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Cailianshe News, August 6 (Editor: Zhao Hao)On Monday (August 5), U.S. stocks fell sharply, with the Dow Jones Industrial Average and the S&P 500 both posting their worst day in nearly two years.

As of the close, the Dow Jones Industrial Average fell 2.60% to 38,703.27 points; the S&P 500 fell 3.00% to 5,186.33 points. Both indexes recorded their largest single-day declines since September 2022; the Nasdaq Composite fell 3.43% to 16,200.08 points.

Among the 500 stocks in the S&P 500, only 22 recorded gains, with the top gainers beingKellogg's（+16.23%）、Tyson Foods(+2.09%), as well as the recently oversold CrowdStrike (+1.91%) and AMD (+1.75%). All 30 Dow components were wiped out.

S&P 500 Index Heat Map

Before the opening of the U.S. stock market, global stock markets were already under pressure, with the Nikkei 225 index plummeting 12.40%, a 4,451.28-point drop from the previous trading day, exceeding the record of "Black Monday" in October 1987. At the beginning of the session, the Dow Jones Industrial Average fell by more than 3.1%, while the S&P and Nasdaq fell by more than 4.2% and 6.3% respectively.

Analysts believe that market concerns about a US recession are the main reason for the global market collapse. Last Friday, the unemployment rate announced by the US Department of Labor unexpectedly rose to 4.3%, the highest since October 2021, and triggered the Sam rule.

According to historical experience, the "Sam Rule" has been verified in all nine US recessions since 1960. But the Federal Reserve still chose to keep the central bank interest rate at its highest level in 20 years last week, and investors are worried that the central bank is too slow to relax monetary policy.

Sam Stovall, chief investment strategist at CFRA Research, said that people were once paralyzed by a sense of security, but in fact, U.S. stocks are vulnerable to a pullback, and weaker-than-expected U.S. economic and employment data provided a catalyst for this pullback.

In addition, after a weekend of fermentation, the market's expectations for the extent of the Fed's interest rate cut have clearly increased. CME's "Fed Watch" tool shows that the median forecast believes that the Fed's interest rate cut this year will be as high as 125 basis points, which has suppressed the US dollar.

The pressure on the US dollar and the "hawkish" Bank of Japan have led to the liquidation of a large number of yen carry trades, exacerbating the turmoil in global financial markets., but he did not commit to possible action.

Claudia Sahm, the originator of the "Sahm's Rule" and a former Federal Reserve economist, said that the United States has not yet entered a recession, but it is close., "In times like these, it's important to stay calm."

Hot Stock Performance

Large technology stocks collectively plummeted, (arranged by market value)appleIt closed down 4.82%, and fell more than 10% during the session;MicrosoftDown 3.27%;Nvidiafell 6.36%, once falling more than 15%; Google C fell 4.61%,AmazonIt fell by 4.10%, and Meta fell by 2.54%;TeslaDown 4.23%.

The Philadelphia Semiconductor Index fell 1.92%, recovering a 7% loss at one point during the session. The top losers wereIntel(-6.38%) and Nvidia; AMD, ON Semiconductor (+1.50%), ASML (+1.36%), and KLA-Tencor (+1.05%) rose against the market trend.

In terms of Chinese stocks listed in the US, the Nasdaq China Golden Dragon Index rose 0.25% to 5,373.21 points.

Popular Chinese stocks rose and fell, with New Oriental up 8.89%, ZTO Express up 4.58%, Vipshop up 3.56%, Bilibili up 3.16%, TAL Education up 1.77%, Tencent Music down 0.16%, Alibaba down 0.61%, JD.com down 0.83%, Pinduoduo down 0.96%, Li Auto down 1.77%, Baidu down 2.49%, Xpeng Motors down 3.17%, and NIO down 3.95%.

Company News

[“President Donald” was automatically corrected to “Donald Duck”. Trump called on supporters to stop using Google]

Former U.S. President Donald Trump called on his supporters to stop using Google, calling the search engine "illegal." "There's something wrong with Google," Trump said in an interview on Monday. "Maybe everybody should just stop using Google and stop using it," Trump said, referring to claims by Musk and others that Google is interfering with finding information about the former president. Musk said Google had imposed a "search ban" on Trump and shared an image that appeared to show that one of the search engine's autocorrect suggestions for a search for "president donald" was "donald duck."

[Google said it would appeal the US court's antitrust ruling]

Google plans to appeal a U.S. federal judge's ruling that it had illegally monopolized the search market, the company said in a statement released on X. "We plan to appeal," Kent Walker, Google's president of global affairs, said in the statement.

[Nvidia faces challenges in next-generation chip production]

Nvidia and its major suppliersTSMCThe much-anticipated next generation of the most powerful AI chips is facing production challenges that could delay shipments this year. Nvidia, whose cutting-edge designs take advantage of TSMC's new manufacturing process, is having trouble preparing for mass production of some models of its Blackwell series of data center chips, people familiar with the matter said. Nvidia declined to comment but reiterated that "Blackwell production is on track" and will begin mass production in the second half of 2024. Nvidia added that demand for its existing Hopper chips remains "very strong."

[Dell promotes sales team restructuring and layoffs and establishes a new team focused on AI]

Dell Technologies is laying off employees as part of a reorganization of its sales team. The restructuring also includes the creation of a new team focused on artificial intelligence products and services. "We are becoming leaner," sales team executives Bill Scannell and John Byrne wrote in a memo to Dell employees on Monday. "We are streamlining management and re-prioritizing investments." In addition to the team focused on AI, executives also said the company will change how data center sales operate. A spokesperson declined to comment on how many jobs would be affected. "By reorganizing our go-to-market teams and taking a number of actions, we are becoming a leaner company."

[Lucid's second-quarter revenue exceeded expectations, and PIF promised to inject an additional $1.5 billion in funds]

Electric car maker Lucid's second-quarter revenue was $200.6 million, while analysts expected $185.8 million; second-quarter vehicle deliveries were 2,394, while analysts expected 1,999; second-quarter adjusted loss before interest and taxes was $647.6 million, while analysts expected a loss of $560.9 million; second-quarter loss per share was $0.34, compared with a loss of $0.40 per share in the same period last year; the Saudi Public Investment Fund (PIF) has pledged an additional $1.5 billion in capital injection, which will give the company sufficient liquidity to continue operating until at least the fourth quarter of 2025.

[Palantir's full-year adjusted operating profit guidance is higher than expected]

Palantir's adjusted earnings per share for the second quarter were $0.09, while analysts expected $0.081; revenue for the second quarter was $678.1 million, while analysts expected $652.8 million; adjusted EBITDA for the second quarter was $261.6 million, while analysts expected $219.3 million; full-year revenue is expected to be $2.74 billion to $2.75 billion, while the company originally expected $2.68 billion to $2.69 billion; full-year adjusted operating profit is expected to be $966 million to $974 million, while analysts expected $883 million; third-quarter revenue is expected to be $697 million to $701 million, while analysts expected $681.4 million.

【Yum ChinaSecond-quarter adjusted earnings per share beat expectations]

Yum China's revenue in the second fiscal quarter was $2.68 billion, while analysts expected $2.78 billion; same-store sales in the second fiscal quarter fell 4%, while analysts expected a 3% decline; adjusted earnings per share in the second fiscal quarter were $0.55, while analysts expected $0.48; adjusted operating profit in the second fiscal quarter was $266 million, while analysts expected $253.1 million.

(Cailianshe Zhao Hao)