Financial Daily: US stocks hit by a 'triple shock,' while US-listed Chinese stocks and Hong Kong equities break out against the trend! Where is global capital flowing?

– Hot Topics

– The Federal Reserve kept interest rates unchanged, but internal hawkish divisions were evident.

– South Korea's Ministry of Finance announced it will impose investment limits on single-stock leveraged ETFs.

– Meta's free cash flow in Q2 dropped by over 90%, and its stock price fell nearly 10% in after-hours U.S. trading.

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– Stock Markets

[U.S. Market] Renewed Iran conflict and divisions among Fed hawks triggered a plunge of over 1,000 points in the Dow Jones Industrial Average.

Global markets faced a triple shock on Wednesday from renewed Iran conflict, hawkish divisions within the Federal Reserve, and renewed skepticism toward AI narratives, leading to sharp declines across all three major U.S. indices. The Dow recorded its largest single-day point drop in 15 months, while the Nasdaq closed lower for the sixth consecutive trading day. At the close, the Dow Jones Industrial Average fell 2.19% to 51,594.14 points; the S&P 500 declined 1.52% to 7,316.15 points; and the Nasdaq Composite dropped 1.74% to 24,442.942 points. The VIX fear index surged 13.29% to close at 20.63, while the Philadelphia Semiconductor Index fell 5.33% to 10,447.489 points, extending its recent downtrend.

The Magnificent Seven tech stocks index declined 0.80%. NVIDIA dropped 3.55%, Tesla fell 2.97%, Amazon slid 1.82%, Meta lost 1.31%, Microsoft declined 0.71%, and Apple dipped 0.56%; Alphabet A rose 0.90%. The Nasdaq Golden Dragon China Index bucked the trend, rising 1.73% to close at 6,434.96 points—holding above its 50-day moving average for two consecutive sessions and approaching its 100-day moving average, with a cumulative rebound of 5.41% over the past three trading days. Among notable Chinese ADRs, New Oriental surged 14.7% on potential earnings or policy tailwinds, Xiaomi Group gained 8.1%, Li Auto rose 4.6%, PDD Holdings and Tencent advanced 3.2%, Bilibili and XPeng climbed over 2%, and NetEase increased 1.8%. In individual stocks, Circle fell 4.68%, TSMC ADR dropped 4.48%, and AMD declined 5.51%.

[European Market] Major European stock markets broadly weakened, while the UK index rose against the trend.

European equities broadly declined on Wednesday as renewed Middle East conflict pushed oil prices higher, reigniting market concerns over inflation outlook. At the close, the pan-European STOXX 600 index fell 0.29% to 645.01 points; the STOXX 50 index declined 0.65% to 6,248.84 points.

Germany's DAX 30 index edged down 0.01% to 25,460.48 points; France's CAC 40 dropped 0.60% to 8,408.27 points; the UK’s FTSE 100 rose against the trend by 0.34% to 10,908.41 points; Italy's FTSE MIB declined 0.49% to 51,443.11 points.

[Asian Market] South Korea’s stock market triggered circuit breakers for two consecutive days, closing down nearly 6%.

Asian markets remained mixed on Wednesday, with South Korea’s market hitting another circuit breaker amid a sharp selloff in semiconductor heavyweights. The KOSPI index plunged 5.98% to close at 5,663.24 points, briefly tumbling more than 12% intraday to trigger the circuit breaker mechanism—the second straight day of such an event—as the full-scale collapse in the semiconductor sector continued to dominate market sentiment. Japan’s Nikkei 225 fell 1.49% to 61,434.19 points, tracking overnight weakness in U.S. chip stocks but showing relatively restrained losses. The FTSE Straits Times Singapore Index rose against the trend by 1.57% to 5,704.54 points; Thailand’s SET Index declined 1.21% to 1,624.47 points.

[Hong Kong Market] Hong Kong stocks opened and traded higher, with the Hang Seng Index rising nearly 2%.

On Wednesday, all three major Hong Kong stock indices strengthened across the board, with both the Hang Seng Index and the Hang Seng Tech Index posting significant gains. At the close, the Hang Seng Index rose 1.96% to 25,807.92 points, hitting a new high since the rebound began; the Hang Seng Tech Index gained 2.84% to close at 4,864.73 points; and the Hang Seng China Enterprises Index advanced 2.22% to 8,623.52 points.

By sector, auto stocks surged broadly and led market gains. Li Auto jumped 9.90%, boosted by progress in embodied intelligent robot planning and production; Leapmotor rose 9.50%, Chery Automobile climbed 8.43%, and Geely Auto gained 6.17%. Market sources indicated that several domestic automakers have moved beyond the concept validation phase for robotics and entered critical pre-mass-production stages, providing strong catalysts for the sector. Large-cap tech and internet stocks also rebounded broadly, with Xiaomi Group surging 8.95%, Tencent rising 4.29%, and Alibaba up 1.43%. New consumer stocks similarly recovered, with Mixue Group gaining 7.71%, Weilong Delicious up 7.43%, and Blue Ark jumping nearly 16%. Meanwhile, semiconductor and AI hardware stocks remained under pressure, with Kingdee Microelectronics falling 15.80%, Sunway Technology down 7.90%, KB Laminates declining 6.52%, and Yangtze Optical Fiber & Cable dropping 5.95%. Memory chip stocks also performed weakly, with GigaDevice down 3.24% and Montage Technology falling 2.88%.

