Wall Street Brief (February 20): Slight pullback in the three major US stock indexes, oil prices continued to rise, market sentiment remains cautious - 'wanting to defend but not fully, wanting to attack but lacking catalysts'

Summary: US stocks edged lower on Thursday, with the S&P 500 down 0.28%, Nasdaq down 0.31%, Dow Jones down 0.54%, and Russell 2000 up slightly by 0.24%. The VIX rose to 20.23, gaining 3.11% on the day. Oil prices continued to climb, risk appetite cooled, and large-cap stocks led the retreat. Defensive sectors like utilities showed relative resilience but were insufficient to reverse the weakening indexes. Overall, the market seems to be in a state of 'wanting to defend but not fully, wanting to attack but lacking catalysts', with caution still prevailing. In terms of major asset classes, gold rose 0.4%, crude oil surged 2.66%, Bitcoin rebounded 0.82%, and the dollar index edged up 0.1%. Safe-haven demand saw a slight increase but remained limited in overall strength.

I. Major Events

1. Rising oil prices, US-Iran tensions boost cost expectations

Geopolitical risks have heightened concerns about supply disruptions, driving oil prices higher and benefiting the energy sector. At the same time, rising oil prices have brought cost expectations back into focus, prompting the market to reassess the valuation space for risk assets, shifting overall sentiment to a more cautious tone.

2. Walmart's earnings report surpasses expectations but guidance remains conservative

Walmart delivered better-than-expected quarterly results, but its profit guidance for the coming year fell below market expectations, causing its stock price to retreat. As a key barometer of the consumer sector, its relatively conservative outlook dampened market sentiment toward the consumer supply chain and added extra pressure on major indices.

3. Concerns over AI substitution spread, pressuring some industries and financiers

Discussions around AI competition and the risk of 'being replaced' are heating up. Companies like Booking Holdings have weakened due to sentiment impacts, while some industries viewed as potential replacement targets also came under pressure. Meanwhile, private credit stocks saw pullbacks. Growth sectors faced deeper pressures, leading to a decline in market risk appetite.

II. Major Trends

Over a two-week period, DIA performed the best (2 weeks: 0.91%), while QQQ was the weakest (2 weeks: -4.57%), showing a short-term trend of 'traditional sectors strong, tech weak.' Over a three-month horizon, small-cap stocks significantly outperformed, with IWM rising 6.88% compared to SPY’s 0.01% drop during the same period, indicating small caps held an advantage. In terms of breadth, RSP outpaced SPY over three months (3 months: 6.00% vs -0.01%), reflecting more dispersed upward momentum. In style, value stocks continued to hold an edge, with SPYV up 3.72% over three months, while growth stocks represented by SPYG fell 3.22%; growth stocks also saw deeper short-term pullbacks (2 weeks: -4.37% vs 1.02%). The MAGS tech giants fell 7.01% over two weeks, with their weighting still digesting pressure.

III. Market Sentiment

The VIX rose to 20.23, increasing by 3.11% in a single day, signaling heightened volatility and weaker risk appetite. The CNN Fear & Greed Index remained at 39 (previous day: 39), reflecting continued cautious sentiment. In terms of market breadth, the previous trading day's total market volume of 16.8B was lower than the 20-day average of 20.7B. New highs/lows for the S&P were 23/3, and for Nasdaq were 101/120, presenting a neutral-to-weak overall picture. The latest available Put/Call ratio stood at 0.88 (February 13), while institutional holdings measured by NAAIM were at 80.61 (February 11). Panic has not yet become prominent, but capital movements remain restrained.

IV. Market Scan

1. Index ETFs

Small-cap ETFs showed relative stability, with IWM rising 0.23%, maintaining some resilience amid index declines, indicating that funds are still seeking relatively more elastic directions. DIA fell 0.53%, with blue-chip performance pressured by the pullback of heavyweight stocks. Overall, the market appears to be in a state of 'wanting to defend but not fully, wanting to attack yet lacking catalysts,' with lingering观望 sentiment.

2. Industry Sectors

The utilities sector XLU rose 1.10%, with defensive characteristics providing a relative advantage. The financial sector XLF fell 0.84%, lagging in a cautiously-sentiment environment; weakness in some private credit-related stocks also amplified sector pressures. Capital oscillated between defense and finance, widening short-term divergence.

3. The Seven Major Tech Stocks

META edged up 0.24%, remaining range-bound overall. Apple fell 1.43%, weighing on tech sentiment; without clear catalysts, investor attitude towards the hardware supply chain stayed conservative. Internal divergence within the tech sector widened further.

4. Chinese Stocks Listed Abroad

Futu led gains among Chinese stocks, rising 0.65%, while Alibaba lagged, falling 0.96%. The sector lacked a clear main theme, leaning more towards trading-based recovery, with sustainability still needing observation.

5. Cryptocurrencies and Related Stocks

Bitcoin rose by 0.82%, with sentiment in the crypto market showing slight recovery, but the rebound remains relatively weak. MARA surged 6.13% to lead gains, while CRCL fell 1.95%, lagging behind. Significant divergence is evident between mining companies and trading platforms, with sector volatility still remaining high.

$NASDAQ 100 Index (.NDX.US)$ $Invesco QQQ Trust (QQQ.US)$ $Dow Jones Industrial Average (.DJI.US)$ $State Street® SPDR® Dow Jones Industrial Average® ETF Trust (DIA.US)$ $Russell 2000 Index (.RUT.US)$ $iShares Russell 2000 ETF (IWM.US)$ $Roundhill Magnificent Seven ETF (MAGS.US)$ $USD (USDindex.FX)$ $U.S. 10-Year Treasury Notes Yield (US10Y.BD)$ $iShares 20+ Year Treasury Bond ETF (TLT.US)$ $XAU/USD (XAUUSD.CFD)$ $CBOE Volatility S&P 500 Index (.VIX.US)$ $Bitcoin (BTC.CC)$ $BTC/USD (BTCUSD.CC)$ $Ethereum (ETH.CC)$ $ETH/USD (ETHUSD.CC)$ $iShares Ethereum Trust ETF (ETHA.US)$ $NVIDIA (NVDA.US)$ $Tesla (TSLA.US)$ $Meta Platforms (META.US)$ $Amazon (AMZN.US)$ $Alphabet-C (GOOG.US)$ $Microsoft (MSFT.US)$ $Apple (AAPL.US)$

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