Market Overview

On Thursday, US markets closed higher on Wednesday, with the Dow Jones rising over 300 points for the second consecutive session. Investors largely shrugged off trade war tensions that had pressured markets earlier in the week. However, Alphabet and AMD saw sharp declines, limiting the Nasdaq’s gains. Meanwhile, the US January ISM Services Index fell, reinforcing expectations for a Federal Reserve rate cut.

Alphabet (Google parent company) plunged 7.3% after reporting weaker-than-expected Q4 revenue. The company’s AI-related spending surged, but disappointing cloud revenue raised concerns about the timeline for monetizing its AI investments.

AMD fell 6.3%, after reporting lower-than-expected Q4 data center revenue.

Apple posted a slight decline amid reports that Chinese regulators are considering a formal investigation into its App Store fees and policies, which could further escalate US-China tech tensions.

Savita Subramanian, Head of US Equity Quantitative Strategy at Bank of America, commented:

“For these mega-cap tech firms, investing or not investing presents a dilemma—massive spending is necessary to stay competitive, but that spending also erodes cash flow.”

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US Markets Highlights

• Mixed Performance in Big Tech:
  • Nvidia: Surged 5%, reclaiming a $3 trillion market cap.
  • Netflix, Intel: Gained over 1%.
  • Microsoft, Meta: Posted modest gains.
  • Alphabet (Google): Plunged 7%+.
  • AMD: Dropped 6%+.
  • Tesla: Fell over 3%.
  • Amazon: Declined over 2%.
  • Apple: Slightly lower.
• Notable Declines:
  • The New York Times fell nearly 12%, marking its biggest drop since March 2020.
• Chinese ADRs Decline:
  • The Nasdaq Golden Dragon China Index fell 2.26%.
  • Baidu, NIO: Dropped over 4%.
  • Li Auto, Pinduoduo, JD.com, Alibaba: Down over 3%.
  • XPeng Motors: Fell over 2%.

Technical Analysis of US Markets

Market Snapshot

• Dow Jones: +317.24 points (+0.71%), closing at 44,873.28.
• Nasdaq: +38.31 points (+0.19%), closing at 19,692.33.
• S&P 500: +23.60 points (+0.39%), closing at 6,061.47.

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Hong Kong Markets Highlights

Hong Kong stocks rebounded after early losses:

• Mixed Performance in Tech Stocks:
  • Xiaomi: Rose over 1%.
  • Baidu: Dropped over 2%.
  • Meituan: Fell over 1%.
• AI Stocks Strengthened:
  • Kingsoft Cloud surged nearly 8%.
• Apple Supplier Stocks Led Gains:
  • Cowell e Holdings rose nearly 10%.
• Semiconductors Remain Strong:
  • SMIC gained nearly 6%.
• Sectors with Gains:
  • Biotech, pharmaceutical outsourcing, and Chinese brokerage stocks.

AI Sector Outlook:
Goldman Sachs’ latest report highlighted that the rise of DeepSeek signals a shift in AI development from hardware to software applications. This trend challenges US tech dominance while diversifying global AI growth opportunities, particularly benefiting Chinese tech stocks.

Technical Analysis of Hong Kong Market

Market Snapshot

• Hang Seng Index: +0.29%, closing at 20,655.94.
• Hang Seng Tech Index: +0.95%, closing at 4,977.22.
• China Enterprises Index: +0.29%, closing at 7,587.96.

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A50 & China A-Share Markets Highlights

A-shares opened higher and continued upward momentum:

• Total Market Turnover: ¥954.9 billion.
• Market Breadth:
  • 4,111 stocks gained.
  • 1,111 stocks declined.
  • 244 stocks remained unchanged.

Top Performing Sectors:

• Variable frequency drives, SOC chips, ball screws, lithium battery components, XR perception, robotic motors, stamping molds, servo systems, ByteDance hardware, Tesla energy storage, and robotics.

Underperforming Sectors:

• E-bikes, pet industry, water reducers, children’s clothing, household ceramics, electrode foils, waterproof materials, kitchen cabinets, wardrobes, and custom home furnishings.

Technical Analysis of China Market

Market Snapshot

• Shanghai Composite Index: +0.76%, closing at 3,254.12.
• Shenzhen Component Index: +1.43%, closing at 10,309.95.
• ChiNext Index: +2.09%, closing at 2,106.05.

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Disclaimer

This information contained in this blog is for general reference only and is not intended as investment advice, a recommendation, an offer, or an invitation to buy or sell any financial instruments. It does not consider any specific recipient’s investment objectives or financial situation. Past performance references are not reliable indicators of future performance. D Prime and its affiliates make no representations or warranties about the accuracy or completeness of this information and accept no liability for any losses or damages resulting from its use or from any investments made based on it. 
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