At the close, the Dow rose 243.73 points, or 0.60%, to 41198.21, while the Nasdaq fell 512.42 points, or 2.77%, to 17996.92, and the S&P 500 index fell 78.93 points, or 1.39%, to 5588.27.
According to the Futu Securities App, on Wednesday, three major indices closed mixed, with the Dow reaching a historic high, the Nasdaq tumbling 2.77% and the Nasdaq 100 falling 2.94%, marking the largest single-day drop since December 2022. Goldman Sachs warns that the S&P 500 index is starting to adjust and advises investors not to buy the dip. The Federal Reserve's Beige Book stated that the economy grew slightly and inflation cooled off.
At the close, the Dow rose 243.73 points, or 0.60%, to 41198.21, while the Nasdaq fell 512.42 points, or 2.77%, to 17996.92, and the S&P 500 index fell 78.93 points, or 1.39%, to 5588.27. Chip stocks fell, with Nvidia (NVDA.US) down 6.62%, Tesla (TSLA.US) down 3.14%, Meta Platforms (META.US) down 5.68%, and Apple (AAPL.US) down 2.53%.
Major European stock indices were mixed, with the German DAX 30 index down 0.44%, the UK FTSE 100 index up 0.28%, the France CAC 40 index down 0.12%, and the Euro Stoxx 50 index down 1.14%.
In Asia Pacific stock markets, the Nikkei 225 index fell 0.43%, the Jakarta Composite index fell 0.02%, and the Vietnam VN30 index rose 0.16%.
COMEX August gold futures fell 0.43% to $2,457.3 per ounce at the close, while COMEX September silver futures fell 3.4% to $30.39 per ounce.
Bitcoin fell more than 1% to $64,329.5 per coin, and Ethereum fell more than 1% to $3,412.56 per coin.
New York Mercantile Exchange's August delivery of West Texas Intermediate (WTI) crude oil futures rose $2.09, or more than 2.52%, to $82.85 per barrel, breaking away from the low closing price since June 17.
Most London metals fell, with London copper down $28 to $9,635 per tonne, London aluminum down $4 to $2,402 per tonne, London zinc down nearly 1.32% to $2,848 per tonne, London nickel down $137 to $16,457 per tonne, and London tin down $221 to $32,950 per tonne, while London lead rose $6 to $2,190 per tonne.
Macro news
The Federal Reserve's Beige Book stated that the US economy grew slightly in the third quarter, with activity remaining flat or declining in some districts. According to a report released on Wednesday, employment also increased only slightly. Labor mobility declined, and several districts' business contacts expected to be more selective in their hiring and not fill all vacant positions. The latest Beige Book was compiled by the Richmond Federal Reserve Bank based on information collected through July 8 or earlier. Most districts saw modest or moderate wage growth, but overall price increases were modest. Consumer spending was almost unchanged, with almost every district mentioning retailers discounting or consumers only buying essential items.
Federal Reserve Board member Lael Brainard says rate cuts are "getting closer." Brainard said on Wednesday that a rate cut by the Federal Reserve is "getting closer," but the uncertainty of economic trends makes it unclear when interest rates might be lowered. "I believe the current data is consistent with a 'soft landing,' and I will look for data that supports this view in the coming months," Brainard said. He added, "Although I do not believe we have reached our ultimate goal, I do believe that we are getting closer to the point where we have reasonable grounds to reduce policy rates." Brainard noted that economic growth is currently moving forward at a "more modest pace", the job market is more balanced, and inflation has eased somewhat. He said the "most optimistic" scenario was a significant but not high probability of a steady decline in inflationary pressures, which could lead to a rate cut in the near future. But Brainard said the more likely scenario was a more uneven decline in inflation, which would raise uncertainties about whether we would sustain our 2% target. "In this situation, the uncertainty about the near-term rate cut is greater," he said. The least likely but still possible scenario is a rise in inflation, which he did not link to monetary policy.