[A-Share Market] A-shares staged a counter-trend rebound in the afternoon, with broad-based strength across the consumer sector

On Wednesday, mainland China’s A-share market opened lower amid overnight weakness in the semiconductor sector and external shocks from South Korea’s market circuit breaker. However, sentiment gradually improved in the afternoon, driving a collective rebound across the three major indices, with both the Shenzhen Component Index and the ChiNext Index rising more than 1%. At the close, the Shanghai Composite Index gained 0.40% to 3,828.47 points; the Shenzhen Component Index rose 1.10% to 13,658.44 points; and the ChiNext Index advanced 1.55% to 3,378.70 points.

In terms of sectors and themes, the broad consumer segment emerged as the day’s strongest driver. The education sector surged 5.56%, with QuanTong Education hitting a 20% daily trading limit and multiple stocks including Huatu Shanding rising over 10%. The gaming sector gained 5.43%, with Dianhun Network reaching its daily limit and Giant Network climbing nearly 10%, supported by multiple companies’ strong mid-year profit forecasts. Dairy-related stocks rose nearly 6%, with Huanlejia hitting a 20% limit and Juneyao Health, Liziyuan, and Sanyuan Co., Ltd. all locking their daily trading limits. The food and beverage sector as a whole rose over 2.5%, with dozens of stocks—including Bestore, Nanshan Foods, Anji Foods, Baolingbao, and Ximai Food—reaching their daily trading limits. Capital continued rotating out of highly volatile tech sectors and into defensive, essential consumer names. The semiconductor supply chain remained under pressure, with Tongfu Microelectronics hitting its daily trading limit on the downside, and GigaDevice briefly touching its daily limit multiple times during the session before rebounding to close down 6.81%. Memory chip stocks weakened overall, though Changxin Technology bucked the trend with a surge of over 12%.

- Bonds

[U.S. Treasuries] Long-end U.S. Treasury futures yields rose significantly

U.S. Treasury markets faced heavy selling on Wednesday, as the collapse of an Iran ceasefire triggered a sharp spike in oil prices, reigniting inflation concerns. Hawkish signals from the Federal Reserve’s policy decision further pushed long-end yields higher. At the New York close, the yield on the 10-year U.S. Treasury note rose 7.10 basis points to 4.6773%; the 2-year yield fell 1.44 basis points to 4.2726%; and the 30-year yield surged sharply above 5.2%, reaching its highest level since June 2007.

[Non-U.S. Bond Markets] German government bond yields rose significantly

Government bond yields in major European countries reversed a three-day downtrend, as renewed escalation in Middle East conflicts pushed oil prices higher and markets remained cautious ahead of the Federal Reserve’s policy decision, pressuring bond markets broadly. Germany’s 10-year Bund yield rose 4 basis points to 3.148%, while the 2-year yield increased 6 basis points to 2.8%.

[China Bond Market] Treasury futures were mixed, with long-end contracts weakening while short-end contracts held steady

On Wednesday, Treasury futures showed mixed performance. As of the close, the benchmark 30-year Treasury futures contract fell 0.23%, while the 10-year, 5-year, and 2-year Treasury futures contracts each rose 0.02%.

– Foreign exchange

[USD] The US Dollar Index weakened after the Fed’s policy decision, with the euro rebounding by more than 0.6%.

On Wednesday, the US Dollar Index weakened significantly following the Federal Reserve's interest rate decision, compounded by escalating tensions in the Middle East boosting demand for safe-haven currencies. At the New York close, the ICE US Dollar Index declined 0.53% to 100.884, while the Bloomberg Dollar Spot Index fell 0.34% to 1,217.55.

The US dollar broadly weakened against major global currencies: USD/JPY dropped 0.27% to 163.40; EUR/USD rose over 0.6%; GBP/USD gained 0.51%; USD/CHF fell 0.54%; and AUD/USD pared gains to 0.32%.

[CNY] USD/CNH traded at 6.7605.

At the New York close, USD/CNH was down 56 pips from the previous trading day’s close, settling at 6.7605—approaching the June 16 closing level of 6.7566. Onshore CNY strengthened by 80 pips from the prior session’s night-session close, ending at 6.7630 against the US dollar.

[Digital Assets] The cryptocurrency market remained weak, with Bitcoin breaking below $64,000.

On Wednesday, the cryptocurrency market remained generally soft, with Bitcoin sliding below $64,000 and Ethereum falling under $1,900. Heightened risk aversion and broad-based pressure on risk assets weighed on the crypto market.

– Products

[Energy] Renewed conflict in Iran triggered a sharp oil price rally, pushing Brent crude back above the $90 mark.

On Wednesday, international oil prices surged sharply as the US-Iran ceasefire agreement collapsed, reigniting concerns over Middle Eastern supply disruptions. At the New York close, US crude futures settled up 6.56% at $84.46 per barrel, while Brent crude futures jumped 7.91% to settle at $90.74 per barrel, reclaiming the $90 threshold.

[Precious Metals] Safe-haven demand drove gold prices higher, briefly surpassing $4,100 during the session.

Precious Metals:Gold prices rebounded notably, supported by escalating tensions in the Middle East and a weaker U.S. dollar. At the New York close, spot gold rose approximately 0.87% to $4,064.63 per ounce; U.S. gold futures gained 0.91%, settling at $4,123.30 per ounce.

Metals Futures Market:At the New York close, spot silver rose 0.80% to $57.6059 per ounce; U.S. silver futures gained 0.78%, closing at $57.825 per ounce; U.S. copper futures dipped slightly by 0.18% to $6.3480 per pound. Spot platinum rose 0.54%, while spot palladium declined 0.40%.

[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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