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Weak US data, interest rate cuts by the Bank of England and escalating geopolitical conflicts in the Middle East have caused investors' risk aversion to soar. US AI stocks, chip stocks and technology stocks have plummeted, while US Treasuries, gold and the yen have risen during the session due to safe-haven demand.

The U.S. labor market continues to cool, and several indicators suggest that it has returned to pre-epidemic levels. The number of first-time unemployment claims in the U.S. in the week of July 27 was 249,000, higher than the expected 236,000 and the previous value of 235,000. The data rebounded to the highest level in a year, adding to the positive news of interest rate cuts. U.S. data added signs of economic slowdown. The U.S. ISM manufacturing PMI in July was 46.8, significantly lower than the market expectation of 48.8 and the previous value of 48.5 in June. The shrinkage was the largest in eight months, exacerbating market concerns about a U.S. recession, hitting U.S. stocks hard, and high-dividend sectors such as utilities led the gains.

After the data was released, the yield on the 10-year U.S. Treasury bond fell below 4% for the first time since February, and major U.S. stock indexes fell across the board. Traders believe that the economic data supports the possibility that the Federal Reserve will cut interest rates three times this year, totaling 75 basis points, with a 100% chance.

Intel's earnings report was disappointing, with its stock price plummeting 20% ​​after the market closed, and it suspended dividends for the first time in 32 years. Apple's revenue in Greater China in the third fiscal quarter fell more than expected, causing its stock price to fall more than 1% after the market closed. Amazon's second quarter revenue and guidance for next quarter were not good, causing its stock price to fall more than 5% after the market closed.

Expectations for rate cuts rose as jobless claims surged, manufacturing contracted and construction spending plunged.

In terms of geopolitics, according to CCTV News, informed sources revealed that due to the assassination of Ismail Haniyeh, the leader of the Political Bureau of the Palestinian Islamic Resistance Movement (Hamas), Hamas has indefinitely frozen the ceasefire and personnel exchange agreement negotiations. Iran's Supreme Leader Khamenei has ordered a direct attack on Israel in retaliation for Haniyeh's assassination in Tehran.

Some analysts say that the rise in support for Vice President Harris in the US election polls and the sharp rise in bets on the Federal Reserve's upcoming rate cuts have dealt a double blow to the "Trump trade." In the 11 days since Harris became a candidate, Trump's winning trade strategy has lost momentum, the dollar has stagnated, US Treasuries have risen, and Bitcoin has fallen.

Internationally, the Bank of England cut interest rates by 25 basis points for the first time since early 2020, and the pound fell sharply against the US dollar and UK government bond yields, but traders increased their bets that the Bank of England will cut interest rates by another 40 basis points by the end of the year, which means that the market expects two more rate cuts.

U.S. stocks opened higher and then plunged during the day, with the Nasdaq closing down 2.3%. Chip stocks were wiped out, and Nvidia fell 6.7%.

On August 1, U.S. stocks had a bad start to August, with major stock indexes falling across the board. Small-cap stocks and technology stocks led the declines. The semiconductor sector plummeted 7.1% and fell more than 8% at its deepest point during the session.

U.S. stocks opened higher due to the Fed's dovish outlook, but fell sharply during the session due to economic difficulties. When the Nasdaq, which is dominated by technology stocks, hit a new low before the close, it fell as much as 3.1% in the late trading; the S&P 500 index fell as much as 2%; the Dow Jones Industrial Average, which is closely related to the economic cycle, fell as much as 1.8%, or 744 points, and fell nearly 1,000 points from its daily high; the Russell small-cap index fell as much as 3.7%.

