Concerns over AI profit margins trigger a sell-off in tech stocks, S&P ends seven consecutive gains, gold futures break through $4,000, Bitcoin declines

Oracle's cloud profit margins were reported to be disappointing, triggering a sell-off in large technology and consumer stocks, which dragged down the overall U.S. stock market. Additionally, rising inflation expectations and the ongoing U.S. government shutdown provided a macro backdrop for the market correction. After reaching a historic high, the S&P and Nasdaq fell in early trading, ending the S&P's seven-day winning streak.

Here are the movements of core assets:

• In early U.S. trading, the three major U.S. stock indices opened slightly higher, with most technology stocks rising. IBM rose about 2%, and Dell Technologies surged about 5% after significantly raising its earnings forecast. AMD continued its strong momentum from the previous trading day, rising about 6%. Mining company Trilogy Metals soared over 200% after receiving investment from the U.S. government.

• The precious metals market performed impressively, with COMEX December gold futures historically breaking through the $4,000 per ounce barrier for the first time. In the foreign exchange market, the euro fell 0.4% against the dollar due to news that the EU proposed to limit tax-free steel imports and may double tariffs on over-quota steel.

• During U.S. trading, market sentiment reversed during the session. Oracle reported losses in its Nvidia server leasing business, causing its stock price to plummet over 7%, dragging down the overall market. Meanwhile, data from the New York Fed showed that U.S. short-term inflation expectations hit a five-month high, adding pressure to the market.

• At midday in U.S. trading, selling pressure intensified. The Philadelphia Semiconductor Index led the decline, falling over 2%, with most stocks in the sector declining. The major U.S. stock indices widened their losses, with the Nasdaq briefly dropping over 0.9%. Cryptocurrencies fell broadly, with Bitcoin dipping below $121,000, retreating over $5,000 from the intraday high of over $126,000 set on Monday.

• Previously strong precious metals also plummeted from their highs. Spot gold and COMEX gold futures significantly retreated from historical peaks, with COMEX gold futures falling below the $4,000 mark, and COMEX silver futures seeing an intraday decline of up to 2.0%. Meanwhile, the U.S. dollar index strengthened, with the dollar rising against the yen by 1%, approaching the 152 mark.

• In the bond market, the U.S. Treasury's three-year bond auction attracted strong demand, leading to a decline in U.S. Treasury yields.

• At the close of U.S. trading, Tesla officially launched the standard Model Y priced below $40,000, but its stock price was not boosted, with the decline expanding to 4% by the end of trading. Ultimately, all three major U.S. stock indices closed lower, with the Nasdaq down 0.67%. The semiconductor index and the Russell 2000 small-cap index had the largest declines.

(Daily movements of U.S. benchmark stock indices)

On Wednesday, all three major U.S. stock indices closed lower, ending the S&P's seven-day winning streak. The U.S. small-cap index fell over 1.1%, and the semiconductor index dropped over 2%. The China concept index fell over 2.2%, with Pony AI down over 7.7%.

• The S&P 500 index closed down 25.69 points, a decline of 0.38%, at 6714.59 points

• The Dow Jones Industrial Average closed down 91.99 points, a decrease of 0.20%, at 46,602.98 points.

• The Nasdaq closed down 153.304 points, a decrease of 0.67%, at 22,788.363 points. The Nasdaq 100 index closed down 138.332 points, a decrease of 0.55%, at 24,840.227 points.

• The Russell 2000 index closed down 1.12%, at 2,458.423 points.

• The VIX index closed up 5.38%, at 17.25.

U.S. Sector ETFs:

• The semiconductor ETF fell 2.24%, consumer discretionary dropped 1.72%, and the AI robotics sector fell 1.58%. Consumer staples rose 0.92%, and utilities increased 0.45%.

(October 7th, U.S. sector ETFs)

Tech Giants:

• The Magnificent 7 index of U.S. tech stocks fell 0.77%, at 200.49 points.

• Tesla closed down 4.45%, Alphabet A down 1.86%, Microsoft, Meta, Nvidia, and Apple fell up to 0.87%, while Amazon closed up 0.39%.

Chip Stocks:

• The Philadelphia Semiconductor Index closed down 2.06%, at 6,634.762 points.

• TSMC ADR closed down 2.77%, AMD rose 3.83%.

Chinese Concept Stocks:

• The Nasdaq Golden Dragon China Index closed down 2.24%, at 8,640.94 points.

• Among popular Chinese concept stocks, Pony AI closed down 7.73%, Century Internet down 6.41%, and Yatsen Holding, GDS Holdings, and Luokung Technology fell up to 5.71%.

Other Individual Stocks:

• Eli Lilly fell 0.17%, while Berkshire Hathaway Class B shares owned by Warren Buffett closed up 0.46%.

Eurozone blue-chip stocks fell nearly 0.3%, but LVMH rebounded over 3.6%, as investors focused on the situation in France. The Danish stock index fell 1.2%, the Dutch index dropped over 0.6%, and the Italian banking sector fell about 0.6%.

Pan-European Stocks:

• The European STOXX 600 index closed down 0.17%, at 569.27 points.

• The Eurozone STOXX 50 index closed down 0.27%, at 5,613.62 points.

National Indices:

• The German DAX 30 index closed up 0.03%, at 24,385.78 points.

• The French CAC 40 index closed up 0.04%, at 7,974.85 points.

• The UK FTSE 100 Index closed up 0.05%, at 9,483.58 points.

  (Performance of major European and American stock indices on October 7)

Other individual stocks:

• Among the blue-chip stocks in the Eurozone, ING Groep N.V. fell 3.20%, ASML Holding, BMW, and Bayer dropped 2.51%-2.01%, entering the top four declines.

• Among all constituents of the European STOXX 600 Index, B&M European Value Retail fell 7.81%, Entain dropped 6.54%, Frontline fell 4.90%, making it the third largest decline, while defense stocks Kongsberg Gruppen fell 4.27% and RENK Group dropped 3.35%.

Strong auction of three-year U.S. Treasuries, with U.S. Treasury yields generally declining.

U.S. Treasuries:

• At the New York close, the yield on the 10-year U.S. Treasury bond fell by 2.71 basis points, to 4.1249%.

• The yield on the two-year U.S. Treasury bond fell by 2.06 basis points, to 3.5677%, with an intraday trading range of 3.6028%-3.5615%.

  (U.S. Treasury yields for major maturities rose and then fell)