.8%, falling below the 34,000 point integer. $S&P 500 Index(.SPX.US)$ The deepest drop was 1.9%. At one point, it fell below 4,100 points, and the energy and financial sectors performed the worst. $Nasdaq Composite Index(.IXIC.US)$ The deepest drop was nearly 200 points or 1.6%. $Invesco QQQ Trust(QQQ.US)$ It fell 1.4%.

At the end of the session, the decline in US stocks narrowed slightly. They still collectively closed down more than 1% and all fell for two consecutive days. The S&P, Dow, NASDAQ, and NASDAQ 100 all erased all gains since last Thursday. $Ishares Russell 2000 Value Etf(IWN.US)$ Shares fell to their lowest level in nearly six weeks since March 23:

The S&P 500 closed down 48.29 points, or 1.16%, to 4119.58 points. The Dow closed down 367.17 points, or 1.08%, to 33684.53 points. The NASDAQ closed down 132.09 points, or 1.08%, to 12080.51 points. The NASDAQ 100 fell 0.9%, and the Russell 2000 Index fell 2.1%.

All major S&P sectors closed down almost across the board, and bank-related funds fell sharply, only $Consumer Discretionary Select Sector SPDR Fund(XLY.US)$ A slight increase of 0.10%. $Energy Select Sector SPDR Fund(XLE.US)$ fell 4.30%, $Financial Select Sector SPDR Fund(XLF.US)$ fell 2.30%, $The Communication Services Select Sector SPDR® Fund(XLC.US)$ fell 1.85%, $Real Estate Select Sector Spdr Fund (The)(XLRE.US)$ fell 1.71%, $Utilities Select Sector SPDR Fund(XLU.US)$ fell 1.22%, $Industrial Select Sector SPDR Fund(XLI.US)$ It fell 1.04%. $Consumer Staples Select Sector SPDR Fund(XLP.US)$ ， $The Health Care Select Sector SPDR® Fund(XLV.US)$ ， $The Technology Select Sector SPDR® Fund(XLK.US)$ ， $Materials Select Sector SPDR ETF(XLB.US)$ They fell 0.27%, 0.43%, and 0.97%, respectively.

Star tech stocks generally fell, only $Amazon(AMZN.US)$ It rose 1.6% to break from its lowest level in nearly three weeks. “metaverse” $Meta Platforms(META.US)$ It fell 1.6%, stopping four days of continuous gains and falling below the highest level since the end of January last year. $Apple(AAPL.US)$ It fell 0.6% and is still not far from a new high of more than eight months. $Microsoft(MSFT.US)$ It turned down at the end of the session and is still not far from a 13-month high. $Netflix(NFLX.US)$ It fell 2% to its lowest level in nearly six weeks. $Alphabet-A(GOOGL.US)$ A drop of nearly 2%, $Tesla(TSLA.US)$ It fell close to 1%.

The majority of chip stocks fell. $PHLX Semiconductor Index(.SOX.US)$ It fell 0.7%, fell below 3,000 points, stopped rising for four days, and fell to a new high for a week and a half. $NVIDIA(NVDA.US)$ It fell more than 2%, stopped rising for four days, and fell to the highest level since January last year. $Intel(INTC.US)$ It fell nearly 2%, but $Advanced Micro Devices(AMD.US)$ After falling 1.8%, it turned up. It continued to rise for five to a week and a half. The financial report was favorable $NXP Semiconductors(NXPI.US)$ Up more than 3% to the highest in nearly two weeks

AI concept stocks plummeted. $C3.ai(AI.US)$ It fell more than 7% to a new three-month low, and fell by more than 49% in the past month. $SoundHound AI(SOUN.US)$ It fell more than 7% to a new low in nearly a week. $BigBear.ai Holdings(BBAI.US)$ It fell nearly 12% and fell below a two-week high.

Bank stocks fell sharply. $KBW Nasdaq Bank Index(.BKX.US)$ fell nearly 4.5%, the lowest since October 2020; SPDR S&P Regional Bank ETF (KRE) $Spdr Series Trust S&P Regional Bkg Etf(KRE.US)$ It fell more than 6%, the lowest since November 2020.

