US stocks reversed the V-shaped trend, with only the Nasdaq rising, while long-term bond yields plunged 20 basis points after reaching a 16-year high, and oil prices fell 3% during the session.

This week, the US stock market entered the busiest earnings season, with about 40% of the S&P 500 companies releasing their third-quarter reports. This includes tech giants such as Alphabet, Microsoft, Meta, Amazon, IBM, Intel, as well as General Motors and Ford, which are currently being impacted by strikes.

Some analysts believe that corporate profits should be supported by resilient consumer demand. The US GDP for the third quarter, which is expected to grow by over 4%, may increase the expectation that the Federal Reserve will maintain interest rates at levels that restrict economic growth for a longer period of time.

Investors are betting that the probability of the Federal Reserve raising interest rates next week and before the end of the year is less than 30%, and the possibility of a 25 basis point rate cut around July next year has increased. The market is also focused on heavyweight data such as US PCE inflation and global PMI released this week.

The European Central Bank will announce its interest rate decision on Thursday. Economists expect it to remain unchanged at 4% and are concerned about the impact of rising global bond yields on the outlook for European monetary policy, as well as clues from the ECB on when and how to reduce the massive bond purchases made during the pandemic.

The market remains nervous about the possibility of the new round of Israeli-Palestinian conflict evolving into a broader regional conflict. Prominent investor Bill Ackman has closed his short position on long-term US bonds, citing high global risks leading to strong demand for bond safe-havens and a significant slowdown in US economic growth. "Bond King" Gross also stated that he is buying futures linked to the secured overnight financing rate SOFR, and expects the US to enter a recession before the end of the year.

Dow and S&P close at the lowest level in four and a half months, while Nasdaq falls for the fourth consecutive day, and European stocks fall for five consecutive days to the lowest level in nine and a half months

On Monday, October 23rd, the yield on 10-year US Treasury bonds briefly rose above the 5% mark, reaching the highest level since July 2007. This caused a collective decline in US stocks, with the Dow opening down more than 100 points and the decline expanding to 0.7%. The Nasdaq fell 1% at one point, and the S&P 500 index fell the deepest at 0.8%.

Subsequently, the yield on US Treasury bonds retreated from its high, and one hour after the market opened, US stocks turned higher. However, the Dow Jones index turned lower, and by noon, all indices, including the Russell small-cap stocks, turned higher. The technology stocks, especially the Nasdaq and Nasdaq 100, saw their gains expand to 1%.

At the end of the day, the gains in US stocks narrowed, and all indices except the Nasdaq turned lower again. The Dow Jones fell 200 points, approaching the day's low. In the end, the Dow Jones fell for the fourth consecutive day and fell below 33,000 points, while the S&P 500 index fell for the fifth consecutive day, reaching the lowest level since May 31st, and the Nasdaq fell for the fourth consecutive day, rising above 13,000 points and leaving the lowest level in four and a half months since June. The Russell small-cap stocks fell for the fourth consecutive day, hitting a one-year low:

The S&P 500 index closed down 7.12 points, or 0.17%, at 4,217.04. The Dow Jones fell 190.87 points, or 0.58%, to 32,936.41. The Nasdaq rose 34.52 points, or 0.27%, to 13,018.33. The Nasdaq 100 rose 0.3%, while the Russell 2000 small-cap index fell 0.9%. The "fear index" VIX fell more than 6% to 20.40, moving away from a seven-month high. The US stock market experienced a V-shaped reversal, with only the Nasdaq rising while the S&P and Dow Jones hit a four-and-a-half-month low, and small-cap stocks reached a new low for the year.

Some analysts believe that the S&P 500 index closed below the key technical level of the 200-day moving average for the first time in seven months last Friday, indicating that the stock market may continue to decline due to the slowdown in the US economy and other geopolitical risks. The Nasdaq has fallen more than 10% from its 52-week high, entering a technical correction zone.

