Financial Daily: US stocks surged then retreated amid a weakening dollar; global markets focus on non-farm payroll data

- Focus

– US Treasury Secretary Bescent stated that US-China relations can be highly productive, welcoming fair competition and not wishing to decouple from China

– The People's Bank of China released its Q4 2025 monetary policy implementation report, stating that the next phase will continue to implement a moderately accommodative monetary policy, prioritizing stable economic growth and reasonable price increases, while carefully calibrating the intensity, pace, and timing of policy implementation

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- Stock Market

【US Market】Mixed performance in the three major US stock indexes, financial stocks affected and declined

The December US retail sales data showed weaker-than-expected growth. With the non-farm payrolls report due on Wednesday, the market remained cautious. The US stock market initially surged but retreated later. Large-cap tech stocks were volatile, while financial institutions declined. The three major US indexes ended mixed, with only the Dow Jones Industrial Average posting a modest gain. The banking and financial sectors led the declines.

At the close, the S&P 500 Index fell 0.33% to 6,941.81 points; the Nasdaq Index dropped 0.59% to 23,102.474 points; and the Dow Jones Industrial Average rose 0.10% to 50,188.14 points. The VIX volatility index fell 2.25% to 17.36.

The index of the seven major US tech giants fell 0.59%, with Tesla rising nearly 1.9%, while the other stocks declined. Meta fell nearly 1%, and Google A dropped 1.77%. The Nasdaq China Golden Dragon Index rose 0.87% to 7,885.55 points. Among popular Chinese stocks, Li Auto gained about 2.9%, Alibaba rose over 2%, Tencent fell 1.4%, and Meituan dropped 2.8%.

【European Market】Most major European indexes closed lower on Tuesday

On Tuesday, most major European stock indexes closed lower, with the STOXX 600 Index pulling back from its historical high. At the close, the pan-European STOXX 600 Index fell 0.07% to 620.97 points, and the pan-European STOXX 50 Index dropped 0.20% to 6,047.06 points.

The German DAX 30 Index fell 0.11% to 24,987.85 points; the French CAC 40 Index rose 0.06% to 8,327.88 points; and the UK FTSE 100 Index dropped 0.31% to 10,353.84 points.

【Asian Market】Japan and South Korea indexes both closed higher on Tuesday

On Tuesday, Japan and South Korea's stock indexes both closed higher. Japan's main index gained around 2%, with the Nikkei 225 Index hitting a new all-time high during the session. At the close, the Nikkei 225 Index rose 2.3% to 57,650.54 points, and Japan’s TOPIX Index increased 1.9% to 3,855.28 points. South Korea’s KOSPI Index edged up 0.07% to 5,301.69 points.

【Hong Kong Market】Hong Kong stocks opened higher and continued to rise, with the three major indexes all closing higher

Hong Kong stocks rose throughout the day on Tuesday, with all three major indices closing higher. By the close, the Hang Seng Index was up 0.58% at 27,183.15 points, the Hang Seng Tech Index gained 0.62% to 5,451.03 points, and the Hang Seng China Enterprises Index increased by 0.81% to 9,242.75 points. Sector-wise, AI-related stocks performed strongly, with Zhipu surging over 24% intraday before closing more than 16% higher. New energy vehicle stocks were broadly higher, with BYD shares rising over 2.4%, while Li Auto and Leapmotor both climbed over 1%. The biotech sector and innovative drug sectors also saw strength.

[A-share Market] A-shares showed volatile performance throughout the day, with mixed gains and losses across the three major indices.

A-shares exhibited volatility throughout the day, with mixed performances among the three major indices, as the Shanghai Composite Index extended its winning streak to six trading days. At the close, the Shanghai Composite Index rose 0.13% to 4,128.37 points, the Shenzhen Component Index added 0.02% to 14,210.63 points, and the ChiNext Index fell 0.37% to 3,320.54 points. Sector-wise, the upcoming Chinese New Year holiday, along with ByteDance's newly launched AI video generation model, helped drive strong performance in the cultural media sector, sparking a wave of limit-up surges. Stocks such as ReadGuest Culture, Jiecheng Co., Chinese Online, and Enlight Media soared 20%. Other sectors showing strength included gaming, education, AI computing power, rare earths, and innovative drugs, while photovoltaics, consumer staples, precious metals, and jewelry saw notable declines.

– Bonds

[US Bonds] US Treasury yields fell, with the 10-year Treasury yield down 6.14 basis points.

Lower US retail sales data pushed up Treasury prices. In late New York trading, the 10-year Treasury yield dropped 6.14 basis points to 4.1407%, and the two-year Treasury yield fell 3.31 basis points to 3.4520%.

[Non-US Bond Markets] Yields on 10-year European government bonds generally declined.

On Tuesday, 10-year European government bond yields mostly fell. In late European trading, Germany's 10-year bond yield decreased by 3.2 basis points to 2.808%, the UK’s 10-year bond yield dropped by 2.1 basis points to 4.506%, France's 10-year bond yield fell by 4.4 basis points to 3.400%, and Italy's 10-year bond yield declined by 4.2 basis points to 3.409%.

[Chinese Bond Market] On Tuesday, government bond futures remained largely unchanged from the previous trading day’s levels.

Government bond futures showed volatility during Tuesday’s session but closed nearly flat compared to the previous trading day. By the close, the 30-year main contract rose 0.01%, the 10-year main contract gained 0.01%, and both the 5-year and 2-year main contracts remained unchanged.

– Foreign exchange

[US Dollar] The dollar index edged lower on Tuesday, with the ICE dollar index at 96.814.

The US Dollar Index edged lower on Tuesday, touching a near one-week low during the session. By the New York close, the ICE US Dollar Index was roughly flat compared to the previous trading day at 96.814 points; the Bloomberg Dollar Index fell 0.09% to 1,181.94 points.

[Non-US Currencies] The US dollar showed mixed performance against most major currencies, with the yen rising over 1%.

Weak US retail data weighed on the dollar, but major European currencies also performed poorly, while the yen surged more than 1%. By the New York close, the dollar fell 1.01% against the yen to 154.30 yen. The euro dropped 0.15% against the dollar, and the pound declined 0.37% against the dollar.

[Renminbi] The dollar was quoted at 6.9121 yuan against the offshore renminbi.

By the New York close, the dollar fell 31 points against the offshore renminbi from the previous trading day's close, to 6.9121 yuan. The onshore renminbi rose 155 points against the dollar from the previous trading day's closing price, to 6.9129 yuan.

[Cryptocurrencies] Cryptocurrency markets trended lower.

Bitcoin fell on Tuesday, dropping approximately 2.5%, falling below $69,000. Ethereum declined around 4.2%, with its current price at about $2,000.

– Product

[Energy] Crude oil futures prices moved lower.

Oil prices fluctuated lower. By the US stock market close, Brent crude futures fell 0.35%, settling at $68.80 per barrel; US crude futures dropped 0.62%, settling at $63.96 per barrel.

[Precious Metals] Precious metals generally declined.

Precious Metals:Gold prices once fell more than 1% during the session, then narrowed losses. In New York trading, spot gold was down 0.62%, at $5,026.20 per ounce; US gold futures dropped 0.65%, to $5,046.50 per ounce.

Metals Futures Market:In New York trading, spot silver fell 3.09%, at $80.8200 per ounce; US silver futures declined 2.11%, to $80.495 per ounce. US copper futures slipped about 1%, to $5.9035 per pound, while spot platinum dropped 1.47% and spot palladium fell 1.68%.

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