The U.S. stock market experienced slight declines as major indices faced volatility. In contrast, Chinese assets strengthened, with the Nasdaq Golden Dragon China Index surging over 3% during the session. However, NXP Semiconductors (NXPI, Financial) saw its stock fall after reporting lower-than-expected quarterly earnings projections.
Market expectations are high for a Federal Reserve interest rate cut. The CME FedWatch Tool indicates a 96% probability of a 25-basis-point cut, with forecasts suggesting a total of 150 basis points cut from the fourth quarter of this year to the fourth quarter of next year.
Chinese stocks outperformed, with the Nasdaq China Golden Dragon Index closing up 1.1%. Notable gains included Yum China up over 7% and Canadian Solar rising more than 5%. The off-shore yuan faced fluctuations, trading at 7.1105 against the dollar.
Technology stocks in the US experienced mixed results. Notably, Tesla dropped over 2%, and major companies like Alphabet, Meta, and Amazon fell over 1%. Microsoft and Apple also posted declines, while Nvidia saw a slight increase of 0.48%.
NXP Semiconductors (NXPI, Financial), one of the world's top semiconductor companies, reported a marginal drop in third-quarter revenue to $3.25 billion, slightly missing the forecast of $3.26 billion. The company's shares fell over 5% post-market due to underwhelming fourth-quarter guidance.
Commodities showed divergent trends, with gold and silver prices fluctuating. However, oil saw a substantial increase, as NYMEX crude futures rose over 3% past $71 per barrel, while Brent crude climbed near 3%, exceeding $75 per barrel. The rise in oil prices bolstered energy stocks like ExxonMobil, Occidental Petroleum, and Chevron.
Contributors to the oil price surge include geopolitical tensions and the extension of OPEC+ production cuts. Despite these developments, concerns about long-term supply pressure persist, limiting the market's optimism.
Gold's short-term high volatility is attributed to heightened expectations of Fed rate cuts amid weak U.S. employment data. Additionally, geopolitical tensions contribute to increased demand for safe-haven assets.