Among large banks, $JPMorgan(JPM.US)$ fell 1.6%, $Bank of America(BAC.US)$ Decreased by 3%, $Wells Fargo & Co(WFC.US)$ It will drop nearly 4% and lay off 3,000 employees $Morgan Stanley(MS.US)$ It fell nearly 2%. A number of regional bank stocks plummeted and melted, and Westpac United Bank $PacWest Bancorp(PACW.US)$ At one point, it fell 42% to a record low, and closed down nearly 28%, the lowest since March 2009; $Western Alliance Bancorp(WAL.US)$ The deepest drop of more than 27% was the biggest drop since March 13, and the closing drop was more than 15% to its lowest level in three weeks. According to the news, the New York Stock Exchange will begin the First Republic Bank delisting process.

Important Market News

The government-led bank rescue operation before the Federal Reserve discussed interest rates failed to reassure the market
Gold rose slightly, and traders studied the First Republic Bank rescue operation led by the US government before the Federal Reserve is expected to raise interest rates again this week. Last month, J.P. Morgan agreed to buy the company after First Republic Bank led to the collapse of the second-largest bank in US history. However, this move failed to fully allay market concerns about further economic impact. As a result, US Treasury yields declined, while gold, a safe-haven investment, rose 0.4% at one point.
The number of vacancies in the US in March hit its lowest level in nearly two years, and the labor market showed signs of cooling

According to a survey of job vacancies and labor mobility released by the Department of Labor on Tuesday, the number of job vacancies fell for the third month in a row, falling from nearly 10 million last month to 9.59 million, the lowest level in nearly two years, and lower than the median expectations of economists surveyed by Bloomberg.

World Economic Forum: The rise of AI will reduce the number of jobs by 14 million in the next 5 years

According to the latest report released by the World Economic Forum (WEF), the global employment situation will be severely impacted in the next few years due to factors such as artificial intelligence (AI) and slowing economic growth. The World Economic Forum predicts in its “Job Prospects Report” that nearly a quarter of the world's jobs will change, some will be eliminated, and others will be created. It is worth noting that by 2027, 69 million new jobs will be added globally, and 83 million jobs will disappear during the same period, or a net reduction of 14 million jobs, which is equivalent to a net reduction of 2% of current global jobs.

The US debt ceiling issue is imminent, and the possibility of reaching a short-term solution is rising

To avoid the risk of a disastrous US debt default, Washington had only 7 days to discuss in May, highlighting the huge threat posed by the continuing standoff between the two parties.

From now until June 1, the date the Treasury may run out of cash, judging from the schedule, US President Joe Biden and members of the Senate and House of Representatives will both be in Washington for 7 days, which is equivalent to a full week.

Biden could cancel his trip to Japan to attend the G7 summit. But even so, there is very little time left, and it is unlikely that the two parties will reach a major compromise before the potential default date proposed by US Treasury Secretary Yellen on Monday.

US regional bank stocks issued a warning to the Federal Reserve. The probability that the Fed will raise interest rates has dropped to around 80%

Adam Button, an analyst at the financial website Forexlive, said that earlier today, the Reserve Bank of Australia unexpectedly raised interest rates, which has already made the market worry about whether the agreed surprise will appear at this week's FOMC meeting. Meanwhile, during the US market trading session, after the two US economic data were released, US regional bank stocks also sent a strong signal to the Federal Reserve to act cautiously. The stock prices of some banks fell 30% during the day, and the KRE Regional Bank Index fell 7%, triggering a broader safe-haven wave. The Federal Reserve interest rate swap shows that the possibility that the Fed will raise interest rates this week has dropped to 82% from close to 100% yesterday. Furthermore, the possibility that the Federal Reserve will raise interest rates further in June has dropped below 0, and the market currently expects the federal funds rate to fall to 4.39% by the end of the year.

