1. U.S. Inflation Higher Than Expected in January
The latest data from the U.S. Department of Labor shows that the Consumer Price Index (CPI) rose to 3% in January, exceeding market expectations. This marks the largest increase since June of last year. The core CPI, which excludes food and energy costs, increased by 3.3% year-over-year, with rising housing prices being the main contributor to inflation.
2. Will the Fed Still Cut Interest Rates This Year?
The stronger-than-expected inflation data has led to concerns that the Federal Reserve may delay or even reconsider cutting interest rates in 2024. In response to the report, U.S. stock markets experienced volatility, with the Dow Jones falling 0.5%, the Nasdaq rising slightly by 0.03%, and the S&P 500 declining by 0.27%.
3. Chinese and Hong Kong Stocks Surge Despite Market Weakness
Despite a weaker U.S. stock market, Chinese companies listed in the U.S. saw significant gains, rising 2.84% overnight. Since January 14, these stocks have surged by 23.74% over 21 trading days, adding nearly a quarter to their market value. Meanwhile, Hong Kong’s Hang Seng Index also climbed by 1.5% at midday, with the Hang Seng Tech Index gaining almost 27% since mid-January.
4. A-Shares Tech Stocks Show Weakness
Unlike the strength seen in U.S.-listed Chinese stocks and Hong Kong stocks, China’s A-shares market showed a more subdued performance. The Shanghai Composite Index remained largely flat, dipping 0.12% by midday, while the Shenzhen Component Index, ChiNext Index, and STAR Market Composite Index fell by 0.47%, 0.3%, and 1.49%, respectively. Across the market, more stocks declined than advanced, with 1,486 stocks gaining and 3,748 stocks falling.
Some speculative tech stocks that previously surged due to market hype have started to pull back. Certain companies saw significant stock price increases without strong fundamentals, leading to profit-taking by major shareholders. For example, QingCloud Technology (青云科技)’s stock rose nearly 200% in just six trading days before experiencing a sell-off today. This has triggered concerns among investors, affecting broader technology stocks in the A-share market.
However, while short-term corrections are normal, the long-term outlook for major tech companies remains strong. Investors should be cautious about chasing speculative stocks but may find opportunities in well-established technology leaders that have pulled back to key support levels. The broader technology market remains in an uptrend, though fluctuations are expected along the way.