Good morning, let us first take a look at the international markets.
Over the past night and into this morning, US tech stocks, gold, and silver all experienced sharp declines, while oil prices surged. At the close, WTI crude oil futures rose 2.39%, and Brent crude oil futures climbed more than 4%. London spot gold fell more than 2%, and London spot silver dropped more than 5%. COMEX gold futures declined 2.66%, and COMEX silver futures tumbled 5.34%.
On the US equity front, the Dow Jones edged up 0.02%, the Nasdaq plunged 2.6%, and the S&P 500 dropped 1.21%. Popular tech stocks fell broadly, with semiconductors, memory, and chip names leading the declines. The Philadelphia Semiconductor Index closed down 6.72%, with Lam Research dropping over 11%, SpaceX and KLA Corporation falling more than 9%, and SanDisk, SK Hynix, Intel, and AMD each declining more than 8%.
Panic also spread to the interest rate market, with US Treasuries seeing heavy buying. The 10-year Treasury yield plunged more than 15 basis points in a single day, briefly breaking below 5.00% to hit a one-month low.
On the news front, Yemen's Houthi armed group issued a statement on the afternoon of the 22nd local time, claiming that over the past 48 hours it had launched four military operations against targets inside Saudi Arabia, using ballistic missiles and drones to strike the Saudi Defense Ministry building, King Fahd International Airport, Saudi Aramco's Yanbu facilities, and Abha International Airport. The statement said the first operation targeted the Defense Ministry building in the Saudi capital Riyadh; the second targeted King Fahd International Airport in Dammam, with the Houthis claiming the attack disrupted air traffic at the airport; the third targeted Saudi Aramco-related facilities in Yanbu, with the Houthis saying the strike caused a fire at the site; and the fourth targeted Abha International Airport. The Houthis claimed all four operations hit their targets.
The statement described the operations as a response to Saudi Arabia's recent military escalation. The Houthis said that over the past 100 days, Saudi Arabia had launched more than 2,900 airstrikes and missile attacks, causing 562 casualties, most of them women and children. The Houthis also warned that if Saudi Arabia carries out its threats against Yemeni tribal forces, it will face catastrophic and unpredictable consequences. The statement said the Houthis will take "major actions they previously were unwilling to take" and demanded that Saudi Arabia bear all consequences arising from them.
On the same day, Iran's Revolutionary Guard Navy said that from the night of the 21st to the 22nd, three vessels attempting to illegally pass through the Strait of Hormuz struck mines and caught fire, while another four vessels illegally transporting oil in the northern Persian Gulf were hit and set ablaze. Iran's Revolutionary Guard Navy warned the United States that if Washington continues to encourage ships to navigate routes where mines have been laid, Iran's response could extend to US military bases in the region.
Bloomberg noted that Thursday's market performance was not simply a reversal of the AI trade narrative; the more prominent feature was risk-asset selling driven by safe-haven sentiment. Intraday, the Nasdaq 100 fell more than 3% at one point, while the S&P 500 actually rose 0.2%, indicating that selling was concentrated in large-cap growth stocks such as tech giants. Meanwhile, falling US Treasury yields also reflected investors shifting toward safe-haven assets. Joseph Saluzzi, partner and co-head of equity trading at Themis Trading, said: "It feels like a risk-off day, and tech stocks are always the first to get hit. Bonds rising confirms that the market is adopting a safe-haven strategy. Investors are worried that the Iran war could escalate after the midterm elections and last longer than expected."
Putin: Willing to Restart Russia-US-Ukraine Talks
On October 22 local time, Russian President Vladimir Putin gave an interview to Russian media regarding his meeting with US Special Envoy Witkoff the previous day. Putin said Russia is willing to resume trilateral contacts among Russia, the United States, and Ukraine, and that the topic of the talks should be "how to thoroughly resolve the security issues of Ukraine and Russia after ending the conflict and reaching a final peace agreement." Putin also disclosed that the US side believes the overall European security framework also needs to be discussed, and he expressed agreement with that view. Russian presidential aide Ushakov had said on October 21 that Putin told Witkoff during their meeting that day that Russia is prepared to restart Russia-US-Ukraine trilateral talks in mid-November, with the theme involving the construction of a Russia-Ukraine security system after the conflict ends.
Analysts: Two Bearish Drivers Push Gold and Silver Prices Lower
Recently, the precious metals sector has declined across the board. Yesterday, the main Shanghai gold futures contract fell 0.97% to close at 881.46 yuan per gram, while the main Shanghai silver futures contract dropped 2.96% to close at 13,608 yuan per kilogram. According to Cong Shanshan, a precious metals analyst at Huishang Futures, the core drivers of this round of precious metals correction are rising expectations of Federal Reserve rate hikes and concentrated deleveraging by long positions. As US employment and inflation data have continued to strengthen, the market has repriced the scenario of "higher rates for longer," real US Treasury yields have risen, and the dollar has strengthened. As non-yielding assets, precious metals face higher holding costs, constituting a common bearish factor for the sector. In addition, the earlier geopolitical risk premium has gradually faded, and weakening expectations for industrial demand have further amplified the decline in silver prices.
"World Gold Council data show that global gold ETF holdings increased by 67 tons in September, while net long positions held by managed funds in COMEX gold fell by about 84 tons, indicating that this round of declines reflects a rapid contraction of risk exposure on the futures side, while long-term allocation demand has not retreated in tandem. Overall, the reversal in the macroeconomic rate environment and trading-related deleveraging are the main reasons for this deep drop in precious metals prices," said Wu Zijie, a precious metals researcher at Jinrui Futures Research Institute.
By product, silver prices fell significantly more than gold. "The divergence in performance is essentially due to differences in the weighting of financial attributes versus industrial attributes, with fundamentals amplifying price elasticity," Cong said. Gold is mainly driven by monetary and reserve attributes, and with continued central bank gold purchases providing support and ample market liquidity, it is relatively resilient. Silver has both financial and industrial attributes, with industrial demand from photovoltaics and electronics accounting for a relatively high share. As expectations for photovoltaic and manufacturing demand weaken, price volatility is significantly greater than that of gold.
"Overall, the deterioration in the financial environment determines the common direction of this round of precious metals sector adjustment, while differences in market liquidity, investment structure, and industrial demand expectations determine the extent of the pullback for each product," Wu said.
In interviews, reporters learned that in the short term, marginal changes in the dollar index and US Treasury yields will dominate precious metals price movements, while the October Federal Reserve policy meeting and international oil prices are the main factors affecting those variables.
"Currently, the market expects the Federal Reserve to hold steady in October, while expectations for a December rate hike remain relatively strong. Therefore, the impact of the October Fed meeting may be limited; more important is the Fed Chair's post-meeting remarks on the subsequent inflation situation and the rate path. If the Fed Chair's remarks further strengthen rate hike expectations, the precious metals sector will still face adjustment pressure," Wu said.
Wu believes that the Middle East situation and oil prices remain important variables affecting inflation expectations. If oil prices rise further and push US Treasury yields higher, precious metals may continue to come under pressure; if oil prices fall back and rate hike expectations cool marginally, gold prices are expected to stabilize first, and silver prices may also stage a recovery.
"Overall, after the previous sharp adjustment, there is still room for a technical rebound in precious metals prices, but whether the rally can be sustained depends on the subsequent direction of US Treasury yields and the dollar index," Wu said.
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