U.S. stocks closed higher on Wednesday, with the technology sector leading the gains. Both the S&P 500 and Nasdaq reached new closing highs not seen since April 2022.  

The U.S. June Consumer Price Index (CPI) showed a steady decline in inflation, reinforcing market expectations that the Federal Reserve’s interest rate hike cycle is nearing its end. 

According to the U.S. Department of Labor report, the U.S. June CPI increased by 0.2% on a month-over-month basis and 3% on a year-over-year basis.  

Economists had previously expected a 0.3% increase on a monthly basis and a 3.1% increase on a yearly basis. Excluding the volatile prices of food and energy, the core CPI rose by 0.2% on a monthly basis and 4.8% on a yearly basis. Both figures were lower than expected. 

U.S. Stocks 

Fundamental Analysis: 

Bank stocks generally rose, with Citigroup and Goldman Sachs both up over 1.7%. Regional bank stocks also saw gains. 

Fed funds futures trading indicates that a 25-basis-point interest rate hike by the Federal Reserve this month is almost certain, but the peak expectation for the federal funds rate in this cycle has been lowered to slightly below 5.4%.  

This means that market traders now believe the probability of another rate hike by the Federal Reserve after the expected one this month is much lower than 50%. The lower-than-expected June CPI data has led the market to believe that the Federal Reserve’s rate hike cycle is nearing its end. 

Technical Analysis:    

(S&P 500 Index, 1-day chart) 

Market Trends: 

• The Dow Jones Industrial Average (DJIA) rose 86.01 points, or 0.25%, to 34,347.43. 
• The Nasdaq Composite Index rose 158.26 points, or 1.15%, to 13,918.96. 
• The S&P 500 Index rose 32.90 points, or 0.74%, to 4,472.16. 
  
  

Hong Kong Stocks 

Fundamental Analysis: 

In the market, Chinese stocks listed in the U.S. soared, driving strong performance in Hong Kong’s technology stocks. JD.com, Inc. (9618.HK) and Kuaishou Technology (1024.HK) both rose by about 4%, while Meituan (3690.HK), Baidu, Inc. (9888.HK), Tencent Holdings Limited (0700.HK), Alibaba Group Holding Ltd (9988.HK), Xiaomi Corporation (1810.HK), and others all saw gains. 

Software, catering, and automobile stocks also rose, while some military, gas, and high-speed rail infrastructure stocks fell. 

Among the individual stocks, Bilibili Inc. (9626.HK) rose by 5.5%, GDS Holdings Limited (9698.HK) and China Literature Limited (0772.HK) rose over 4%, JD Group, Kuaishou, Weibo, JD Health, Meituan, and Baidu all rose over 3%, and Tencent, Ali Health, and Alibaba rose over 2%. 

Technical Analysis: 

(Hang Seng Index, 1-day chart) 

Market Trends: 

• The Hang Seng Index opened 1.7% higher at 19,181.31. 
• The Hang Seng Tech Index rose 2.5%. 
  
  

FTSE China A50 Index 

Fundamental Analysis: 

The three major A-share indices opened higher, with the market showing a volatile upward trend in early trading. The ChiNext Index and Shenzhen Component Index saw their gains expand to 1%, and the Shanghai Composite Index followed the upward trend. Funds were allocated to sectors such as semiconductors and CRO, while the automotive industry chain underwent significant adjustments. 

In terms of sector performance, precious metals, semiconductors, medical services, liquor industry, and insurance were among the top gainers, while automotive manufacturing, automotive components, tourism hotels, automotive services, and motors saw declines. In terms of themes, active performances were observed in storage chips, Chiplet concepts, CRO, PCB, and gold concepts. 

Technical Analysis: 

(SSE Composite Index, 1-day chart) 

Market Trends: 

• The Shanghai Composite Index rose 0.86% to 3,223.49. 
• The Shenzhen Component Index rose 1.13% to 11,042.21. 
• The ChiNext Index rose 1.41% to 2,227.83. 
• The STAR 50 Index rose 0.84% to 993.24. 

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