Others argue that the US stock market is losing momentum due to multiple pressures such as rising interest rates, geopolitical tensions, "dysfunctional" federal government, and lackluster corporate earnings. The 10-year US Treasury yield reaching 5% not only puts pressure on stock market valuations but also indicates that investors have lost confidence in the Federal Reserve's imminent interest rate cuts, accelerating the already weak economic situation. The forward guidance of companies in the third-quarter earnings reports is lagging behind expectations. "The Big Short" and Morgan Stanley strategist Mike Wilson reiterated that the S&P 500 index will close around 3900 points by the end of the year, a drop of about 7% from last Friday.

Tech giants rose together but narrowed their gains in the closing session. Meta, the "metaverse" company, rose nearly 2%. Apple erased its initial 1.7% decline and rose slightly. Amazon turned up more than 1%, and Google A rose 0.7%, all moving away from their two-week lows. Microsoft rose 0.8%, approaching a one-month high, while Netflix rose 1.5% to a nearly six-week high. Tesla erased its initial 4.5% decline and rose slightly, still hovering at a four-and-a-half-month low.

Chip stocks turned down in the closing session. The Philadelphia Semiconductor Index fell 1.5% before turning up more than 1% and ultimately closing down 0.5%, falling below 3300 points to a nearly five-month low. Intel fell 3%, and AMD fell 1.8%, both hitting their lowest levels in nearly four weeks, but Nvidia rose 3.8% to break away from its four-week low, and ARM rose nearly 5%.

Most AI concept stocks turned up during the trading session. C3.ai turned up 1%, Palantir Technologies fell 5.6% before turning up 0.6%, both moving away from their two-week lows. SoundHound.ai fell 4% to a nearly four-week low, while BigBear.ai turned up 1.5% to break away from its three-and-a-half-week low.

In terms of news, Microsoft plans to invest nearly $3.2 billion in Australia over the next two years to expand its cloud computing and AI infrastructure. Tesla is expected to exceed its previous guidance of $9 billion in capital expenditures this year, and the US Department of Justice has requested that it provide documents and information related to driver-assistance systems such as Autopilot. Apple is reportedly investing $1 billion annually in the development of generative AI, integrating it into Siri, Messages, and Apple Music. According to the Global Times, relevant departments are conducting tax inspections and land use investigations on companies under the main Apple contract manufacturer, Foxconn, in accordance with the law. Nvidia and ARM are jointly developing PC chips for Windows systems.

Chinese concept stocks significantly outperformed the US stock market. The ETF KWEB rose by about 1%, CQQQ fell 1.7% before closing down 0.2%, and the Nasdaq Golden Dragon China Index (HXC) fell 1.5% before turning up nearly 1%, breaking through 6100 points, ending a four-day decline and breaking away from the lowest level in four and a half months.

Among the Nasdaq 100 constituents, JD.com rose 1.7%, Baidu rose nearly 1%, and Pinduoduo rose 1.4%. In other stocks, Alibaba turned up 0.7%, Tencent ADR and Bilibili rose by about 1%, NIO fell 3.6% before turning up 0.1%, Xiaopeng Motors rose 3.7%, and Li Auto rose nearly 2%.

Bank stocks collectively declined for four consecutive days. The industry benchmark, the Philadelphia Stock Exchange KBW Bank Index (BKX), fell 1%, falling for four consecutive days to the lowest level in over five months. On May 4th, it hit the lowest level since October 2020. The KBW Nasdaq Regional Bank Index (KRX) rose 1.6% before falling 0.3% to a four and a half month low. On May 11th, it hit the lowest level since November 2020. The SPDR S&P Regional Banking ETF (KRE) also rose more than 1% before falling 0.4%. On May 4th, it hit the lowest level since October 2020.

