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US stocks collectively fell by about 1%, with Chinese concept stocks rebounding in a V-shape, US bond yields rising above 4%, and oil prices rising by nearly 4%.
USA stocks and bonds both fell, with the Dow down 400 points, Tesla down 3.7%, Nvidia up over 2%, Chinese concept stocks fell nearly 3% before closing higher, Alibaba and Tencent ADRs rose 2.6%, Li Auto Inc. rose over 4%. The two-year US treasury yield rose nearly 10 basis points, breaking above 4% for the first time since August for both the 2-year and 10-year treasury yields, with the US dollar hovering at a seven-week high since August 16. Brent crude oil closed above $80, reaching a six-week high along with WTI oil climbing above $77. Silver briefly fell more than 2.4%.
After the unexpectedly strong non-farm data, bond traders are preparing to deal with the scenario of the US economy not landing.
The unexpectedly strong September non-farm employment report in the USA has led to a sharp rise in US bond yields, making the 'no landing' scenario once again a hot topic in the bond market. The 'no landing' scenario is constraining the Fed's room for interest rate cuts, further dampening the buying frenzy for US bonds.
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Under the tide of Fed rate cuts, U.S. stocks are bullish to lead the way for the whole year, while U.S. bonds and the U.S. dollar are being neglected!
With the continuous rate cuts by the Federal Reserve, most respondents predict that the performance of the US stock market for the remaining time this year will surpass the government and corporate bonds market.