Important company news

ChatGPT is killing our business! The stock price of the leading online education company in the US fell by one day
Chegg, a well-known American online education company, said ChatGPT is hurting its business growth. The company's stock price fell one day during the intraday session on Tuesday. Company CEO Dan Rosensweig said during the latest earnings call, “Earlier this year, we didn't see ChatGPT having a significant impact on our new user growth, and we met expectations in terms of newly registered users. Since March, however, we've seen a sharp rise in student interest in ChatGPT. We now think it's having an impact on our new user growth.”

The Apple version of Cash Register is popular, absorbing nearly 1 billion US dollars in deposits in four days

The impressive 4.15% annual yield of Apple's high-yield savings accounts, combined with the popularity of iPhones, may be the main driving force for opening accounts and attracting deposits—especially when the current average interest rate on bank deposits in the US is less than 0.5%. However, it is worth noting that the funds in Apple's high-yield savings account cannot exceed 250,000 US dollars, which is also the FDIC deposit insurance limit.

Microsoft plans to launch its own cloud service version of ChatGPT, which is 10 times the price of the regular version

According to two people familiar with the matter, later this quarter, Microsoft's Azure cloud server division plans to sell a version of ChatGPT running on a dedicated cloud server. The data for this version will be stored separately from other customers' data. People familiar with the matter said this was done to reassure customers that their secrets won't be leaked to ChatGPT's main system. But it comes at a cost: one of the people familiar with the matter said that the product could cost 10 times as much as customers currently use the regular version of ChatGPT.

Hindenburg made another move and this time he is targeting the “Wolf King of Wall Street”

On Tuesday EST, Hindenburg Research, a well-known American shorting agency, released a report saying that the company valuation of billionaire Carl Icahn's company was seriously overestimated. On the same day, Ican Corporation's stock price plummeted by nearly 27% during the intraday period, falling back to its lowest level in three years. Hindenburg claims that he is shorting Ikam because the company is clearly overvalued, and more importantly, Icahn's company relies on a “Ponzi scheme” structure to pay dividends. Simply put, Hindenburg accuses Icahn's company of always “tearing down the east wall to make up the western wall” and using new investors' money to pay interest and short-term returns to old investors in order to create the illusion of making money.

After a 9% drop in revenue in the first quarter, this quarter was even weaker! AMD's guidance was poor, falling more than 6% after the market

After old rival Intel announced record quarterly losses last week, the world's second-largest computer processor manufacturer and American chip giant AMD was also clearly impacted by the continued downturn in the personal computer (PC) market. Surprisingly to the market, AMD's guidance was even weaker this quarter, highlighting how difficult the situation is for chip makers at a time when PC sales have declined sharply.

First-quarter results show that sales of AMD's embedded product business, where Xilinx (Xilinx) is located, continued to soar, but sales of data centers, one of the growth engines and main business, have slowed more than expected. Some commentators say that in addition to PCs, another challenge facing AMD is that leading cloud service companies are now focusing on purchasing equipment for artificial intelligence (AI) jobs, and AI is an area where AMD is just beginning to get involved. After the financial report was announced, AMD's stock price, which closed up nearly 0.3% on Tuesday, quickly fell after the market, falling by more than 6%.

Uber's profit in the first quarter exceeded expectations, its market share expanded, and its stock price surged by more than 11%

Before the US stock market on Tuesday, May 2, a well-known American online car-hailing company $Uber Technologies(UBER.US)$ Announces its results for the first quarter of 2023. In the first quarter, Uber's total reservation volume was US$31.4 billion, an increase of 19% over the previous year, including online car-hailing, food delivery, and delivery. The total reservation amount for the first quarter was slightly lower than the market forecast of US$31.5 billion due to a decline in freight reservations. During the reporting period, the company's revenue was US$8.8 billion, up 29% year on year; net loss attributable to the company was US$157 million; adjusted profit before interest and tax was US$761 million, up US$593 million year on year, higher than market expectations of US$678.6 million; adjusted profit margin before interest and tax was 2.4%, up 0.6 percentage points year on year.

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