Triple Witching Day: Nvidia Drags S&P, Nasdaq; Dow Up 1.5% Best Since May; Palladium Jumps 11%

U.S. existing home sales fell for the third consecutive month in May, with the annualized total of 4.11 million units hovering at a thirty-year low, while house prices hit a new historical high, increasing by 5.8% year-on-year, marking the largest increase since October 2022. The U.S. June Markit manufacturing PMI initial value reached a three-month high of 51.7, the service sector PMI initial value hit a 26-month high of 55.1, and the composite PMI initial value also reached a 26-month high of 54.6. The PMI data briefly lifted the U.S. dollar and Treasury yields, also causing precious metals to plunge.

The Eurozone's June manufacturing PMI initial value dropped to a six-month low of 45.6, with both French and German PMIs falling below expectations, French service sector activity contracting, and German economic activity slowing down. The UK's June manufacturing PMI initial value reached a 23-month high of 51.4, but business growth for the month slowed to the lowest in seven months, causing the euro and pound exchange rates against the U.S. dollar to decrease.

Friday is the "triple witching hour," when stock options, stock index futures, and stock index options contracts expire, occurring on the third Friday of March, June, September, and December each year, which may increase trading volume and volatility, and lead to unusual changes in the prices of underlying assets. This time, approximately $5.5 trillion in options are set to expire, the largest scale in history. The expiration value of options related to Nvidia is the second-largest among all underlying assets, only behind the S&P 500. Today also coincides with the rebalancing of the S&P Dow Jones Index and related ETF component weights.

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The S&P and Nasdaq failed to turn positive, while the Dow Jones continued to rise for four days, with Nvidia's market value evaporating by over $220 billion in two days, and Microsoft and Google reaching new highs.

On Friday, June 21, U.S. stocks only saw the Dow Jones open higher, with the highest increase of 122 points, while the S&P 500 index fell as much as 0.4%, and the Nasdaq fell by over a hundred points or 0.6%. Before noon, the Dow Jones turned negative at one point, and the S&P and Nasdaq attempted to turn positive but failed, with the Russell 2000 small-cap stocks falling 0.5% before turning positive.

At the beginning of the trading day, semiconductor and AI stocks led the decline, with the Philadelphia Semiconductor Index falling by more than 2%, Nvidia falling by about 5% at one point, and Bitcoin falling below $64,000, dragging down blockchain-related stocks, but the biotechnology index ETF rose by more than 1%, and gold and silver mining stocks, as well as copper mining stocks, first rose and then fell.

By the close, the S&P 500 index fell for the third day in nine days, further distancing itself from new highs, while the Nasdaq and Nasdaq 100 also fell for two consecutive days away from new highs, having previously broken records for seven consecutive days, with the Dow Jones rising for four days and holding a four-week high:

The S&P 500 index closed down 8.55 points, a decrease of 0.16%, at 4,464.62 points, with a weekly gain of 0.6%. The Dow Jones closed up 15.57 points, a gain of 0.04%, at 39,150.33 points, with the best single-week performance since May, with a weekly gain of 1.5%. The Nasdaq closed down 32.23 points, a decrease of 0.18%, at 17,689.36 points, with a weekly gain of less than 0.01%.

The Nasdaq 100 fell by 0.3%, and the Nasdaq Technology Market Value Weighted Index (NDXTMC), which measures the performance of technology stocks in the Nasdaq 100, fell by 0.8%, both distancing themselves from new highs for two consecutive days. The Russell 2000 small-cap stocks rose by 0.2%, and the "fear index" VIX fell by 0.6% but remained above 13.

The U.S. stocks rose earlier in the week to save the later decline, with all three major stock indices accumulating gains for the week, with the Dow Jones showing the best increase since May.On Friday, the S&P technology sector closed down over 0.8%, the energy sector fell by 0.68%, while the telecommunications services sector ended up by 0.66%, and the consumer discretionary sector rose by 1.02%. For the week, the consumer discretionary sector gained 2.5%, the energy sector accumulated a rise of over 1.8%, the financial sector increased by 1.70%, the industrial sector rose by 1.55%, the consumer staples sector increased by 0.89%, the telecommunications sector gained 0.77%, the materials sector rose by 0.76%, the healthcare sector increased by 0.58%, the real estate sector fell by 0.45%, the technology sector dropped by 0.66%, and the utilities sector declined by 0.77%.

