Financial Daily: US Core PCE exceeds expectations, NVIDIA rises over 4% in after-hours trading, global markets range-bound

– Hot Topics

– US President Trump signed an executive order declaring a national emergency and banning the use of certain foreign-made equipment in the US power grid.

– Reuters reported that Iran and Oman are still negotiating details regarding the Strait of Hormuz agreement.

– US July PCE data came in higher than expected, fueling market expectations for a Federal Reserve rate hike.

– NVIDIA's earnings report showed that its Q2 revenue and Q3 guidance both exceeded market expectations, sending its after-hours stock price up more than 4%.

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– Stock Markets

[US Market] Core PCE exceeded expectations, combined with wait-and-see sentiment ahead of NVIDIA's earnings; US stocks closed slightly lower.

Trading in US stocks was light on Wednesday, with the three major indices closing slightly lower. July core PCE rose 3.3% year-over-year, remaining well above the policy target. The market has fully priced in rate hike expectations for the year. Investors remained cautious ahead of NVIDIA's after-hours earnings release, leaving the broader market directionless.

At the close, the S&P 500 fell 0.02% to 7,675.70; the Dow Jones Industrial Average dropped 0.21% to 53,463.88, ending a two-day winning streak; the Nasdaq Composite declined 0.08% to 26,130.197. The Philadelphia Semiconductor Index edged up 0.20% to 11,611.238. The VIX Volatility Index fell 1.55% to 15.21.

Performance among the US tech 'Mag 7' was mixed: Meta rose 1.07%, and Apple gained 1.15%; NVIDIA fell 1.59% ahead of its earnings, Google dropped 1.43%, Tesla declined 1.26%, and Amazon slipped 0.30%. The Nasdaq Golden Dragon China Index closed down 0.61% at 6,230.03. Among active Chinese ADRs, Qifu Technology plunged 18.91%, JinkoSolar fell 11.87%, NetEase dropped 4.17%, PDD Holdings declined 1.15%, and Tencent slipped 0.16%; Boss Zhipin surged 15.65% boosted by positive earnings or policy news, while Alibaba rose 0.33%.

[European Market] European stocks showed mixed performance with limited overall movement.

European stocks saw limited overall movement on Wednesday, with major markets showing mixed results. At the close, the pan-European STOXX 600 Index fell 0.01% to 656.41, while the STOXX Europe 50 Index rose 0.23% to 6,470.74.

Germany's DAX 30 index closed up 0.08% at 26,285.96 points, having surged earlier before pulling back; France's CAC 40 index closed up 0.27% at 8,462.39 points; Italy's FTSE MIB index closed up 0.31% at 52,882.99 points; the UK's FTSE 100 index closed down 0.07% at 10,878.12 points.

[Asian Markets] Asia-Pacific stock markets generally strengthened, with South Korea's KOSPI rising nearly 1%.

Major Asian stock markets generally rose on Wednesday, led by gains in the South Korean market. The Nikkei 225 Index closed up 0.62% at 66,262.16 points; South Korea's KOSPI Index closed up 0.97% at 6,808.21 points; Singapore's FTSE Straits Times Index closed down 0.25% at 5,721.59 points; Thailand's SET Index closed up 0.71% at 1,607.27 points.

[Hong Kong Market] Hong Kong's three major indices opened higher and continued to rise, closing with broad-based gains.

Hong Kong's three major indices strengthened across the board on Wednesday, with both the Hang Seng Index and the Hang Seng China Enterprises Index rising more than 1%. Brokerage stocks and the non-ferrous metals sector served as the core engines driving the market higher. At the close, the Hang Seng Index was up 0.56% at 25,652.97 points; the Hang Seng Tech Index was up 0.82% at 4,626.50 points; and the Hang Seng China Enterprises Index was up 1.05% at 8,533.84 points.

In terms of sectors, brokerage stocks surged broadly. Listed brokerages in the A-share market reported strong growth in their interim results, with high dividends and payouts becoming industry highlights. CICC rose 8.25%, China Merchants Securities rose 6.59%, and Financial Street Securities rose 5.93%. Non-ferrous metal stocks also rallied significantly, as LME copper futures hit a record closing price overnight, directly igniting bullish sentiment in the sector. Jiangxi Copper rose 9.92%, China Nonferrous Mining rose 9.90%, and Lygend Resources rose 4.34%. The biopharmaceutical sector pulled back; while the innovative drug industry is gradually moving past the early stage of cash-burning R&D, the sector faced profit-taking after a recent consecutive rebound. Pharmaron fell 4.81%, Wuxi Bio fell 2.78%, and Joinn Laboratories fell 1.27%. Coal stocks faced short-term pressure, with Nanan Resources falling 6.08% and E-Commodities falling 3.13%. However, Zheshang Securities believes that pessimistic positions have been fully cleared, and concerns over overcapacity, high-carbon asset impairment, and safety accidents have all been offset by policy measures, making the medium-to-long-term valuation repair trend still worth anticipating.

[A-Share Market] All three major A-share indices rose, with the Shanghai Composite Index returning above the 3,900-point mark.

All three major A-share indices rose on Wednesday, with the Shanghai Composite reclaiming the 3,900-point level. At the close, the Shanghai Composite Index was up 0.59% at 3,912.52 points; the Shenzhen Component Index was up 0.69% at 13,841.33 points; and the ChiNext Index was up 0.51% at 3,414.88 points.

