Financial Daily: Is the AI hype cooling down? US tech stocks fell for three consecutive days, while the yield on 30-year US Treasuries hit an intraday high not seen since 2007.

– Hot Topics

– Long-term government bond yields in major countries worldwide have risen to levels not seen in decades.

– The U.S. Securities and Exchange Commission (SEC) has proposed a new regulatory framework for crypto assets, aiming to relax restrictions on token issuance and financing.

– The Chief Economist of the European Central Bank stated that the current eurozone inflation rate of 3% remains above the 2% target, and the magnitude of this deviation should not be underestimated.

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– Stock Markets

[U.S. Market] Concerns over AI debtification dominate the market; the S&P 500 closes lower for three consecutive days.

On Tuesday, the three major U.S. stock indices closed lower for the third consecutive trading day, with concerns over AI debtification becoming the core market conflict. Investors have begun pricing in the debt risks associated with AI capital expenditures, making chip stocks the hardest hit, while the energy and healthcare sectors led gains against the trend.

At the close, the S&P 500 Index fell 0.69% to 7,691.76 points, marking a cumulative decline of 1.37% over the last three trading sessions; the Dow Jones Industrial Average dropped 0.22% to 53,343.40 points; and the Nasdaq Composite Index declined 1.33% to 26,289.711 points. The Philadelphia Semiconductor Index plunged 4.98% to 11,992.463 points, recording its largest single-day drop since July 29. The VIX Fear Index rose 4.28% to 15.84 points.

The 'Magnificent Seven' U.S. tech stocks generally weakened: Meta closed down 4.45%, NVIDIA fell 2.34%, Amazon dropped 0.71%, and Tesla declined 0.72%; Apple bucked the trend with a 1.45% gain, while Google Class A shares edged up 0.06%. The Nasdaq Golden Dragon China Index closed down 1.01% at 6,256.97 points. Among popular Chinese concept stocks, 21Vianet plummeted 16.92%, Baidu slumped 12.73% amid AI debt concerns and funding pressures, XPeng fell 3.77%, and Xiaomi Group dropped 1.58%; New Oriental Education rose 2.48%, and Alibaba gained 2.7%. In individual stock news, SpaceX shares fell nearly 2%.

[European Market] European stocks fall for five consecutive days, marking the longest losing streak in nearly nine months.

On Tuesday, European stock markets declined for the fifth consecutive trading session, setting the longest losing streak in nearly nine months, with semiconductor stocks being the main drag. At the close, the pan-European STOXX 600 Index fell 0.69%, extending its five-day losing streak; the pan-European STOXX 50 Index dropped 0.95% to 6,468.17 points.

Germany's DAX 30 Index closed down 0.80% at 26,128.36 points, marking its fifth consecutive daily decline (with a cumulative drop of 1.32% during the period); France's CAC 40 Index fell 0.82% to 8,509.36 points; the UK's FTSE 100 Index edged up 0.07% to 10,728.04 points; and Italy's FTSE MIB Index dropped 1.06% to 53,017.84 points.

[Asian Market] Asia-Pacific stock markets generally weakened, with the Nikkei Index falling more than 2.5%.

Major Asian stock markets generally weakened on Tuesday, with Japanese stocks seeing significant declines, while South Korean and Singaporean markets also recorded drops of over 1%. The Nikkei 225 closed down 2.54% at 67,460.73 points; the South Korean KOSPI index fell 1.55% to close at 6,869.83 points; the FTSE Straits Times Index in Singapore dropped 1.16% to 5,701.40 points; and Thailand's SET Index declined 0.30% to 1,621.62 points.

[Hong Kong Market] Hong Kong stocks showed divergent trends; the Hang Seng Index remained stable, but the Hang Seng Tech Index fell nearly 1%.

The three major Hong Kong stock indices performed unevenly on Tuesday. The Hang Seng Index oscillated and rebounded in the afternoon, recording a slight gain, while the Hang Seng Tech Index was dragged down by heavy losses in the AI and chip sectors, falling nearly 1%. At the close, the Hang Seng Index edged up 0.07% to 25,471.15 points; the Hang Seng Tech Index closed down 0.90% at 4,739.18 points; and the Hang Seng China Enterprises Index rose 0.16% to 8,453.20 points.

In terms of sectors, the two giants of large AI models suffered heavy setbacks. Zhipu AI's short-selling data hit a record high, causing its stock price to plunge over 13%; MINIMAX also weakened, dropping 5%. Chip and semiconductor stocks were under pressure as well, with Hua Hong Semiconductor (Hongli) falling nearly 8%, and SMIC following suit. The collective adjustment in the global semiconductor sector continued to weigh on peers in Hong Kong. Performance among heavyweight tech and internet stocks was mixed: JD.com and Meituan fell over 1%; Alibaba rose over 3%, providing some support to the broader market. Horizonrobot and Lenovo Group both dropped over 5%. Pork-related concept stocks strengthened across the board, with Muyuan Foods rising 4.56%, COFCO Home & Health increasing 4.09%, and Dekang Agriculture gaining 3.72%, driven by rising average live hog prices that boosted sector sentiment. Coal stocks also strengthened, with Huili Resources surging 6.95% on policy利好 from the "15th Five-Year Plan for Coal Industry Development," China Coal Energy rising 1.90%, and Yankuang Energy up 1.69%. Pharmaceutical stocks also stood out, with Wuxi Bio rising over 5%. Optical communication and PCB stocks adjusted in line with the AI sector, with Guanghe Technology falling 8.23%, Kingboard Laminates dropping 8.12%, and Shenghong Technology declining 5.92%.

[A-Share Market] The three major A-share indices showed divergent trends, with the Shanghai Composite Index closing slightly higher.