This week, the energy sector performed brilliantly, while the technology sector was not faring well.

Analysts have noted that recent technical indicators and inflows into technology stocks suggest that tech stocks have been overbought in the short term and may have become overpriced, making a short-term correction not unexpected. The momentum driving Nvidia's stock price may weaken after the expiration of options on Friday.

Friday marked the last day for adjustments for many indices and ETFs, including Crowdstrike's addition to the S&P 500 index and a significant increase in Nvidia's weight in the largest technology ETF, the SPDR Fund (XLK), which could bring in billions of dollars in buying, while Apple's weight was heavily reduced.

Most star technology stocks rose. "Metaverse" Meta fell 1.4% to a two-week low, Google A rose 1.8% to a new historical high, Amazon increased by 1.6% to a six-week high, Tesla gained 0.8%, and Netflix rose by 1%, approaching a historical high; Apple rose by 1% and then fell by 1%, reaching a near two-week low, breaking away from historical highs for three consecutive days, with a market value of $3.18 trillion, surpassing Nvidia to rank second in the U.S. stock market; Microsoft rose by 0.9% to return to a historical high, with a market value of $3.34 trillion, ranking first in the U.S. stock market.

Chip stocks corrected for two consecutive days, with intraday losses narrowing. The Philadelphia Semiconductor Index closed down by 1.3%, moving away from historical highs for two consecutive days, and the industry ETF SOXX fell by 1%, further moving away from its peak. Nvidia closed down by 3.2%, moving away from historical highs for two consecutive days, with a market value of $3.11 trillion, ranking third in the U.S. stock market, and the Nvidia double long ETF fell by 6%, further moving away from new highs; Broadcom fell by more than 4%, moving away from its peak for three consecutive days; ARM fell by 0.3%, Qualcomm fell by more than 1%, TSMC and Lam Research in the U.S. stock market fell by nearly 1%, Applied Materials fell by nearly 2%, Micron Technology fell by more than 3%, all moving away from new highs for two consecutive days; AMD fell by 0.3%, moving away from a near two-week high, while Intel rose by 1.5% to a four-week high.

Among the U.S. "technology sector's seven sisters," Nvidia's market value evaporated by over $220 billion in two days, ending its eight-week consecutive rise trend, with a weekly decline of 4%, while Microsoft rose by 1.6% for the week and has been rising for three consecutive weeks. Apple fell by 2.4% for the week, Tesla rose by 2.8%, Amazon rose by about 3%, and Google A rose by 1.6%.

AI concept stocks also saw more falls than rises. CrowdStrike fell by 0.4%, moving away from new highs for three consecutive days, Oracle fell by about 1%, moving away from new highs for two consecutive days, SoundHound.ai fell by more than 1%, BigBear.ai rose by more than 7%, C3.ai fell by nearly 1%, Snowflake rose by 1%, still hovering at a 17-month low, Palantir fell by 6.7%, Adobe rose by 2%,刷新ing a three-month high, Dell fell by more than 2%, and Super Micro Computer fell by 6% and then closed down by more than 1%.

In terms of news, Google conducted software system updates for Pixel phones in June. Apple announced that it would not release AI features to the European market this year, citing regulatory uncertainty brought by the Digital Markets Act. Musk revealed the new FSD computing hardware, which will be directly named "AI5," with a 4nm process and a 10-fold increase in computing power. Tesla's total headcount has shrunk by at least 14% this year, after Musk previously stated that he would cut more than 10% of the workforce. Some institutions have raised their target price for Nvidia, and Bernstein raised its target price for Apple, optimistic about AI monetization opportunities. OpenAI acquired the search and analytics startup Rockset, marking its most significant acquisition in history.

