Financial Daily: U.S. Proposes Tariffs on Multiple Countries, Beige Book Warns of Inflation; U.S. Stocks End Nine-Day Rally as Global Risk-Aversion Rises

- Key Focus

– The U.S. State Department issued a statement saying that, under U.S.-led negotiations, Israel and Lebanon have agreed to a ceasefire.

– The U.S. government has proposed imposing tariffs of up to 12.5% on imported goods from 60 countries and regions.

– The Federal Reserve's Beige Book indicates that inflationary pressures are currently evident in the U.S., with both consumers and businesses feeling the strain.

– The European Union has proposed new regulations aimed at boosting Europe's domestic cloud computing, AI, and semiconductor industries to reduce reliance on U.S. tech companies.

Content compiled by 'Harbor Family Office,' a subsidiary of Henry Jia Group. It does not constitute any investment or trading advice. Stay tuned.

- Stock Market

[U.S. Markets] The rally in U.S. stocks ended, with all three major indices closing lower.

On Wednesday, conflict in the Middle East escalated again, with Kuwait International Airport attacked and the U.S. announcing it had conducted a new round of defensive strikes in southern Iran. The intensifying conflict dashed market hopes for an imminent ceasefire and the reopening of the Strait of Hormuz. Oil prices surged sharply, while U.S. equities weakened alongside Treasury bonds. All three major U.S. stock indices closed lower, ending a multi-day streak of record highs. The S&P 500 and Nasdaq ended their nine-day winning streaks, technology stocks broadly pulled back, and market fear levels rose.

At the close, the S&P 500 fell 0.74% to 7,553.68; the Nasdaq declined 0.89% to 26,853.976; and the Dow Jones Industrial Average dropped 1.21% to 50,687.07. The VIX fear index rose 2.09% to 16.10. The Philadelphia Semiconductor Index gained 1.39%, closing at 13,916.96.

The U.S. tech mega-cap index fell 1.74%, with only Meta rising 4.24%; all other components declined. Apple dropped 1.57%, Amazon slid 2.53%, Microsoft fell 3.17%, and NVIDIA declined 3.62%. The Nasdaq Golden Dragon China Index fell 2.47% to 6,637.29. Among notable Chinese ADRs, Kingsoft Cloud dropped 6.9% and Alibaba fell 2.5%. In individual stocks, Taiwan Semiconductor declined 2.14%, Marvell Technology rose 3.7%, and SanDisk gained 6.5%.

[European Markets] All major European indices declined.

On Wednesday, all major European indices declined. At the close, the pan-European STOXX 600 index fell 0.66% to 621.19, while the STOXX 50 dropped 0.89% to 6,053.57.

Germany's DAX 30 fell 1.31% to 24,795.94; France's CAC 40 declined 0.71% to 8,150.42; the UK's FTSE 100 dropped 0.40% to 10,332.30; and Italy's FTSE MIB slid 1.07% to 50,038.16.

[Asian Markets] Most Asian stock markets closed higher on Wednesday, with Japan's benchmark index hitting a new record high.

Most Asian stock markets rose on Wednesday, while South Korean and Thai markets were closed. At the close, the Nikkei 225 gained 2.50% to 68,402.13 points, reaching another all-time high; the FTSE Straits Times Index in Singapore advanced 0.76% to 5,136.29 points.

[Hong Kong Market] All three major Hong Kong indices closed lower, with the Hang Seng Tech Index falling more than 2.7%.

Hong Kong stocks pulled back on Wednesday, with all three major indices closing in the red and the Hang Seng Tech Index dropping over 2.7%. At the close, the Hang Seng Index fell 1.56% to 25,633.21 points; the Hang Seng Tech Index declined 2.74% to 5,056.97 points; and the Hang Seng China Enterprises Index dropped 1.90% to 8,596.59 points. In sector performance, optical communication stocks generally strengthened, with Lightelligence surging 16.83% and Yangtze Optical Fiber & Cable rising 10.65%; semiconductor-related stocks were active, with EpiGrowth Technology gaining 13.68% and Changchun CMOS Image Sensor Technology up 10.26%. Software stocks saw notable declines, with Beisen Holdings falling nearly 10%, and Lion Teng Holdings and Jushuitan dropping more than 8%.

[A-Share Market] A-share markets traded higher amid volatility, with all three major indices closing up.

