Chip stocks dragged down, the S&P Nasdaq turned lower in late trading, and the two-year U.S. Treasury yield broke through the seventeen-year high

Consumer demand continued to be strong, and US retail sales rose 0.7% month-on-month in September, far exceeding expectations and higher than the previous reading, which pushed the US dollar index higher, and US stocks and US bonds lower. Some analysts believe that the hot retail sales data will make the Fed "frustrated", but also make GDP firm in the third quarter.

Markets await Fed Chairman Jerome Powell's speech on Thursday, which will be one of his last speeches before the quiet period, or provide key information on where monetary policy is headed. The market is sure that there will be no rate hike in November, but the probability of a rate hike in December has risen to 43% from 34% yesterday.

Expectations for Fed rate hikes at the end of this year and early next have risen

Other economic data is mixed. U.S. industrial and manufacturing output in September and total inventory growth in August both increased more than expected month-on-month, and capacity utilization, which measures potential output levels, was flat and exceeded expectations. But October saw NAHB homebuilder confidence at its lowest level in nine months.

Next year's FOMC voting committee, Richmond Fed President Barkin, supports "patience" and prefers to leave interest rates unchanged for the time being, with the Fed having enough time to see if further rate hikes are needed, and acknowledging that inflation has progressed but has not yet reached the target.

The S&P and NASDAQ turned lower in late trading, with the Dow barely rising for three consecutive days, chip stocks leading the technology sector and the China Composite Index at a two-week low

On Tuesday, October 17, under the cloud of uncertainty in the Middle East and expectations that the Federal Reserve will maintain higher interest rates for longer, U.S. stocks collectively opened lower, with both the Dow and the NASDAQ opening down more than 100 points, and the NASDAQ extended its decline to 1.5% or 200 points within 20 minutes.

But U.S. stocks had turned higher across the board at midday, with Russell's small-cap stock holding up more than 1% throughout the day and leading major stock indexes. However, the Nasdaq was the worst performer among the major indexes, with the Dow rising as high as more than 160 points and briefly rising above 34,000 points. U.S. stock gains narrowed significantly at the end of the day.

In the end, the Dow barely rose for three consecutive days to a new three-week high since September 21, the S&P fell slightly but hovered a one-week high, the NASDAQ also closed lower and retraced its one-week low, and Russell's small-cap stocks rose for two days and recovered most of the losses since last Wednesday, coming off a five-month low:

The S&P 500 closed down 0.43 points, or 0.01 percent, at 4,373.20. The Dow closed up 13.11 points, or 0.04%, at 33,997.65. The Nasdaq closed down 34.24 points, or 0.25%, at 13,533.75. The NASDAQ 100 fell 0.3%, the Russell 2000 small-cap index rose 1.1%, and the "fear index" VIX rose nearly 4% to remain below 18.

U.S. stocks turned higher en masse during the session, with the S&P briefly testing the 50-day moving average, and the S&P and NASDAQ narrowed their losses at the end of the session

The S&P technology sector fell 0.8%, while the telecommunications, energy and materials sectors rose as much as 0.9%. Moderna, a component of the Nasdaq 100 index, fell 6 percent, Lucid Group fell 5.4 percent, Nvidia fell 4.5 percent, the third-biggest decliner, and Goldman Sachs' favored cheap daily miscellaneous dollar tree rose 4.8 percent.

Some analysts said that the trend of the bond market dominating the stock market in the past two months has reappeared, and the higher-than-expected retail sales data have brought U.S. Treasury yields back to "levels that create problems for the stock market."

But based on healthy consumer activity, cooling inflation and solid economic growth, UBS is confident that the profit recession for U.S. companies in the third quarter will end, which may boost the stock market's optimistic rally.

It has also been pointed out that historical experience shows that geopolitical conflicts only have a lasting impact on markets when they exacerbate inflation concerns by hitting supply, or when they hit demand and cause GDP to be revised downward. Now is the time to pay special attention to Yo Ou, where stocks have generally sold off over the past two years whenever the price of crude oil has been above $85 and continues to rise.