Chinese concept stocks once again followed the U.S. stock market's decline. The ETF KWEB fell by more than 1%, CQQQ fell by 0.3%, and the Nasdaq Golden Dragon China Index (HXC) fell by nearly 1%, briefly breaking below the 5900-point integer level, falling for five consecutive days to a two-month low.Among popular individual stocks, JD.com fell by 2%, Baidu fell by 0.3%, and Pinduoduo fell by 2.6% but closed down by 0.2%. Alibaba and Tencent ADR fell by about 1%, Bilibili rose by over 6%, NIO fell by 0.7%, XPeng Motors rose by 3.8%, and Li Auto fell by nearly 1%.

The leading stock of retail investor group buying, GameStop, fell by 6% on Friday, nearly 17% for the week, and is close to erasing the gains made in June. The stock experienced significant double-digit percentage fluctuations almost every day from the previous Friday to last week, with a drop of over 12% on Monday.

Among other stocks with significant changes, the biopharmaceutical company Sarepta rose by over 30% to its highest level since early 2021, as the U.S. Food and Drug Administration (FDA) approved the expansion of its gene therapy for Duchenne muscular dystrophy, enhancing its revenue potential.

European stocks turned negative again, with the Italian stock index leading the main national indices with a 1% drop. The pan-European Stoxx 600 closed down by 0.73%, marking the second day of decline in five trading days, with bank stocks leading the decline again, but the index still rose by 0.8% for the week. The French stock index rose by 1.7% for the week. European semiconductor concept stocks generally closed lower, with Infineon falling by over 7%, Aixtron by over 9%, and ASM International rising by over 5% and setting a new high.

U.S. Treasury yields turned positive on Friday and rose by more than 2 basis points for the week. The spread between French and German benchmark bond yields was the widest in twelve years.

U.S. Treasury yields fell to their daily low before the release of favorable U.S. PMI data and then rebounded to rise. The two-year U.S. Treasury yield, which is more sensitive to monetary policy, rose by up to 2 basis points during the day and approached 4.75%, rising by more than 2 basis points for the week. The 10-year benchmark bond yield rose by up to 3 basis points to 4.28%, nearly 4 basis points for the week, and last Friday, U.S. Treasury yields had fallen to their lowest level since early April in ten weeks.

The 10-year German bund yield fell by 2 basis points at the end of the day, rising by 5 basis points for the week. The 10-year French bond yield rose by 1 basis point at the end of the day, rising by more than 8 basis points for the week. The spread between French and German benchmark bond yields rose to 80 basis points, the widest since the peak of the Eurozone debt crisis in 2012, representing investors' demand for a higher premium to hold French bonds. France's early parliamentary elections could lead to a victory for the far-right party, and some analysts believe that the difference in benchmark bond yields could rise to the 100 basis point threshold.

Oil prices fell on Friday from their seven-week high but still rose for two consecutive weeks, with a weekly increase of over 3%. U.S. natural gas rose by over 6% for the week.

The demand for fuel for summer travel and cooling drove oil prices to rise for two consecutive weeks. WTI rose by more than 3.43% in four trading days this week, up 3.9% last week and ending three consecutive weeks of decline. Brent crude oil rose by 3.17% for the week, also rising for two consecutive weeks, and had risen by 2.8% last week.

However, on Friday, oil prices fell after rising, with U.S. oil closing at a seven-week high for three consecutive trading days. WTI August futures fell by $0.56, down by nearly 0.69%, to $80.73 per barrel. Brent August futures fell by $0.47, down by about 0.55%, to $85.24 per barrel.The more actively traded US oil WTI August futures fell below the $81 mark, with the deepest intraday drop of $0.93 or 1.1%, erasing gains since Tuesday. International Brent crude saw its deepest drop of $0.87 or 1%, briefly falling below $85, approaching the erasure of gains since Wednesday.

JPMorgan Chase stated that gasoline demand in the United States last week surged to the highest level since the end of the COVID-19 pandemic, and demand is expected to continue to strengthen before the July 4th holiday. Additionally, analysis points out that for the first time in several weeks, US EIA crude oil, gasoline, and distillate inventories all declined simultaneously last week, indicating that increasing demand could be beneficial for oil prices in the short term. Mainstream investment banks such as Goldman Sachs are bullish on oil prices in the third quarter.