As of closing:

The S&P 500 closed down 75.62 points, or 1.37%, at 5,446.68. The Dow Jones Industrial Average closed down 494.82 points, or 1.21%, at 40,347.97. The Nasdaq closed down 405.26 points, or 2.30%, at 17,194.15.
The Nasdaq 100 fell 2.44%; the Nasdaq Technology Market Capitalization Weighted Index (NDXTMC), which measures the performance of Nasdaq 100 technology components, closed down 3.11%; the Russell 2000 index closed down 3.03%; and the VIX index closed up 13.81% at 18.62.
The Philadelphia Semiconductor Index closed down 7.14%, the Dow Jones KBW Regional Banks Index closed down 4.37%, and the Philadelphia Stock Exchange KBW Bank Index closed down 2.99%.
Small-cap stocks plummeted 3%, the Nasdaq fell 2.3%, the Dow and S&P 500 fell more than 1%. Among the 11 sectors of the S&P 500, the S&P information technology/technology sector fell 3.36%, the energy sector fell 2.56%, the consumer discretionary sector fell 2.25%, the industrial sector fell 1.83%, the financial sector fell 1.38%, while the real estate sector rose 1.58% and the utilities sector rose 1.85%.

All of the “Seven Technology Sisters” fell except Meta.Nvidia led the decline with a 6.67% drop, Tesla fell 6.55%, Amazon fell 1.56%, Google A fell 0.45%, Apple fell 1.68%, Microsoft fell 0.3%, and Meta rose 4.82% the day after the earnings report was released.

The seven largest tech companies lost $430 billion in market value on Thursday

Chip stocks almost all collapsedThe Philadelphia Semiconductor Index fell 7.14%; the industry ETF SOXX fell 7.21%; and the Nvidia Double Long ETF fell 13.3%.

Arm Holdings fell 15.72%, Qualcomm fell 9.37%, Broadcom fell 8.5%, AMD fell 8.26%, wiping out the gains after the earnings report, KLA fell 8.13%, ON Semiconductor fell 8.12%, Micron Technology fell 7.57%, Applied Materials fell 7.49%, ASML ADR fell 5.66%, Intel fell 5.5%, and TSMC's US stocks fell 4.6%.

Chip stocks were hammered, erasing all of yesterday's buying gains and falling to their lowest level since mid-May

AI concept stocks are in dire straitsSoundHound AI, an AI voice company held by Nvidia, fell 8.45%, BigBear.ai fell 7.28%, Snowflake fell 4.74%, Dell fell 4.62%, AMD fell 4.19%, CrowdStrike fell 3.34%, Palantir fell 3.01%, BullFrog AI fell 2.03%, Oracle fell 1.39%, and Serve Robotics, an AI robot delivery company held by Nvidia, fell 1.48%.

Chinese concept stocks fell collectivelyThe Nasdaq Golden Dragon China Index closed down 3.35%. Among ETFs, the China Internet Index ETF (KWEB) closed down 2.15%, and the China Technology Index ETF (CQQQ) closed down 1.45%.

Among the popular Chinese stocks listed in the US, "education and training concept stocks" Gaotu Education closed down 11.87%, and TAL Education Group fell 9.38%; "NIO, Xpeng and Li Auto" announced their July performance reports, with NIO falling 8.56%, Xpeng falling 5.33%, and Li Auto falling 1.87%; Douyu fell more than 4.5%, JD.com fell more than 4.3%, Ehang Intelligent fell more than 4.3%, JinkoSolar fell more than 3.7%, and Qifu Technology fell more than 3.5%. Ctrip, Beike, Vipshop, and Zai Lab fell by more than 3.2% at most. Baidu and ZTO Express fell by about 2.4%, New Oriental fell 1.7%, Alibaba and NetEase fell 1.1%, Yum China fell more than 0.6%, and Bilibili rose more than 0.5%.