Star tech stocks narrowed their losses significantly after midday. Metaverse" Meta turned up nearly 1%, basically recovering the decline since last Thursday; Apple closed down 0.9% after falling more than 2%, to a new low in more than a week; Amazon closed down 0.8% after falling nearly 3%, off a four-week high; Microsoft closed down 0.2% after falling 1.6%, hovering at a one-month high; Netflix fell 1.4% to a five-month low, Google A fell more than 1% before turning 0.5% to a one-week high, and Tesla fell 2.7% before turning 0.4%, continuing to break from a one-week low.

Chip stocks also narrowed losses after news that the United States was considering tightening sales of advanced AI chips. The Philadelphia Semiconductor Index closed down 0.8% after falling more than 3%. Intel closed down 1.4% after falling 4%, and AMD fell 4.5% to close down 1.2%, both pushing down to one-week lows. Nvidia fell 7.8 percent at the start of the session, its biggest drop since December, and closed down 4.7 percent to a two-week low. Semiconductor equipment maker Applied Materials turned more than 1% higher after falling 3%, Ram Research closed down 0.1% after falling 3.7%, and KLA closed down 1% after falling 3.7%.

Nvidia fell 7.8% at the beginning of the session, its biggest drop since December

AI concept stocks rebounded en masse. C3.ai rose more than 6 percent, recovering most of the losses since Wednesday, with Palantir Technologies up 2.8 percent off a one-week low, SoundHound.ai up 0.5 percent and BigBear .ai up 7 percent, both further off their three-week lows.

The decline in the China Composite Index narrowed. ETF KWEB fell 1.4%, CQQQ fell 1%, and the Nasdaq Golden Dragon China Index (HXC) closed down 0.9% after falling 1.4%, falling to a two-week low on the third day in four days, regaining 6500 points.

Among the Nasdaq 100 constituents, JD.com fell 3.6%, Baidu fell more than 4%, and Pinduoduo fell 0.5%. Among other individual stocks, Alibaba fell 0.5%, Tencent ADR and B Station fell more than 1%, NIO fell 2.7% and turned up 0.1%, Xpeng Motors rose 0.2%, Li Auto rose 1.5% and then turned down 0.4%, Li Zhou's sales exceeded 10,000 for the first time, and it challenged 40,000 monthly sales in October.

Bank stock indexes rose for two consecutive days. The industry benchmark Philadelphia Stock Exchange KBW Bank Index (BKX) rose 1.7 percent to a three-week high, having hit its lowest since October 2020 on May 4. The KBW Nasdaq Regional Banking Index (KRX) rose more than 2% for two consecutive days to a one-month high, hitting its lowest level since November 2020 on May 11; The SPDR S&P Regional Bank ETF (KRE) also rose more than 2% again, hitting its lowest since October 2020 on May 4.

Bank of America, the second-largest U.S. bank by assets, rose 2.3 percent to a more than three-week high as third-quarter revenue and earnings grew more than expected, reiterating its full-year net interest income guidance but warning that U.S. consumer spending is cooling. Goldman Sachs fell 1.6 percent to a two-week low, after third-quarter revenue and earnings both fell year-on-year but better than expected, bond trading revenue was positive and its CEO confirmed weakness in the consumer business. Bank of New York Mellon turned nearly 4 percent higher after falling more than 5 percent to its highest in four weeks, with third-quarter revenue and EPS earnings beating expectations. Morgan Stanley reported Wednesday's earnings.

Other stocks with large movements include:

United's third-quarter report was slightly better than analysts' expectations and its outlook for the fourth quarter was less optimistic than market expectations, with shares down 3 percent after hours and rivals American Airlines and Delta Air Lines also falling more than 1 percent after-hours.

Johnson & Johnson, a multinational pharmaceutical and medical device maker, fell nearly 1 percent to a two-week low after rising more than 2 percent premarket after beating expectations for last quarter's earnings and revenue, and raising its full-year guidance as sales in the pharmaceutical and medical device businesses surged.

Luxury electric vehicle maker Lucid fell as much as 7 percent, closing at an all-time low, with lower-than-expected production and deliveries in the third quarter, triggering demand concerns. The company did not provide an update on full-year production guidance, which it had expected to produce more than 10,000 vehicles this year.