The three major A-share indices diverged on Tuesday. The agricultural sector exploded across the board, while semiconductors and AI applications continued their adjustment trend. At the close, the Shanghai Composite Index rose 0.19% to 3,990.30 points; the Shenzhen Component Index fell 0.56% to 14,622.50 points; and the ChiNext Index dropped 0.92% to 3,705.56 points.

Regarding sector concepts, the agricultural sector saw a broad surge. JPMorgan warned that the next global food crisis could erupt next year, and strong El Niño conditions have entered the practical monitoring phase, providing strong catalysts for the sector. Qiule Seed Industry hit the 30% limit up; Kangnong Seed Industry rose 24.47%; Shennong Seed Industry and Hualv Biology both hit the 20% limit up. The robotics sector saw unusual late-session gains, with Zhengyu Industrial and Xuguang Electronics hitting the limit up for three consecutive days; Rifeng Shares and Huguang Shares hit the limit up; while Rongtai Shares, Xiangyang Bearing, and Nanfang Jinggong followed with gains. Energy equipment, oil and natural gas, coal, shipping, and banking sectors strengthened simultaneously. Themes such as AI applications, computing power leasing, innovative drugs, and commercial aerospace weakened, as capital flowed from previously high-gaining tech growth areas into agriculture and energy sectors.

– Bonds

[US Treasuries] US Treasury yields declined, with long-end yields hitting intraday highs not seen since 2007.

The US Treasury market experienced volatile trading on Tuesday, with long-end yields spiking intraday to levels not seen since 2007 before pulling back. At the New York close, the yield on the 10-year US Treasury note fell 1.59 basis points to 4.7060%; the 2-year US Treasury yield dropped 0.23 basis points to 4.1730%; and the 30-year US Treasury bond yield fell 2.03 basis points to 5.2858%, after touching an intraday high of 5.3371%, a level not reached since 2007.

[Non-US Bond Markets] European sovereign bond yields continued to rise, with medium-to-long-term yields in Germany, France, and Italy hitting multi-year highs.

Sovereign bond yields in major European countries rose for several consecutive days, with medium- and long-term yields generally hitting new highs since 2011. The yield on Germany's 10-year sovereign bonds rose by 3.8 basis points, marking three consecutive sessions of gains to close at 3.259%; the yield on Germany's 2-year sovereign bonds rose by 5.0 basis points to 2.853%.

France's 10-year sovereign bond yield rose by 4.8 basis points, rising for the third consecutive session to 4.114%; Italy's 10-year sovereign bond yield rose by 5.8 basis points to 4.073%. The UK's 10-year sovereign bond yield rose by 1.5 basis points to 5.075%, while the 2-year yield rose by 0.7 basis points to 4.374%.

[China Bond Market] Treasury futures rose across the board on Tuesday

On Tuesday, treasury futures across the board recorded gains, supported by structural adjustments in A-shares and risk-off sentiment in the bond market. At the close, the main contract for 30-year treasury bonds rose 0.27%, the 10-year main contract rose 0.07%, the 5-year main contract rose 0.04%, and the 2-year main contract rose 0.03%.

– Foreign Exchange

[USD] The US Dollar Index held steady, with the yen approaching the 160 level.

The US Dollar Index remained largely flat on Tuesday, as the market lacked a clear direction amidst intertwined concerns over US-Iran tensions and AI-related debt. At the New York close, the ICE US Dollar Index was unchanged at 99.638 points, while the Bloomberg US Dollar Index rose 0.08% to 1,201.24 points.

The USD/JPY pair rose 0.09% to 159.61 yen, continuing to approach the key 160 level; the EUR/USD pair traded at $1.15760, down slightly by 0.03%; the GBP/USD pair fell 0.04% to $1.35356.

[CNY] The USD/offshore CNY rate stood at 6.7463 yuan.

At the New York close, the USD/offshore CNY rate rose 32 pips from the previous session's close to 6.7463 yuan. The onshore CNY/USD rate fell 37 pips from the previous night's close to 6.7454 yuan.

[Virtual Assets] The cryptocurrency market strengthened.

The cryptocurrency market strengthened on Tuesday, with Bitcoin rising approximately 2.21% to break through the $65,000 level; Ethereum rose about 1.07% to $1,919.06.

– Commodities

[Energy] Oil prices edge up; diesel crack spread surges to $70

International oil prices edged slightly higher on Tuesday. Trump stated there are no talks with Iran but insisted that the Strait of Hormuz remains open. Crude oil prices remained largely flat, while the diesel crack spread surged to $70, approaching crisis highs seen in 2022. At the New York close, US crude oil futures rose 0.52% to settle at $84.94 per barrel; Brent crude futures gained 0.16% to settle at $91.02 per barrel.

[Precious Metals] Spot gold falls nearly 2%, breaking below $4,400

Precious Metals:Gold prices retreated due to a stabilizing US dollar and marginal shifts in risk appetite. At the New York close, spot gold fell approximately 1.9% to $4,331.77 per ounce, breaking below the $4,400 threshold.

Metals Futures Market:At the New York close, spot silver dropped about 3.74% to $63.3150 per ounce; US copper futures fell 2.42% to $6.5535 per pound.

[Disclaimer]

The above content is provided by Harbour Family Office (hereinafter referred to as 'Harbour FO') and is excerpted from market information sourced from various channels. Harbour FO and its group companies were not involved in preparing this content and do not explicitly or implicitly endorse or approve it. This article is for reference purposes only and does not constitute any investment or trading advice. Investing involves risks. You should independently evaluate and assess this information and are advised to consult professionals before making any investment or trading decisions. Without authorization from Harbour FO, no person may reproduce, copy in whole or in part, or disseminate this content to the public in any form. Copyright belongs to Harbour FO and its content providers.

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