On the news:

New car manufacturers such as "NIO, Xpeng and Li Auto" announced their July performance reports. BYD's sales of new energy vehicles in July exceeded 340,000 units, a year-on-year increase of 30.6%. SERES' sales of new energy vehicles in July increased by 508.25% year-on-year. Li Auto's sales in July exceeded 50,000 units, and its cumulative deliveries ranked first. NIO's deliveries in July exceeded 20,000 units for three consecutive months, and Xpeng Motors' sales in July increased by 1% year-on-year.
TAL Education Group closed down 9.38%. The company's net revenue in the first quarter of fiscal year 2025 was US$414 million, a year-on-year increase of 50.4%; net profit was US$11.402 million, compared with a net loss of US$45.037 million in the same period last year.

Other stocks with significant changes due to financial reports:

Intel's stock price plummeted by more than 20% after the market closed. The company's Q2 revenue unexpectedly declined, and it will lay off more than 15% of its employees and suspend dividends for the first time in 32 years.
Apple fell more than 1% after the market closed. Apple's revenue and profit exceeded expectations for six consecutive quarters. Although iPhone revenue fell year-on-year, the total amount was better than expected. Greater China's revenue was the only geographic region to decline year-on-year and the decline was greater than expected. CEO Cook said that he still has confidence in the Chinese market in the long run. The iPhone installation base in mainland China and Greater China actually hit a new high. Apple's smartphone sales ranked in the top three in Chinese cities, and the performance of the Chinese market is accelerating from the first half of the fiscal year. Apple acknowledged that its spending on artificial intelligence increased year-on-year, and it is optimistic that AI is another reason for people to buy a new iPhone.
Amazon once fell more than 6% after the market closed. Although AWS, the cloud business, maintained strong double-digit sales growth in the second quarter, Amazon's overall sales guidance for the third quarter was poor, which turned on the red light of weak demand for its cloud business. At the same time, Amazon's profit guidance for the third quarter was also lower than expected, reflecting the profit pressure of the technology giant as it invests heavily in the field of artificial intelligence (AI).
Toyota's stock price fell 7.48% in the US stock market, BMW fell 3.59%, and Volkswagen fell 4.06%. Due to the increasingly fierce competition in the global automobile market, especially the protracted price war in the key market of China, the profit margins of the two major German auto giants - Volkswagen and BMW - both declined in the second quarter. Volkswagen's deliveries in the Chinese market fell 19% year-on-year in the second quarter, and it is predicted that the annual revenue growth will not exceed 5%. BMW's revenue and profit margin both fell in the second quarter, and its sales in the Chinese market fell 4% in the first half of the year. Japanese auto giant Toyota's second-quarter operating profit growth was lower than expected, and its Toyota and luxury Lexus brands fell 17.6% in China.
Moderna fell 21.01%. Moderna's revenue in the second quarter exceeded market expectations, and its loss was smaller than expected. The main reason for the decline in revenue was the decline in the company's new crown vaccine sales. Due to the decline in sales in the European market and fierce competition in the US respiratory vaccine market, Moderna lowered its full-year sales forecast.
Eli Lilly's blockbuster drug Zepbound reportedly improved the long-term health of patients with obesity-related heart failure in a trial, highlighting the cardiovascular benefits of the weight-loss drug, stimulating Eli Lilly to close up 3.5%. Eli Lilly's CEO said that he expects the weight-loss drug to be out of supply shortages "soon."
Gold and silver mining stocks almost collapsed across the board, with First Majestic closing down 13.43%, Hecla Mining down 7.79%, Colderen Mining down 7.55%, Pan American Silver down 3.79%, gold mining stock ETF GDX down 1.74%, Barrick Gold down 1.46%, and silver ETF SLV down 1.36%.

Affected by US economic data and the Bank of England's interest rate cut, European stock markets closed down collectively, with the banking sector falling 4.5% and leading the decline:

The pan-European Stoxx 600 index closed down 1.23%. The Eurozone STOXX 50 index closed down 2.2%, approaching the 200-day moving average (the technical indicator is currently at 4739.41 points). Most sectors fell, with the banking sector falling 4.48%, while the retail sector rose 1.27%, making it the only sector to rise.
Germany's DAX 30 index closed down 2.30%. France's CAC 40 index closed down 2.14%. Italy's FTSE MIB index closed down 2.68%. Britain's FTSE 100 index closed down 1.01%. The Netherlands' AEX index closed down 1.46%. Spain's IBEX 35 index closed down 1.90%.
The STOXX 600 Bank Index closed down 4.47%. Bloomberg data showed that almost all of its 48 constituent stocks closed lower, with Societe Generale GLE down 8.97% and HSBC Holdings down 6.46%, the fifth largest decline.