Regarding sectors and concepts, the securities sector led the gains, with Jinlong Shares, Xiangcai Shares, and Hengyin Technology hitting their daily limit up. Leading brokerages also strengthened, with CITIC Securities rising 2.28% and Changjiang Securities rising 5.58%. As of August 25, 20 listed brokerages had disclosed their 2026 semi-annual reports, showing generally strong performance growth. The non-ferrous metals sector was also robust, with industrial metals leading and precious metals following. Jiangxi Copper, Baiyin Nonferrous, Jinchengxin, and Jingyi Shares hit their daily limit up; Luoyang Molybdenum rose 6.35%, Tongling Nonferrous Metals rose 4.98%, and Zijin Mining rose 2.35%. LME copper futures hit a record closing price overnight, directly fueling market sentiment. Gold-related stocks achieved independent strength within the non-ferrous metals theme, with Shenzhen Zhonghua A hitting its daily limit for the fifth consecutive session, and Dr. Shares hitting its 20% limit up. The CPO (Co-Packaged Optics) sector turned positive in the afternoon, with Cambridge Technologies hitting its limit up, Robotco rising over 7%, and Luxshare Precision rising over 4%. The biopharmaceutical sector showed significant divergence. The vaccine segment strengthened driven by overseas catalysts, with CanSino Biologics hitting its 20% limit up, Wantai Biological hitting its limit up, Zhifei Biological Products rising 8.67%, and Walvax Biotechnology rising 5.83%. The CRO concept adjusted collectively, with Chengda Pharmaceutical falling 5.21%, Pharmaron falling 4.83%, Yiqiao Shenzhou falling 4.51%, and InnoCare Pharma falling 4.08%. Unitree Robotics fell for five consecutive trading days, with its share price dropping below 600 yuan.

– Bonds

[US Treasuries] Core PCE exceeding expectations boosted rate hike anticipations, sending US Treasury yields higher across the curve.

On Wednesday, US Treasury yields rose across the board. The July core PCE price index rose 3.3% year-on-year, remaining well above the policy target. Money markets have fully priced in expectations of a rate hike within the year, driving yields higher. At the New York close, the yield on the 10-year US Treasury note rose 2.97 basis points to 4.6584%; the yield on the 2-year US Treasury note rose 4.56 basis points to 4.2196%; and the yield on the 30-year US Treasury bond rose 1.35 basis points to 5.1785%.

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

Sovereign bond yields in major European countries followed the trend of US Treasuries, rising across the board. The yield on Germany's 10-year bund rose 3.3 basis points to 3.234%, while the 2-year bund yield rose 3.0 basis points to 2.842%. The UK's 10-year gilt yield rose 3.3 basis points to 5.020%, and the 2-year gilt yield rose 3.0 basis points to 4.343%. France's 10-year OAT yield rose 2.9 basis points to 4.078%, and Italy's 10-year BTP yield rose 6 basis points to 4.059%.

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

Treasury futures weakened across the board on Wednesday. By the close, the main contract for 30-year Treasury futures fell 0.15%, the 10-year main contract fell 0.08%, the 5-year main contract fell 0.03%, and the 2-year main contract fell 0.07%.

– Foreign Exchange

[US Dollar] Core PCE boosts the US dollar; index climbs back above the 99 mark

The US Dollar Index strengthened significantly on Wednesday. The July core PCE data reinforced market expectations of a Fed rate hike within the year, pushing the dollar back above the 99 level. At the New York close, the ICE US Dollar Index rose 0.25% to 99.164, and the Bloomberg US Dollar Index rose 0.20% to 1,194.71.

The US dollar generally strengthened against major global currencies. The USD/JPY pair rose 0.11% to 159.37 yen; EUR/USD fell 0.20% to 1.1652; GBP/USD fell 0.42% to 1.3592; USD/CHF rose 0.47% to 0.8053; and AUD/USD rose 0.14%.

[Renminbi] USD/offshore CNY quoted at 6.7225 yuan

At the New York close, the USD/offshore CNY rate rose 52 pips from the previous trading day's close to 6.7225 yuan. The onshore CNY/USD rate fell 30 pips from the previous night session's close to 6.7233 yuan.

[Virtual Assets] The cryptocurrency market strengthened, with Ethereum rising nearly 1.5%

The cryptocurrency market remained generally stable on Wednesday. Bitcoin rose 0.29% to close at $78,431.19, having spiked and then retreated during the session. Ethereum gained 1.42% to reach $2,471.350.

– Commodities

[Energy] Oil prices fluctuated sharply intraday, with WTI crude falling below $83.

International oil prices experienced sharp intraday fluctuations on Wednesday. US crude futures briefly dropped to $79.79 per barrel before rebounding to break above $83, ultimately closing down 0.16% at $82.23 per barrel. Brent crude futures fell 0.84% to $87.84 per barrel, marking their largest single-day decline in nearly three weeks.

[Precious Metals] A stronger US dollar weighed on gold prices, with spot gold falling more than 1.3%.

Precious Metals:Gold prices declined significantly under pressure from a strengthening US dollar and rising expectations of interest rate hikes. At the New York close, spot gold fell 1.38% to $4,592.86 per ounce, trending lower throughout the day. US gold futures closed down 0.9%, with a settlement price of $4,653.30 per ounce.

Metals Futures Market:At the New York close, spot silver fell 0.81% to $68.098 per ounce, while US copper futures dropped 1.72% to $6.6985 per pound.

[Disclaimer]

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