The European benchmark TTF Dutch natural gas futures fell by more than 1.5%, trading near a two-week low, while ICE UK futures also fell by 1.5%. The US natural gas July contract fell by more than 2% and briefly broke below $2.70, hitting a two-week low, with the year-to-date increase narrowing to 8%. According to CCTV News, the first liquefied natural gas (LNG) carrier has crossed the Red Sea since January this year.

The US Dollar Index (DXY), which measures the value of the dollar against a basket of six major currencies, rose by up to 0.3% and briefly broke through 105.90, setting a seven-week high since May 1st, with a weekly increase of 0.2% and three consecutive weeks of gains. Analysts suggest that the monetary policy stance of other European central banks, which is more dovish relative to the Federal Reserve, may continue to boost the US dollar in the short to medium term.

Non-US currencies普遍下跌。The Japanese yen fell by up to 0.5% against the US dollar and broke below the 159 mark, reaching its lowest level in nearly eight weeks since April 29th, when the Japanese government initiated a new round of foreign exchange market intervention, and the yen has been hovering at its lowest level in thirty-four years. The offshore renminbi against the US dollar slightly turned positive during US stock market trading but remained below 7.29 yuan, hovering at a seven-month low.

The euro against the US dollar fell by up to 0.3% and broke below 1.07, reaching a seven-week low since the end of April. Last Friday, it briefly fell to 1.0667, also hitting the lowest since May 1st, and the week ended almost flat as investors prepared for the possibility of the far-right party in France, the second-largest economy in the eurozone, potentially winning a majority of seats in the parliamentary elections. The British pound against the US dollar fell to 1.2622, the lowest since mid-May, with a weekly drop of 0.3%.

Mainstream cryptocurrencies fell for three consecutive days. Bitcoin, the largest by market value, fell by nearly 2% and broke below $64,000, hitting a five-week low; Ethereum, the second-largest, fell by 1% and broke below $3,500, approaching a four-week low and almost erasing the gains for the week.

Gold turned down by 1.8% after hitting a two-week high, with a weekly loss of about 0.6%, while most London metals fell by more than 1% on Friday. The market believes that cooling economic data supports the US to cut interest rates as soon as possible, which would be beneficial for precious metals that do not provide fixed yields. The uncertainty of elections in many parts of the world and the escalation of conflicts in the Middle East both provide support for safe-haven assets, and gold prices should have continued to rise for the second consecutive week.On Friday, spot gold once rose by 0.4% to approach the round number of $2370, setting a two-week high, but it quickly turned to a decline during the US stock market session, with the deepest drop reaching 1.8% and briefly falling below $2320, falling sharply by $52 from the daily high, which led to a weekly loss of about 0.6%.

COMEX August gold futures closed down 1.6% at $2331.70 per ounce, while COMEX July silver futures fell 4.2% to $29.54 per ounce. Spot silver fell as much as 4%, breaking through the psychological round number of $30 again, erasing the weekly gains and turning to a 0.2% decline.

Spot palladium once rose by 11% and briefly broke through the round number of $1000, reaching a one-month high, with the annual decline narrowing to about 12%. Some analysts believe that due to car manufacturers actively replenishing the after-treatment catalysts for internal combustion vehicles, investors have covered their short positions in palladium. Previously, as of the week ending June 11, the net short position in COMEX palladium futures reached a historical high since the data began in 2009.

The rise of the US dollar put pressure on the prices of basic metals in London. The economic barometer "Dr. Copper" closed down $176 or 1.8%, falling back below $9700, with a weekly loss of 0.6% and approaching a two-month low. London aluminum also approached a two-month low and slightly fell for the week. London zinc fell 1% but accumulated a 2.7% increase for the week, while London lead fell more than 1% but rose 2.4% for the week. London nickel fell more than 1%, approaching a ten-week low again, with a weekly loss of 2%. London tin fell more than 1%, with a weekly increase of 1%.