Market Analysis on April 2nd

Today is April 2nd. The strong performance of the US ISM manufacturing data last night temporarily dampened market expectations of the Fed's interest rate cut, causing some volatility in the US stock market. In this context, the S&P 500 and Dow Jones industrial average fell back, moving away from the previous closing record highs, while the Nasdaq Composite Index almost recorded a second consecutive day of decline.

Google's stock price rose against the market trend, hitting a historical high, while Tesla and Nvidia both erased most of their declines during the trading session and closed flat. At the same time, chip indexes continued to rise, with Micron Technology seeing an increase of over 5% during trading. However, after Trump Media's financial report was released, the stock price plummeted by over 21%, wiping out all gains since going public.

From an industry perspective, the rotation pattern in the US stock market is beginning to show, challenging the leadership position of technology stocks, while cyclical industries such as energy and finance performed well in the first quarter, demonstrating a significant improvement in market breadth. Bank of America's analysis pointed out that if the Fed does not cut interest rates, US government debt interest expenses could soar to $1.6 trillion, becoming the government's largest expenditure item.

After the US ISM manufacturing index was released, US bond yields jumped, and the US Dollar Index also rose significantly, reaching over a four-month high. The publication of this data not only affected the stock market but also impacted the bond and forex markets, causing the yen and bitcoin to decline, while crude oil and gold saw fluctuations.

In the Chinese market, driven by the strong impact of domestic manufacturing PMI, A-shares surged significantly, with the three major indexes opening high and rising. Chinese concept stocks listed in the US also showed strong performance, starting the second quarter with a good performance, outperforming the large cap. Meanwhile, offshore renminbi experienced a decline during trading, falling below the level of 7.26.

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