Market analysis for July 11th.

US inflation cooled down across the board, with a monthly decline in CPI in June for the first time in four years, and the year-on-year growth rate of core CPI reaching its lowest point in over three years. These data points have ignited market expectations of a possible interest rate cut in September. With the easing of inflation, the market expects the Federal Reserve to potentially start cutting interest rates in September.

The S&P 500 and Nasdaq indexes ended their seven-day winning streak and retraced from their highest point. Nasdaq fell by nearly 2%, with technology stocks facing significant selling pressure. Tesla tumbled 8.4%, ending its 11-day winning streak and delivering its worst performance in almost six months. Nvidia also dropped 5.6%, and chip stocks as a whole fell 3.5%.

At the same time, there has been a significant shift in market style, with the Nasdaq 100 plunging while small-cap indexes soaring, showing the largest market divergence since January 2021. In the small-cap sector, the Russell 2000 index rose by 3.6%, delivering its best performance since November last year and reaching a two-and-a-half-year high.

In the real estate sector, the worst-performing sector this year has seen the largest increase in this round of market adjustments. Regional bank stocks rose by more than 4%, and Chinese concept stocks also performed strongly, rising by over 2%. JD.com increased by about 7%, while Xpeng increased by over 8%.

In the bond market, US Treasury yields fell sharply across the board, and the US dollar index recorded its largest single-day decline in two months. At the same time, the yen strengthened and rose by up to 2.6%, marking the largest increase since the end of 2022. The Japanese government confirmed that it is conducting exchange rate interventions to support the currency. Gold and silver prices also rose significantly, benefiting from increased safe-haven demand and the weakness of the US dollar.

In the Asian market, driven by expectations of interest rate cuts, Asian stock markets generally rose. The Nikkei 225 closed above 42,000 points for the first time, and the stock markets in South Korea and Taiwan also reached historic highs. In China, the Shanghai Composite Index rose by 1%, with nearly 5,000 A-share stocks recording gains. The small-cap index rose by 4%. These developments indicate that global markets are sensitive to US inflation data and potential policy adjustments by the Federal Reserve, and market volatility is expected to continue.

Zoom online sharing session registration link:

MY Moomoo account opening link🔗

Zongheng Da Ma galloping in the United States 2.0 offline sharing session (Johor Bahru, Selangor)