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China Fund News reporter Taylor

Tonight, the U.S. stock market is not calm.

Pinduoduo's stock price plummets

On the evening of August 26, after the U.S. stock market opened, Pinduoduo's stock price plummeted 30% during the day, which was the largest intraday drop since October 24, 2022.

One of the reasons is that Pinduoduo's second-quarter financial report performance was lower than expected. Pinduoduo's second-quarter revenue was RMB 97.1 billion, which fell short of the market's expectation of RMB 100 billion. For details, you can click on the link on the right to view it - Pinduoduo, breaking news!

The second reason is the speech made by Pinduoduo’s executives at the performance meeting.

Pinduoduo founder and CEO Chen Lei said in a conference call that the company's profit growth in the past few quarters was the result of the lack of synchronization between short-term investment cycles and financial reporting cycles and should not be regarded as a long-term trend.

Given the fierce competition the company faces in multiple business lines and the fact that it is still in the investment stage overall, Chen Lei said that Pinduoduo will not repurchase or distribute dividends in the next few years.

In addition, in order to support the long-term healthy development of the platform and the construction of high-quality supply, Chen Lei pointed out that Pinduoduo is ready to sacrifice short-term profits in the future, and the management has reached a consensus on this.

Management also stated that due to fierce competition in the e-commerce industry, the company's revenue growth may slow down, and profits will fluctuate and rebound in the next few quarters, but the long-term trend of declining profits is inevitable.

Dow hits new intraday high

Tonight's US stocks were mixed, with the Dow Jones hitting a record high during the session and the Nasdaq falling nearly 1%!

The prospect of the Federal Reserve cutting interest rates remains the focus of the market. Optimism that the US interest rate cut cycle may begin in September has risen again.

Federal Reserve Chairman Jerome Powell said last week that a rate cut was just around the corner, calming market sentiment after Wall Street had been anxiously awaiting a signal of a rate cut.

In early August this year, some worrying economic data triggered a sell-off in U.S. stocks as investors worried that long-term high U.S. borrowing costs could drag the U.S. economy into recession.

However, the stock market has rebounded continuously since then, and the three major stock indexes are currently near their historical highs.

Powell did not specify exactly when or by how much the rate cut might occur. However, according to CME’s FedWatch tool,Traders unanimously predict that the Federal Reserve will cut interest rates at its September monetary policy meeting.

Federal Funds futures fully price in a 25 basis point rate cut at the September 18 meeting and suggest a 38% chance of a larger 50 basis point cut. The market also expects a cumulative rate cut of 103 basis points this year and another 122 basis points in 2025.

In addition, Nvidia willThe second quarter financial report for fiscal year 2025 will be released on WednesdayNvidia shares have surged more than 150% so far this year, adding $1.82 trillion to its market value and pushing the S&P 500 to a new high.

International oil prices rose by about 3%. On the news front, the eastern Libyan government announced on August 26 that it would stop all oil production and exports, saying that the move was in response to the Tripoli government's attempt to take over the Libyan Central Bank.