Increasing Uncertainty in Risk Assets: Stay Alert to Market Fluctuations! [Learn Premium Weekly Review]

🌐Multiple Down Days: Signs of a Weakening U.S. Stock Market?

Over the weekend, Iran launched an attack on Israel, further escalating tensions in the Middle East and adding to the woes of the already faltering U.S. stock market due to anticipated interest rate cuts!

This week, sentiment in the U.S. stock market is heavily bearish, driven by economic data released this week pointing to robust economic and inflation figures, such as the 0.7% month-over-month increase in U.S. retail data for March, beating the expected 0.4%. On the other hand, comments from several Federal Reserve members, including Powell, have highlighted persistent inflation exceeding expectations, leading to a shift in the Fed’s outlook. They believe that maintaining higher interest rates for a longer period is more appropriate.

The combination of hawkish signals and escalating regional conflicts has led to an increase in safe-haven assets like gold and energy, putting pressure on the broader market.

Many analysts believe the U.S. stock market may undergo a prolonged period of adjustment. For investors, this means not only needing to pay attention to your stop-loss and take-profit plans but also considering diversifying the assets as a way to mitigate risk.

🔥 US Stocks Q1 Earnings: Chip Sector Faces Challenging Kickoff!

After facing pressure from weakened interest rate cut expectations and geopolitical uncertainties, investors turned their attention to Q1 corporate earnings reports. Hopes were high that positive corporate earnings and growth forecasts would clear the gloom over the stock market, but the outcomes were somewhat disappointing.

Driven by AI, U.S. stocks soared in 2023, drawing keen market attention to AI-related stocks, particularly chip stocks.

Both companies saw their stock prices fall sharply after releasing their earnings reports, dragging down the semiconductor sector. This was also related to high expectations. The market had anticipated that the demand for AI chips would quickly ripple through to semiconductor leaders ASML and TSMC, leading to the possibility that their stock prices had already factored in these high expectations. However, ASML's report revealed that AI demand did not contribute significantly to growth, and although TSMC's performance was boosted by AI demand, it wasn't to an impressive extent, leading to a substantial price correction for both.

Adding to this, the overarching macroeconomic uncertainties mean the adjustment in the AI sector could continue for some time. However, investors should keep an eye on Nvidia's earnings report, as it might be the key factor determining the direction of the AI sector.

📝 Premium Learn Technical Tracking

The nerve center of the tech sector, NVIDIA, has recently underperformed against expectations. The share price has fallen below the level before this year's GTC event and has entered the considered correction territory. A pullback for recovery or a shift to the bear market? Find the answer in this week's Technical Tracking!

📝 Premium Learn Opportunity Mining

The energy industry is experiencing unprecedented growth opportunities on the wave of AI. Are You Ready for it? Vistra Energy, the top U.S. electric provider, surged by over 96% since the start of the year! In this week's Opportunity Mining, let's talk about the investment logic in “Power Generation Stocks” and where their opportunities lie.