Other stocks with significant changes due to financial reports:

Societe Generale closed down 8.97% after the company's second-quarter profit exceeded expectations and it lowered its outlook for its French retail business.
Rolls-Royce's share price rose by more than 11% during the trading session to a record high. The company resumed dividend payments, reported strong performance in the first half of the year, and raised its profit forecast.

The decline in short-term US bond yields was particularly prominent. The Bank of England's rate cut, weak US data, and the situation in the Middle East drove investors to safe-haven sovereign bonds.

At the end of the trading day, the two-year Treasury yield, which is more sensitive to monetary policy, fell 10.73 basis points, hitting a daily low of 4.1502%, and a daily high of 4.2964% at 16:30. It fluctuated narrowly by less than 4 basis points before the Bank of England announced a rate cut, plunged after the resolution statement was released, and widened its losses after the release of the US ISM manufacturing data.

The 10-year U.S. Treasury yield fell below 4% for the first time since February, closing down 4.98 basis points at 3.9798%. It traded in the range of 4.0642%-3.9627% during the session. There was a dive after the Bank of England announced a rate cut at 19:00 Beijing time, and the decline widened further after the release of the U.S. ISM manufacturing index at 22:00.

The benchmark 10-year U.S. Treasury yield fell below 4% for the first time since February.

The euro zone's benchmark 10-year German bond yield fell 6.0 basis points to 2.244%, while the two-year German bond yield fell 7.9 basis points to 2.453%.

The French 10-year government bond yield fell 1.9 basis points, the Italian 10-year government bond yield fell 0.5 basis points, the Spanish 10-year government bond yield fell 2.4 basis points, and the Greek 10-year government bond yield fell 0.8 basis points.

The Bank of England cut interest rates for the first time in four years. The yield on two-year gilts, which is more sensitive to interest rates, once fell by 15 basis points, the largest intraday drop since December last year, and still fell by more than 10 basis points to 3.72% at the end of the trading day. The yield on 10-year gilts fell by 9 basis points, hitting a new low of 3.88% since February. British government bond prices soared, and traders bet on two more rate cuts this year.

Concerns about the US economic recession and weak oil demand outweighed the impact of the situation in the Middle East. US oil rose above $78 and then fell more than 2%.

WTI September crude oil futures closed down $1.60, or nearly 2.06%, at $76.31 per barrel. Brent October crude oil futures closed down $1.20, or nearly 1.49%, at $79.52 per barrel.

U.S. crude oil and Brent crude oil hit daily highs in early European trading, both rising by about 1.2%, approaching the integers of $79 and $82 respectively. However, after the release of the July ISM manufacturing data in early U.S. trading, both fell sharply. Before the close of U.S. trading, U.S. crude oil and Brent crude oil hit daily lows, falling by more than 2.1% and 1.7%, approaching $76 and $79 respectively.

Analysts said that the U.S. manufacturing industry shrank for the fourth consecutive month in July and the number of people applying for unemployment benefits surged last week, once again raising concerns that the U.S. economy may fall into recession, overshadowing supply concerns caused by tensions in the Middle East. U.S. oil fell 2%.

Oil prices rose earlier because after the assassination of the Hamas leader in Tehran, the market was worried that Israel and Iran would directly conflict. According to CCTV News, people familiar with the matter said that Hamas had frozen ceasefire negotiations indefinitely, which brought risks to the Middle East oil supply.