A-share markets moved higher amid volatility but pared some gains in the afternoon session, with all three major indices finishing in positive territory and the ChiNext Index rising more than 1.5%. At the close, the Shanghai Composite Index gained 0.22% to 4,083.97 points; the Shenzhen Component Index rose 0.73% to 15,704.71 points; and the ChiNext Index climbed 1.65% to 4,122.99 points. In terms of sectors and themes, computing hardware and semiconductor stocks rallied again, driven by Marvell Technology’s strong share price performance in the U.S. and recent supportive news; Yuantec surged over 16%, Yutai Microelectronics rose 13.59%, and Datang Telecom reached its daily trading limit. Commercial aerospace stocks gained intraday, with Jingdun Shares and Torch Electron rising over 9%, and Aerospace Electric climbing 7.39%. Energy sectors such as coal and oil & gas advanced, while AI application and short-video gaming sectors retreated.

- Bonds

[U.S. Treasuries] U.S. Treasury yields dipped initially before rebounding, with the 10-year yield rising by 3.4 basis points.

U.S. Treasury yields followed a V-shaped path, first declining then rising. By the New York close, the 10-year U.S. Treasury yield had increased by 3.4 basis points to 4.489%, while the two-year yield rose by 2.9 basis points to 4.068%.

[Non-U.S. Bond Markets] Sovereign bond yields in major European countries broadly rose.

Sovereign bond yields in major European countries broadly rose. Germany’s 10-year yield climbed 6 basis points to 3.035%, and its two-year yield rose 5.1 basis points to 2.671%. The UK 10-year yield gained 1.4 basis points, France’s 10-year yield rose 7.7 basis points, Italy’s 10-year yield increased by 8.6 basis points, and Spain’s 10-year yield climbed 7.0 basis points.

[China Bond Market] Treasury futures declined across the board on Wednesday

Treasury futures declined across the board on Wednesday. As of the close, the benchmark 30-year Treasury futures contract fell 0.24%, the 10-year contract dropped 0.06%, the 5-year contract slid 0.04%, and the 2-year contract decreased 0.02%.

– Foreign exchange

[US Dollar] The dollar rose with volatility, breaking above the 160 level against the yen

The US dollar rose with volatility on Wednesday. At the New York close, the ICE US Dollar Index gained 0.31% to 99.529, while the Bloomberg Dollar Spot Index also rose 0.31% to 1,205.39.

The dollar strengthened modestly against major global currencies. The dollar rose 0.07% against the yen to ¥160.02, breaking through the 160 mark; the euro fell 0.31% against the dollar to $1.1595.

[Renminbi] USD/CNH traded at 6.7803

At the New York close, the offshore renminbi (CNH) weakened by 180 pips from the previous session’s close, trading at 6.7803 against the US dollar. Onshore renminbi (CNY) depreciated by 98 pips from the prior session's closing rate, settling at 6.7720 per dollar.

[Digital Assets] Cryptocurrencies continued to decline, with Bitcoin falling below $66,000

Cryptocurrencies extended their downward trend on Wednesday, with Bitcoin dropping 1.78% to $65,700 and Ethereum sliding 4.1% to below $1,830.

– Products

[Energy] Rising Middle East tensions boosted oil prices, with US crude futures up 2.41%

With escalating tensions between the U.S. and Iran, the market currently sees little chance of a near-term diplomatic resolution, pushing oil prices higher. At the close of New York trading, U.S. crude futures rose 2.41%, settling at $96.02 per barrel; Brent crude futures gained 1.89%, settling at $97.81 per barrel.

[Precious Metals] Precious and non-ferrous metal prices declined significantly

Precious Metals:Gold prices fluctuated lower. At the close of New York trading, spot gold fell 1.23% to $4,433.51 per ounce; U.S. gold futures dropped 1.34% to $4,459.40 per ounce.

Metals Futures Market:At the close of New York trading, spot silver fell 3.2% to $72.7086 per ounce; U.S. silver futures declined 3.50% to $72.910 per ounce. U.S. copper futures dropped 3%, spot platinum fell 3.8%, and spot palladium declined 4.75%.

[Disclaimer]

The above content is provided by Harbor Family Office (hereinafter referred to as "Harbor Family Office"), summarized from various market information sources. Harbor Family Office and its group members did not participate in preparing the content nor explicitly or implicitly endorse it. This article is for reference only and does not constitute any investment or trading advice. Investment involves risks. Readers should independently assess and judge this material and are advised to seek professional opinions before making any related investments or trades. Without authorization, no one may reproduce, copy, or publish this content in whole or in part to the public in any manner. Copyright belongs to Harbor Family Office and related providers.

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