To The Moon

U.S. stock indices initially rose across the board but collectively turned negative, with small-cap stocks leading the declines. The tech-heavy Nasdaq initially surged over 1% before falling more than 0.2%. The Russell 2000 small-cap index recorded the most significant drop, plunging over 1% after rising more than 0.4%. Most of the "FANG stocks" gave back some of their gains after early increases. Tesla's gains expanded to over 6%, while Nvidia, after climbing more than 2.8%, fell over 1.1%. Semiconductor and AI concept stocks mainly rose in early trading but then plummeted, with Chinese concept stocks showing mixed results. XPeng's shares dropped over 3.2%, while Zeekr gained over 3.5%.

On Monday, July 29, the U.S. indices started positively but quickly reversed course, with small-cap stocks leading the way down.

The technology-heavy Nasdaq briefly rose above 1% before decreasing more than 0.2%; the S&P 500 initially climbed over 0.5% before dropping more than 0.1%; the Russell 2000 small-cap index rose more than 0.4% before diving more than 1%; and the Dow Jones, closely tied to economic cycles, jumped nearly 0.23% and then fell nearly 0.5%.

Early in the session, major industry ETFs exhibited mixed performance. The semiconductor ETF rose nearly 2%, while the consumer discretionary ETF gained over 1%, but regional bank and energy sector ETFs fell nearly 1%.

Most of the "FANG stocks" initially rose before retracing some of their gains. Tesla increased by over 6%, Nvidia's gains halved after exceeding 2.8%, Apple rose over 0.6% before slightly dipping, Google "A" surged more than 1.8%, and Meta related to the "metaverse" rose over 1.2% before retreating. Microsoft's gains expanded over 1.6% before giving back more than half, and Amazon climbed over 1.1% before its increase was halved.

Most semiconductor stocks initially increased but later plunged. The Philadelphia Semiconductor Index, the SOXX industry ETF, and Nvidia's double-leveraged ETF all rose more than 2.4%, nearly 2.4%, and almost 5.5% respectively, only to halve those gains.

Among popular semiconductor stocks, ON Semiconductor surged more than 13.3%, ASML rose over 1.1% but fell more than 1.2% afterwards, Lam Research and Applied Materials both saw gains over 2.8% which were then halved, Qualcomm rose over 1.3% and then declined by more than 0.1%, TSMC increased over 0.6% only to drop by over 0.7%, Broadcom rose over 2% before dipping more than 0.3%, Arm Holdings surged over 0.4% before plummeting over 2.9%, AMD rose over 3% and its gains were cut in half, while Intel dipped over 0.6% and then increased over 0.3% only to turn negative again.

Most AI concept stocks surged before dramatically dropping. Serve Robotics, a 2.0 version Nvidia concept stock, briefly soared over 22%, CrowdStrike climbed over 3.5%, while SoundHound, another Nvidia concept stock, rose over 2.1% only to fall more than 4%. BigBear.ai increased over 4% and then declined more than 3.3%.

Chinese concept stocks showed mixed results, with the NASDAQ Golden Dragon China Index gaining nearly 0.4% before falling over 0.2%. Pinduoduo fell over 2.8%, XPeng dropped over 3.2%, while Zeekr rose over 3.5%. NetEase dipped over 2.2%, Baidu gained over 1.4%, Alibaba rose over 3.6%, and Bilibili increased more than 1.3%.

On the news front, the US dollar index's gains narrowed to 0.25%, settling at 104.573 points. After the Dallas Fed’s manufacturing activity index for July was released at 22:30 Beijing time, it briefly reached a daily high of 104.752 points. According to media reports, the Dallas Fed survey results present downside risks for the US ISM (Manufacturing/Non-Manufacturing) index in July.

Below are earlier updates from Wall Street Journal:

Market expectations for a Federal Reserve interest rate cut have increased. Following a collective rise in Asian-Pacific stock markets today, all three major US stock indices opened higher, with most semiconductor stocks experiencing gains, and tech stocks, including the "Seven Sisters," also following suit.

In the coming days, monetary policy decisions from the US, Japan, and the UK will be in focus. Additionally, this week, Microsoft, Apple, Amazon, and Meta will release their earnings reports.

At the start of trading, the three major US indices climbed collectively, with the Nasdaq up 0.51%, the S&P 500 up 0.38%, and the Dow Jones up 0.22%.

Most star tech stocks saw gains, with Tesla rising nearly 4%. Reports indicate that Tesla has replaced Ford as Morgan Stanley's preferred US automotive stock.

As the second quarter earnings season approaches, Microsoft rose 0.85% in premarket trading, while Meta was up 0.86%. Popular Chinese concept stocks had mixed performances; Alibaba gained over 2%, while Pinduoduo dropped more than 1%.

Digital currency-related stocks broadly rose, with cryptocurrency exchange Coinbase up over 3% and Marathon Digital surging more than 5%.

[Market update at 21:00]

As of publication, US stock index futures continued to climb, with Nasdaq futures up 0.84%.

ARM's premarket trading saw a drop of nearly 2%, after HSBC downgraded its rating to "hold," with the company set to release its second-quarter earnings this week.

McDonald's experienced a premarket drop of over 1.7%, as its second-quarter revenue fell short of market expectations.

[Market update at 16:00]

US stock index futures were up, with gains in the semiconductor and blockchain sectors. The Dow futures rose 0.23%, the S&P 500 gained 0.33%, and the Nasdaq 100 futures increased by 0.53%.

Popular Chinese concept stocks displayed mixed results, with Pinduoduo briefly dropping over 3%, XPeng down over 1%, while JD and Baidu showed slight increases. Alibaba's premarket trading saw gains of over 3%. Notably, its subsidiaries Taobao and Tmall made extensive adjustments to merchant regulations on July 26, which will entail a basic software service fee of 0.6% of the transactional price for each order.

Semiconductor stocks broadly increased; Nvidia, TSMC, and Tesla were all up more than 1%, with AMD rising 0.94%, while Apple and Microsoft also gained.

Digital currency stocks saw widespread increases, with Coinbase rising over 4%.

Philips posted over a 10% gain in premarket trading after its adjusted EBITA for the second quarter exceeded market forecasts. However, Abbott’s stock fell nearly 5% following a US court ruling that it must pay $95 million in damages in a case involving premature infant formula and an additional $400 million in punitive damages.

European stocks showed mixed results, with Heineken dropping as much as 7.4%. Major European indices experienced varied movements; Germany's DAX 30 edged slightly higher, the UK’s FTSE 100 was up 0.81%, while France’s CAC 40 and the STOXX Europe 50 indices declined.

Heineken recorded an impairment of €874 million ($949 million) and saw its stock drop 7.4% in Amsterdam earlier in the day. The company cited a decline in the valuation of its stake in China Resources Beer and mentioned that weakness in the US market has cast a shadow on its outlook. In 2018, Heineken acquired a 40% stake in China Resources Beer for $3.1 billion, leveraging its vast distribution network to gain a stronger foothold in the crowded Chinese market and expand into the premium beer segment.

Spot gold and crude oil prices fluctuated slightly, while the yield on Japanese ten-year government bonds approached a two-week low.

The yield on Japan's ten-year government bonds fell over 3 basis points during the day, settling at 1.027%, amid reports that the Bank of Japan is expected to cut its bond