Defense stock Lockheed Martin briefly turned more than 1% down more than 1% after rising nearly 3% before finally closing up 0.2% to a six-week high, with better-than-expected third-quarter revenue and earnings, but keeping the full-year outlook unchanged disappointed Wall Street, and overall earnings fell year-on-year and margins narrowed.

European stocks are mixed. The pan-European Stoxx 600 index closed down 0.10%, narrowing its losses significantly in late trading, but the Eurozone Stoxx 50 index edged higher. Retail stocks led the market, with mining stocks falling more than 2% at one point. Major national stock indexes fell only in Italy, and some analysts said that US retail sales data rekindled concerns that European and American central banks "maintain higher interest rates for longer". Ericsson fell as much as 8% due to uncertainty in its results.

U.S. Treasury yields rose more than 10 across the board

basis, the two-year yield is the highest in 17 years, and the yield on long-term bonds is approaching a 16-year high

After the US retail sales data exceeded expectations, European and US yields rose again by double digits across the board. The more sensitive two-year U.S. Treasury yield rose as much as 14 basis points to 5.24%, the highest in 17 years since 2006.

The yield on the 10-year U.S. base note rose as much as 15 basis points to 4.86%, and the yield on the 30-year long-term note rose as much as 12 basis points to 4.99%, both the highest since October 6 and close to the high since 2007. The yield on the five-year Treasury note rose nearly 18 basis points.

However, JPMorgan's survey of U.S. Treasury clients showed net longs hitting a three-week high, with the share of U.S. Treasury clients short falling 2 percentage points to neutral, and the proportion of bulls flat. Net longs for all clients were the highest since September 25.

U.S. Treasury yields rose more than 10 basis points across the board, near a more than decade high

The yield on the 10-year German bond, the benchmark for the eurozone, rose about 10 basis points to 2.89%, recovering all losses since Oct. 6, with the two-year yield up 9 basis points. The yield on the 10-year Italian bond benchmark of the more indebted periphery rose more than 12 basis points, while the yield on the French and Spanish base bonds also rose more than 9 basis points. British bond yields rushed back down, while short-end UK yields turned down 2 basis points.

Some analysts said that as investors withdraw safe-haven assets, the focus shifts to growth, inflation and central bank policy, and weak demand for government bond sales also puts pressure on European and American bond market prices. The ECB will announce its interest rate decision next week.

Oil prices beat restlessly, turning higher in late trading, and Brent oil hovered at 90

The dollar pushed up to a two-week high, and European gas stabilized

Oil prices rose at the beginning of the U.S. stock market, turned down and rose at midday, and oil hovered at $90 psychological integer. WTI November futures closed flat at $86.66 a barrel. Brent December futures closed up $0.25, or 0.28 percent, at $89.90 a barrel.

U.S. oil WTI trading December futures fell as much as 1% in the day, hovering at $85 at midday, after rising as much as 1% or $0.80 and rising above $86, still giving up nearly half of the gains since Friday. Oil fell as much as 0.8% and lost $89, and U.S. stocks rose 0.9% and broke above $90 at the beginning of the session, and then rebounded to a two-week high after turning higher in late trading.

Oil prices jumped restlessly and turned higher in late trading, and crude oil hovered at the $90 mark

The CEO of Saudi Aramco said it could boost oil production in a matter of weeks if needed, which could put downward pressure on oil prices. Some analysts say that energy traders are waiting to see whether the conflict in the Middle East will expand, which will lead to fluctuations in oil prices. The latest U.S. economic data showed healthy consumer spending and a temporary pickup in industrial output, giving a slight boost to the outlook for crude oil demand.

European benchmark TTF Dutch natural gas edged up 0.2 percent in late trading to remain below the 50 euro/MWh integer, having fallen more than 12 percent yesterday and off an eight-month high. ICE British Gas, which fell more than 11% yesterday, also turned 0.5%.

