On Wednesday, October 16, 2024, following the opening of the U.S. stock market in the evening, the three major indices collectively experienced a downward trend. The Nasdaq Composite saw a rapid increase in its decline, at one point falling over 1%; the S&P 500 index fell by 0.29%; and the Dow Jones Industrial Average (DJIA) dropped by 0.21%. Concurrently, there was a collective plunge in semiconductor stocks. ASML's U.S. shares plummeted by more than 15% at one point during trading, NVIDIA's shares saw a maximum decline of over 6%, AMD's shares fell by more than 5%, and Broadcom's shares dropped by more than 3%. The cause was attributed to ASML's financial report, which showed that the third-quarter order value was significantly lower than market expectations, and the company also revised down its guidance for net sales and gross margin for 2025.
In recent weeks, international crude oil prices have become significantly more volatile due to geopolitical disturbances in the Middle East. On October 15, Brent crude oil fell by more than 5% at one point during trading, reporting $73.89 per barrel; West Texas Intermediate (WTI) crude oil fell by nearly 4.9%, reporting $70.21 per barrel. As a result, A-share oil stocks plummeted, with PetroChina falling by 3.66% and Sinopec falling by 2.94%.
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U.S. oil stocks also generally declined, with Total falling by about 4%. The impact of geopolitical factors in the Middle East on crude oil prices is mainly reflected in Israel's plan to launch strikes on Iranian military facilities, an event that has triggered market anxiety. The U.S. Department of Defense issued a statement that the advance team and components of the "THAAD" missile defense system have arrived in Israel. However, as market anxiety over potential Iranian retaliation by Israel has significantly eased, oil prices have also started to decline.
The International Energy Agency (IEA) has revised down its global oil demand growth forecast for 2024, reducing it from 900,000 barrels per day to 860,000 barrels per day. The IEA believes that the slowdown in global oil demand growth, coupled with ample supply, has offset geopolitical risks to oil production. Citigroup, on the other hand, stated that despite weak market fundamentals, if Middle Eastern conflicts disrupt crude oil supplies, oil prices could reach triple digits. Citigroup forecasts that Brent crude oil will average $74 per barrel in the fourth quarter of this year and $65 per barrel in the first quarter of 2025; however, in an optimistic scenario, oil prices could reach $120 per barrel.
The Nasdaq Golden Dragon China Index saw its decline expand to 5%. Among the constituent stocks, JD.com fell by more than 8%, BOSS Zhipin, Miniso, and Ctrip fell by more than 7%, while Alibaba, Li Auto, and Weibo fell by 4%.
The decline of the three major U.S. stock indices, especially the widening drop of the Nasdaq Composite, reflects market uncertainty. The collective plunge of semiconductor stocks, the sharp decline of ASML, and the falls of NVIDIA, AMD, and Broadcom, have put pressure on the technology stock sector. This is not only due to ASML's poor financial performance but may also indicate that the entire semiconductor industry is facing some challenges. Order values below expectations and revised downward sales and gross margin guidance could affect investors' confidence in semiconductor stocks.
Fluctuations in international crude oil prices are strongly influenced by geopolitical factors in the Middle East. Israel's plan to strike Iranian military facilities has triggered market anxiety, leading to increased oil price volatility. Although actions by the U.S. Department of Defense have somewhat eased market anxiety, the trajectory of oil prices remains uncertain. The differing forecasts for oil prices by the International Energy Agency and Citigroup also reflect market disagreements on the future direction of crude oil prices. The IEA's revised expectations indicate a slowdown in global oil demand growth and relatively ample supply, which could exert some downward pressure on oil prices. Citigroup, however, believes that if Middle Eastern conflicts disrupt crude oil supplies, oil prices could surge significantly.
The decline of the Nasdaq Golden Dragon China Index and the poor performance of its constituent stocks may be related to various factors. Global economic uncertainty and Sino-American trade relations could both impact Chinese concept stocks. The falling stock prices of companies such as JD.com, BOSS Zhipin, Miniso, Ctrip, Alibaba, Li Auto, and Weibo also reflect investors' concerns about the future development of these companies.In general, the current market situation is fraught with uncertainty. The decline of the three major U.S. stock indices, the plunge in chip stocks, the fluctuations in international crude oil prices, and the drop in the NASDAQ China Golden Dragon Index all indicate that the market is facing numerous challenges. Investors need to closely monitor market dynamics and make investment decisions cautiously. At the same time, governments of various countries and international organizations also need to take proactive measures to alleviate geopolitical tensions, stabilize market expectations, and promote the stable development of the global economy.
For the chip industry, ASML's poor financial report may trigger industry adjustments. Chip companies need to strengthen technological innovation and enhance product competitiveness to meet market challenges. For the oil industry, geopolitical factors in the Middle East remain a key factor affecting oil prices. Countries need to strengthen energy cooperation to ensure the safe and stable supply of energy.
In the coming period, market uncertainty may continue to exist. Investors need to remain calm, analyze the market situation rationally, and choose the right investment strategy. At the same time, governments of various countries and international organizations also need to strengthen cooperation to jointly address the challenges faced by the global economy and promote the sustainable development of the global economy.