Other stocks with significant changes include:

The second-largest oil and gas giant in the United States, Chevron, will acquire US energy company Hess in an all-stock transaction of $171 per share, with a premium of about 5% over the closing price of the latter on Friday. This is the second-largest merger and acquisition case in the industry this year, following ExxonMobil's $60 billion bid to acquire Pioneer Natural Resources earlier this month, and it will directly compete with emerging Latin American producer Guyana in drilling operations. Chevron fell 3.7% and dragged down the Dow Jones Industrial Average, while Hess rose more than 2% before falling 1%, and ExxonMobil fell 1.5%.

Cybersecurity company Okta fell more than 10% to a three-month low, having fallen more than 11% last Friday. At that time, it was reported that unidentified hackers had accessed the company's support system and viewed customer files, but it did not affect product supply. Some large companies such as FedEx and Zoom use Okta to simplify login and identity management systems. Citigroup and Evercore ISI warned that Okta's business may suffer a short-term blow.

Investors continue to focus on economic and geopolitical uncertainties and look forward to this week's earnings reports and the latest monetary decisions from the European Central Bank. European stocks fluctuated on Monday:

The pan-European Stoxx 600 index fell 0.13%, falling for five consecutive days and hitting the lowest level in nine and a half months since January 2nd. European real estate stocks hit an eleven-year low during the session, mining stocks fell 1%, and retail and tourism stocks rose more than 1%. Only the UK stock market fell among national stock indexes. Volkswagen's stock fell more than 3% to a three-and-a-half-year low since April 2020, after lowering its full-year profit margin expectations and issuing a pessimistic guidance last Friday. Philips, the Dutch health group, initially fell more than 5% but ended up rising more than 2%. Its core profit and comparable sales in the third quarter exceeded expectations, and it raised its full-year guidance. However, new orders for the quarter declined by 9%.

In addition, the MSCI global index fell to a seven-month low since March this year. Some analysts believe that higher bond yields in Europe and the United States and broader risks of Middle East conflicts have weakened investor sentiment ahead of major corporate earnings and key inflation data releases.

US Long Bond Yields Plummet 20 Basis Points After Hitting a 16-Year High, Two-Year Yields Reach a One-Week Low

US bond yields collectively rose and then fell back, with long bond yields experiencing a more significant decline and failing to reach a 16-year high. The two-year US Treasury yield, which is more sensitive to monetary policy, fell 7.5 basis points from a daily high of 5.135% to 5.06%, hitting a one-week low.

The 10-year benchmark bond yield briefly rose to 5.025%, hitting a 16-year high, but then fell nearly 20 basis points from the daily high and dropped below 4.83%, erasing last Wednesday's gains. The 30-year long bond yield fell 21 basis points from a daily high of 5.179% and briefly fell below 5%.

US long bond yields plummet 20 basis points after hitting a 16-year high

European bond yields followed the decline in US bond yields. The 10-year German bond yield, the benchmark for the eurozone, fell more than 1 basis point to 2.87% at the close, after rising 8 basis points to 2.96% earlier, still below the twelve-year high of 3.006% set in early October.

UK bond yields fell more than 5 basis points across the board. Investors speculated that the Bank of Japan would announce further adjustments to its yield curve control policy next week, causing Japanese bond yields to rise. Last Friday, as investors turned to safe-haven assets and sold stocks, bond yields in Europe and the United States both declined.

10-year Japanese bond yields hit the highest level since July 2013 during the session

Oil prices fell by about 3% during the session to a one-week low, with Brent crude falling below the $92 to $90 range

Diplomatic mediation to prevent an escalation of the new round of Israeli-Palestinian conflict has calmed the rise in oil prices. WTI December futures closed down $2.59, or 2.94%, at $85.49 per barrel. Brent December futures closed down $2.33, or 2.53%, at $89.83 per barrel. WTI crude oil fell the most by $2.70 or 3.1%, hitting a daily low of $85, wiping out nearly half of the gains since October 13. Brent crude oil fell the most by $2.53 or 2.7%, breaking through the three-digit integer levels of $92 to $90 consecutively, reaching a one-week low.

Oil prices fell back to the high levels when the Israeli-Palestinian conflict broke out.