Oil prices fell after rising to around $79 a barrel amid tensions in the Middle East

U.S. natural gas futures for August delivery closed down 3.34% at $1.9680/MMBtu. However, investors were concerned about supply risks, and European natural gas futures continued to rise, hitting a record high for the year. The European benchmark TTF Dutch natural gas futures rose 5.35% to 36.900 euros/MWh. ICE UK natural gas futures rose 3.23% to 92.870 pence/kcal.

The US dollar index rose by more than 0.2%, and the yen once broke through 149 to hit a four-and-a-half-month high

The U.S. dollar index DXY, which measures the dollar against a basket of six major currencies, rose 0.23% to 104.339 points, with the intraday trading range being 103.863-104.447 points.

The Bloomberg Dollar Index rose 0.34% to 1257.98 points, with the intraday trading range being 1251.80-1258.83 points.

Chris Turner, global head of markets at ING, said that even if the Federal Reserve prepares to cut interest rates, geopolitical tensions and economic slowdowns in other parts of the world are supporting the dollar, a traditional "safe haven" for investors in times of tension.

Most non-US currencies fell, with the euro and pound both hitting four-week lows.The euro fell 0.31% against the US dollar, and the pound fell 1% against the US dollar at one point. The market raised its bets on the Bank of England's interest rate cut to two more rate cuts this year, and the US dollar fell 0.55% against the Swiss franc.

The offshore renminbi (CNH) fell 237 points to 7.2513 yuan against the US dollar, and traded in the range of 7.2101-7.2583 yuan during the session.

Among Asian currencies, the dollar fell 0.43% against the yen to 149.34 yen, the highest level since mid-March, with the intraday trading range of 150.89-148.51 yen. The euro fell 0.72% against the yen to 161.19 yen, and the pound fell 1.34% against the yen to 190.227 yen.

As geopolitical conflicts in the Middle East escalated, Israeli assets plummeted, with the Israeli shekel falling below 3.8 shekels to the dollar for the first time since April.

Most major cryptocurrencies fell.Bitcoin, the largest cryptocurrency by market value, fell 0.88% to $65,110.00, hitting a daily low of $62,615.00 at 01:46 Beijing time. Ethereum, the second largest cryptocurrency, fell 3.14% to $3,188.50, also hitting a daily low of $3,096.50 at 02:42.

Bitcoin plunged to $62,000 before rebounding slightly. Safe-haven demand drove gold prices to a two-week high during the session, and then the strengthening of the US dollar pushed gold prices back down and stabilized above $2,440.

COMEX December gold futures rose 0.39% to $2,482.7 per ounce in late trading, closer to the all-time high, while COMEX September silver futures fell 1.77% to $28.425 per ounce in late trading.

Gold prices fell after rising. The US stock market opened negatively in August and the strengthening of the US dollar led investors to turn to European and American sovereign bonds. At the end of New York trading on Thursday, spot gold fell 0.05% to $2,446.26 per ounce. After the release of the US ISM manufacturing index, it hit a daily high of $2,462.34. Spot silver, which has industrial metal properties, fell 1.67% to $28.5235 per ounce. The US stock market hit a daily low after lunch, falling more than 2.7% to $28. The US stock market had risen above $29 when it hit a daily high before the market opened.

Analysts said that as market focus shifted to the U.S. non-farm payrolls data to be released on Friday, gold prices hit a two-week high earlier in the session, driven by expectations of a September rate cut and safe-haven demand, before a rise in the U.S. dollar pushed gold prices down slightly.

Gold finds support at $2,440

Most industrial base metals in London closed lower.Economic indicator "Dr. Copper" fell more than 1.86% to $9,052/ton. London aluminum closed up $6 at $2,296/ton. London zinc rose more than 1.19% to $2,707/ton. London lead fell more than 1.05% to $2,062/ton. London nickel fell about 1.94% to $16,282/ton. London tin closed down $162 at $29,894/ton.