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China's probe into Nvidia could be a buying opportunity as Nvidia's down 7%. China facing stocks surge. PDD +10.5%. YINN ETF +23%. BHP, Albemarle, Lynas surge
From YouTube
US tech stocks were dragged down by China's probe into Nvidia, but everything and anything that could benefit from new Chinese stimulus roars up
The Nasdaq fell 0.6%, and the S&P 500 fell by 0.6% from their record all-time high. Tech stocks, telcos, and cruise lines fell the most, while copper stocks such as Freeport-McMoRan $Freeport-McMoRan (FCX.US)$ and lithium giant Albemarle $Albemarle (ALB.US)$ rose 4%.
But what’s ahead for the broad market? And the Nasdaq? This week’s release of US CPI figures could give the Federal Reserve room to cut rates if inflation is slower than expected. If that happens, the market will probably rally, as falling inflation and rate cuts are good for stocks. But right now, investors want to keep their profits in case we get disappointing data. When China announced its probe into Nvidia $NVIDIA (NVDA.US)$, sending the chipmaker's shares down 2.6%, it acted as a catalyst for investors to take profits from this year’s winners.
China's probe into Nvidia could be a buying opportunity as Nvidia's down 7%.
So with Nvidia $NVIDIA (NVDA.US)$ —it’s the third day its shares came under pressure. Its shares are now down 7% from their November high. Every pullback Nvidia has had, investors bought into, and its shares rebounded. There’s a good reason for this: 40% of its clients are major tech companies like Microsoft $Microsoft (MSFT.US)$ , Amazon $Amazon (AMZN.US)$, Meta $Meta Platforms (META.US)$, and Google $Alphabet-C (GOOG.US)$ . While Nvidia also sells chips to Chinese companies like Tencent $TENCENT (00700.HK)$ , the majority of Nvidia’s clients are US companies. So, a Chinese probe won’t impact Nvidia’s core earnings. So what's next for Nvidia?
Nvidia's MACD technical indicator is not yet seeming to flag that buying could pick up, and the RSI is not indicating the stock is oversold. So you might expect a little more profit-taking from the pin-up stock before buying likely drives its shares back up. Keep an eye on the popular traded ETF at moomoo, NVDL $GraniteShares 2x Long NVDA Daily ETF (NVDL.US)$ —it’s trading up 382% this year. It’s 3-times leveraged to Nvidia moving up. Also watch NVD $GraniteShares 2x Short NVDA Daily ETF (NVD.US)$ —it’s a 2x short ETF that makes money when Nvidia falls.
China facing stocks surge. PDD +10.5%. YINN ETF +23%. BHP, Albemarle surge
As for stocks on the move up, stocks and sectors expected to benefit from China’s incoming economic support have newfound support. Chinese stocks listed in the US, like PDD $PDD Holdings (PDD.US)$, rose 10.5%, while Baidu $Baidu (BIDU.US)$ rose 7.8%. Commodity stocks broke higher too. While YINN $YINN rose 24%. It's a popular traded ETF at moomoo—it gives investors 3-times exposure to China’s 50 Index, the 50 largest and most liquid public Chinese companies on the Hong Kong Stock Exchange. The technical indicators suggest the ETF could move higher as it gapped up and appears about to cross the MACD line, indicating that new buyers, quants, and technical traders could start to buy soon.
So for Aussies—it’s time to consider what this means to you. New stimulus in 2025 will likely support the Aussie share market—China pledged to do more to bolster growth. That will likely drive the ASX higher.
We’ve seen prices of all key metals spiking, and it pushed up Rio Tinto $Rio Tinto (RIO.US)$ and BHP $BHP Group Ltd (BHP.US)$ by 4.5% in the US as copper prices rose 0.5% and iron ore gained almost 3%. Other commodity stocks are expected to win, such as lithium miners. The lithium giant Albemarle $Albemarle (ALB.US)$ was a standout in the S&P 500 overnight, rising 4%, which could signal lithium stocks could come back in vogue.
And finally, just considering rare earths—they power everything electronic and are a key component of semiconductor chips. China signalled it could cut back on production of rare earths and ban shipments to the US. Such a trade war would impact inflation. But it would probably push Australia’s Lynas Rare Earths higher. Lynas $Lynas Rare Earths Ltd (LYC.AU)$ $LYNAS RARE EARTHS LTD SPON ADR EACH REP 1 ORD SHS (LYSDY.US)$ rose 3% in the US overnight, and it looks like it’s attempting to break higher on the ASX.
Earlier today at 8.40am, I was on Ausbiz talking about what happened in the US overnight, what to watch today on the ASX and why you'd expect commodity stocks to head higher on new China stimulus and WATCH the open: ASX to open higher on China stimulus optimism on ausbiz
Disclaimer: Moomoo Technologies Inc. is providing this content for information and educational use only.
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Jessica Amir
Moomoo Official Market Strategist
moomoo, market strategist.
Seen/heard on Fox News Business, ABC, SBS, Reuters wires.
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Buy n Die Together❤ :
Nisdey : China's probe is just well timed posturing to try and get some leverage over Trump before he takes office.
Nobody still believes that TSMC aren't involved in some kind of back door shenanigans with the CCP.
This is just a distraction until Trump imposes tariffs and some kind of ChinVidia pops up with a breakthrough AI accelerator.
It's all well and good to design the things, but if you can't make them domestically, and your government taxes the sh*t out of the only place that can, it's all a bit pointless isn't it. And why isn't Intel doing anything at all to close the gap? Where are the industrial espionage agents learning how to replicate what is obviously a solved problem, using the very same machines they have access to. It just doesn't seem that hard to do, especially when all the odds are skewed in your favour. It's not as if the laws of physics are somehow different in Taiwan.