The dollar fluctuated slightly, and the yen rose above 149

After a rapid turn, the offshore yuan fell as deep as 210

Click down to 7.33

Yuan

DXY, a basket of dollar indexes against six major currencies, briefly turned higher after midday before turning lower again at 106.20 in late trading, erasing nearly half of Thursday's gains and coming off a one-week high, hitting an 11-month high of 107.34 two weeks ago. Some analysts said that the driving force of the money market is still the tension in the Middle East and the rise in global bond yields, and "the key issue is the degree of further escalation of the conflict."

The dollar turned slightly volatile and turned lower, erasing nearly half of its gains since Thursday

The euro briefly pushed up 1.06 against the dollar, erasing nearly half of its losses since Thursday, mainly due to a better-than-expected improvement in investor morale among German investors in October at ZEW. The pound fell below 1.22 against the dollar, returning to a one-week intraday low as UK wage growth cooled from record highs, giving analysts confidence that the Bank of England had finished raising interest rates. New Zealand consumer inflation hit a two-year low, supporting the idea of no interest rate hike in November, and the New Zealand dollar retreated.

The yen briefly rose above the 149 mark against the dollar, then erased all gains and fell to a daily low in U.S. stocks to a two-week low of 149.90. The yen's short-term rally was due to reports that the Bank of Japan was discussing raising its inflation forecast for fiscal 2023 and 2024, and the yen's pullback was due to the likely maintenance of the inflation outlook for fiscal 2025 around the current forecast of 1.6%.

The offshore yuan fell as low as 7.33 yuan against the US dollar in pre-market trading, down 210 points from the previous close, and the US stock market briefly rose above the 7.32 yuan mark at the beginning of the session, and then extended the decline back to about 200 points, hovering at a two-week intraday low since October 4.

The Israeli shekel continues to fall below the 4-mark against the dollar, updating its eight-and-a-half-year low since the beginning of 2015 for several consecutive days. Ratings agency Fitch placed Israel's A+ rating on negative watch, saying there was a risk of the conflict expanding. Citi believes that if the depreciation of the Israeli shekel eases, the Bank of Israel may start a policy easing cycle.

Most mainstream cryptocurrencies fell. Bitcoin, the largest leader in market capitalization, rose slightly, trading at $28,400, still not far from the highest in nearly two months, and jumped 10% yesterday and rose above the psychological integer of $30,000. Ethereum, the second-largest body, fell 1% to $1,570.

Bitcoin traded at $28,400, still not far from its highest in nearly two months

Spot gold briefly turned lower and fell below 1920

The U.S. dollar, temporarily off a three-week high, weighed on London metals with demand concerns

Yesterday's profit-taking precious metals turned higher, with COMEX gold futures for December closing up 0.07% at $1935.70 an ounce, with silver futures up more than 1% and regaining the $23 mark.

Spot gold once rose $11 or 0.6% to $1930 integer, U.S. stocks intraday with the dollar turned higher and U.S. bond yields jumped, spot gold once slightly turned down and lost $1920, slightly off the three-week high, U.S. stocks turned higher at the end of the day.

Some analysts said that in the face of soaring interest rates and European and American bond yields and the dollar bull market, gold prices have remained largely unchanged and firm since mid-2020, which is impressive, and last week recorded the fourth largest weekly gain in a decade due to safe-haven demand. Barring some form of ceasefire or easing in the Middle East conflict, gold will hold above the $1,900 support level, up more than 4% so far in October.

Spot gold turned higher in late trading to regain $1,920, but was temporarily away from a three-week high

Global demand concerns weighed down prices for London's industrial base metals. Dr. Copper's economic bellwether closed slightly lower, still below the $8,000 psychological mark, near the lowest level of the year, and concerns about the escalating crisis in the Middle East and global growth have sent copper prices down 10% since early August.

Lun aluminum, which fell nearly 1% yesterday, fell slightly, and Lun zinc fell 1%, both maintaining a one-and-a-half-month low. Lunlead, which rose 1.5% yesterday, rose slightly again, further off its four-month low. London nickel fell slightly, hovering at a two-year low, but London hit another three-week high.

Some analysts said that the demand for copper outside China is quite bad, especially the weak metal consumption in Europe and the United States, and the supply of copper has been quite strong, which is not good for prices. Lunzinc stocks fell to a three-month low, but Lunzinc stocks rose to their highest level since May 2021.