Wall Street Brief (April 2): US stocks edged higher on Wednesday, market sentiment continued to improve but did not return to low volatility; tech outperformed traditional heavyweights, oil prices fell/gold rose

Summary: On Wednesday, the rebound in US stocks continued, with the S&P 500 Index rising 0.72%, Nasdaq rising 1.16%, Dow Jones Industrial Average up 0.48%, and Russell 2000 increasing by 0.64%; further reflecting a structural bias favoring tech over traditional heavyweights. The VIX dropped to 24.54, down 2.81% in a single day, indicating that market anxiety continued to ease, though volatility remained above the lower range. The main trading theme of the day was still markets betting on a potential phase of de-escalation in the Middle East, with oil prices falling another 2.61%, driving continued recovery in tech and industrial sectors; meanwhile, better-than-expected US February retail sales data temporarily eased concerns about 'growth stalling.' In major asset classes, the dollar index fell 0.31%, gold surged 1.90%, crude oil retreated to around $98.91 per barrel, Bitcoin's latest price was approximately $68,123, down slightly by 0.07% for the day. Overall, Wednesday’s rally appeared to be a continuation of a corrective bounce driven by both 'war premium retracement' and easing growth worries.

I. Major Events

1. Expectations of war cooling continue, but ceasefire signals remain shaky

Trump indicated that military action against Iran could conclude within two to three weeks, leading markets to continue betting on a potential phased resolution of the conflict; however, Iran quickly denied the ceasefire rumors, suggesting that actual stabilization remains distant. For the markets, Wednesday’s trading was not about 'peace arriving,' but rather about 'the worst-case scenario not worsening immediately.' Under this expectation gap, oil prices continued to fall, allowing risk assets to maintain their recovery momentum.

2. US consumer data better than expected, growth concerns did not deepen further

US February retail sales increased by 0.6% month-over-month, surpassing market expectations, implying that demand had not weakened prematurely before the full impact of oil prices and war-related shocks materialized. While this result does not suggest robust recovery, it at least reassured markets they need not immediately extrapolate high oil prices into consumer collapse, providing an additional layer of support for Wednesday’s rally based on 'fundamentals remaining intact for now.'

3. China's PMI returns to the expansion zone, providing marginal support for Chinese concepts

China’s official manufacturing PMI rose to 50.4 in March, ending its previous contraction. This signal is not enough to determine the direction of the main U.S. indices, but it provides additional support for Chinese-related assets and explains Futu's continued strength. However, JD.com fell 2.37% on the day, indicating this trend is more of a partial recovery rather than a full resonance among Chinese stocks.

II. Major Trends

Over the past three trading days, the market structure has shifted from 'passive risk reduction under war shocks' to 'first repairing high elasticity, then testing the medium-term pattern.' Looking at the changes over two weeks, SPY quickly recovered from -5.28% on March 30 to -0.67% on April 1, while QQQ narrowed from -6.89% to -1.66%, showing that earlier panic pricing was significantly reversed; however, this appears more like short-term compensation rather than a complete shift in style leadership. Extending the view to three months, IWM still outperformed SPY (1.56% vs -3.65%), RSP also outperformed SPY (0.94% vs -3.65%), and SPYV continued to lead SPYG (0.09% vs -6.91%), indicating that small caps, equal-weighting, and value remain dominant in the medium term. Leading tech stocks are also recovering, with MAGS’ two-week decline narrowing from -9.02% on March 30 to -2.52%, but XMAG’s two-week change was only -0.13%, suggesting this rebound is more about valuation repair after catch-up declines rather than big tech taking over again.

III. Market Sentiment

Market sentiment continues to improve, but there is still a distance from true relaxation. The VIX fell to 24.54, indicating that the high-pressure state of previous days is continuing to ease, though levels above 24 are still considered relatively high. The CNN Fear & Greed Index rose from 15 to 16, remaining in the extreme fear zone, showing that investors' subjective risk appetite has not significantly reversed despite two consecutive days of rebounds. On the options level, the Put/Call ratio increased from 0.9024 to 0.938, indicating that protective positions are increasing even as indices rise. Taken together, these three indicators suggest the current situation is more about 'cautious repair' rather than a complete return to optimism.

IV. Market Scan

1. Index ETFs

Index ETFs continue to reflect the structure of 'tech stronger than traditional weights.' QQQ rose 1.24%, making it the strongest among major index ETFs, while DIA rose 0.49%, showing weaker momentum. Combining the four major indices, Nasdaq and Russell continue to lead, suggesting the market prioritizes repairing tech and high-elasticity sectors rather than shifting to broad-based balanced growth.

2. Sector Performance

Sector-level divergence is clearer than index trends. Industrials rose 1.67%, benefiting first from easing growth concerns; technology gained 1.51%, continuing the repair rhythm from the previous day; energy, however, plummeted 3.74%, becoming the weakest sector. Overall, capital is exiting energy, which previously benefited from high oil prices, while returning to growth- and interest rate-sensitive sectors like technology and manufacturing.

3. Seven tech giants

The seven major tech stocks did not return to a uniform rally. Google rose 2.80%, the strongest in this group; Tesla gained 2.56%, continuing its high-elasticity rebound; Netflix fell 0.62%, one of the few decliners. In other words, while the tech sector remains strong, leading forces are primarily concentrated in platforms and high-elasticity weights, without indiscriminate rises across the board.

4. Chinese Equities

Chinese concept stocks continue to recover, but consistency is low. Futu rose 2.40%, reflecting support from improved expectations of China’s economic prospects for brokerages and internet risk appetite; JD.com fell 2.37%, indicating funds are not simply extrapolating China-related cues into a broad-based sector-wide rally. Wednesday’s Chinese stock movement resembles selective recovery rather than an independent, comprehensive theme unfolding.

5. Cryptocurrencies

Bitcoin's latest quote is around $68,123, down slightly by 0.07% for the day, with the price itself essentially flat. Among related stocks, RIOT rose 1.54%, showing some funds are still willing to return to high-elasticity targets; however, CRCL fell 4.89%, indicating inconsistent risk appetites within the crypto chain. Compared to the stock market, Wednesday’s crypto direction looks more like local repair, without forming a strong consensus in risk preference diffusion.

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

595K Views