The number of single-family housing starts in the United States fell in June. Single-family housing starts in the United States continued to decline in June, but may rebound in the coming months as optimism about the Fed's interest rate cut in September heats up. US Department of Commerce data shows that single-family housing starts fell 2.2% month-on-month in June, adjusted for seasonal factors to an annual rate of 0.98 million units. Single-family housing starts account for the majority of housing construction. Future building permits for single-family homes fell 2.3% to 0.934 million units. However, single-family home starts in June increased by 5.4% year-on-year. For most of last year and the first quarter of 2024, strong housing construction performance was due to a lack of second-hand housing in the market.
Goldman Sachs: Global hedge funds cut exposure to US stocks for five consecutive days. Goldman Sachs said in a report on Wednesday that global hedge funds have reduced their exposure to US stocks for five consecutive days as large-cap tech stocks have generally fallen. The stocks sold off by the hedge funds over the past five trading days were the highest since November 2022 and close to the five-year record high. In addition, the report pointed out that hedge funds sold US technology stocks on seven of the past eight trading days. Goldman Sachs said that the information technology industry led the way in risk reduction, followed by the industrial, healthcare, non-essential consumer goods, and communications services industries.
The US Treasury postponed repo operations due to technical issues. The US Treasury Department said it would delay bond repurchases originally scheduled for Wednesday due to technical issues. The Treasury Department said in an email statement that the original repurchase plan would be implemented on Thursday, July 18. The Treasury Department launched a new bond repurchase program this year, originally designed to repurchase up to $2 billion of bonds with maturities of 3-5 years on Wednesday. A spokesperson said the technical issue was related to the TreasuryDirect system, which has been resolved, but did not provide more details on the issue. TreasuryDirect is the Treasury Department's online platform where investors can directly buy and sell securities from the US government.
Biden: Will consider dropping out if health becomes a problem. According to The New York Times, President Biden said in a recent interview that he would reassess whether to continue presidential campaign if his doctor directly informed him of health problems. This comment is the latest in a series of repeated explanations of why he might consider dropping out. Biden also said for the first time that he originally wanted to "leave" the presidency and hand it over to someone else, but he decided to run again because he believed that his "wisdom" and experience would help bridge the country's increasingly divisive gap.
[Individual stock news]
Meta(META.US) will not offer new multimodal AI models in the EU. Meta said in a statement that it will release a multimodal Llama model in the coming months, but it will not be available in the EU due to unpredictable regulatory environments. This move has laid the groundwork for Meta's showdown with EU regulators and underscores the growing trend of US tech giants refusing to provide products to European customers. Just last month, Apple also announced that it would not release its Apple Intelligence feature in Europe due to regulatory considerations. It is reported that Meta is planning to use its new multimodal model in a variety of products, including smart phones and Meta Ray-Ban smart glasses, which can reason between video, audio, images, and text. Meta said the decision means that European companies will not be able to use multimodal models, although these models are released under an open license.
"Wood Sister": Robotaxi will be a major catalyst, driving Tesla (TSLA.US) stock up 10 times. Cathie Wood, founder of Ark Invest, said that Tesla's self-driving taxi platform will be a catalyst for its stock to rise about 10 times, repeating her bullish view of Tesla's business for years. Wood described the autonomous taxi ecosystem as an "$8 trillion to $10 trillion global revenue opportunity" and believed that platform providers, including Tesla, could take up to half of it. She said that investors are no longer valuing Tesla purely as an electric vehicle manufacturer and beginning to factor in the potential of autonomous taxi services. "The autonomous taxi platform is the largest artificial intelligence project under development today," she said. Wood added that Ark's valuation of Tesla is mainly based on its autonomous driving potential. "If our view is correct, there is still considerable potential for the stock price."
Bank review:
Barclays: Lowered Baidu's (BIDU.US) target price from $133 to $125.
Evercore ISI: Lowered Starbucks' (SBUX.US) target price from $92 to $80 and downgraded its rating from "outperform" to "in line".