Analysts also believe that concerns about escalating risks in the Middle East conflict will increase economic resistance. The rise in oil prices caused by supply disruptions will push up global inflation, prompting central banks in Europe and the United States to return to monetary tightening policies, weakening global oil demand growth.

The TTF Dutch natural gas futures, the European benchmark, rose the most by 1.5%, stabilizing above the 50 euro/megawatt-hour level, not far from the one-week high. ICE UK natural gas rose the most by 1.8%. It is reported that the EU is considering extending the natural gas price cap due to concerns about winter supply.

The US dollar fell below 106, offshore RMB approaching 7.31, Bitcoin rose above 30,000 and 31,000 US dollars

The DXY, a basket of currencies measuring against six major currencies, followed the rise and fall of US bond yields. It fell the most by 0.6% during the day and fell below the 106 level to a four-week low. In early October, it reached a 11-month high of 107.34.

Since mid-July, the surge in US bond yields has increased the attractiveness of the US dollar relative to other currencies, causing the US dollar index to rise by more than 6%. However, Barclays and Morgan Stanley have both recommended reducing long positions in the US dollar, as the factors driving the US dollar's strength are increasingly being digested by the market, and there may be limited further upside for the US dollar.

The US dollar index is approaching to wipe out half of the gains since the US CPI inflation data.

The euro rose 0.7% against the US dollar, breaking through the 1.06 level to 1.0670, reaching a four-week high. The pound also rose 0.7%, breaking through the 1.22 level to 1.2250, recovering nearly half of the decline since October 12. The yen against the US dollar fell to the 150 level and then narrowed its decline, hovering at a three-week low. Offshore RMB rose successively above 7.33 and 7.32, approaching 7.31 to reach a one-week high, with a maximum increase of 140 points compared to the previous day's closing.

The Canadian dollar rose ahead of the Bank of Canada's decision on Wednesday, with economists suggesting that the country may have completed its interest rate hike. The Israeli shekel hit its longest losing streak since 1984. The black market exchange rate of the Argentine peso rose more than 14% to 1050, and the candidate Milei, who advocates for economic "dollarization," received fewer votes than his main opponent, current Minister of Economy Sergio Massa. The decisive round of the Argentine general election will be held in November. Mainstream cryptocurrencies rise across the board. Bitcoin, the largest cryptocurrency by market capitalization, rose more than 4% and consecutively broke through the key levels of $30,000 and $31,000, reaching a three-month high. Ethereum, the second-largest cryptocurrency, rose more than 3% and broke through $1,690, reaching the highest level this month. The optimistic sentiment of the possible approval of the first Bitcoin ETF and the demand for safe-haven assets have driven Bitcoin's gains to the best level since June.

Gold retreats from five-month high, silver futures fall over 1%, while copper rebounds after hitting an 11-month low during intraday trading

COMEX December gold futures fell 0.33% to $1,987.80 per ounce. Silver futures fell over 1.2%. Spot gold fell the deepest, down $17 or 0.9%, breaking through the integer levels of $1,980 and $1,970 consecutively during the day, retreating from the five-month high set last Friday.

Analysts say that if US inflation data this week exceeds expectations, it may cause a short-term decline in gold prices, as rising US bond yields will weigh on gold prices. However, geopolitical tensions and uncertainties in the Middle East will drive gold prices higher. Gold prices have surged by about 9% in the past two weeks.

Uncertain demand outlook leads to most London industrial metals closing lower:

Dr. Copper, the "economic barometer," hit an 11-month low since the end of November last year at $7,856 during intraday trading, but eventually closed slightly higher and returned above $7,900. LME copper inventories reached a two-year high last week, and Shanghai Futures Exchange inventories have risen for two consecutive weeks, both putting pressure on prices.

London aluminum closed slightly lower, reaching the lowest level in nearly two months since the end of August. London zinc fell 0.7%, London lead closed slightly higher, and London tin fell nearly $100, all approaching the lows of the week. London nickel fell more than $400 or over 2%, reaching a two-year low since September 2021.