Trending Sectors | Tech Slump, EV Struggles & AI Woes, Defensive Plays in Focus as Market Caution Prevails

【Major U.S. Stock Indices】

The U.S. stock market's three major indices all declined. The S&P 500 fell 0.33% to 5,813.67 points; the Dow Jones dropped 0.22% to 42,141.54 points; and the Nasdaq decreased 0.56% to 18,607.93 points. Concerns about future economic growth remain the main factors suppressing the stock market, despite some companies reporting earnings slightly above expectations, overall market sentiment remains pessimistic.

【Performance of Leading Tech】

Stocks of the seven major tech giants broadly declined. Microsoft dropped 6.05%; its AI-boosted Azure revenue growth was overshadowed by cautious future growth predictions and massive AI expenditures, raising market concerns. Apple fell 1.82%, as new product launches and strong performance in the Indian market couldn't offset slower-than-expected sales growth. Amazon decreased by 3.28%, with earnings exceeding expectations, but investor concerns lingered over its sizable capital expenditure plans impacting profit margins. Google fell 1.92%, with large fines posing an underlying threat despite better-than-expected performance. Meta declined 4.09%, as continuous losses in its Metaverse business and increased capital expenditures worried investors. Tesla was down 2.99%, with growing concerns about its future electric vehicle market share.

【AI and Chip Sector Performance】

In the AI sector, Nvidia fell 4.72%, with positive prospects for its AI chips overshadowed by recent earnings pressures affecting its stock price. SMCI plummeted 11.97% due to audit issues, sparking concerns about its corporate governance. Arm Holdings declined by 8.48%, as analysts' valuation downgrades intensified market sell-offs. The chip manufacturing sector wasn't spared either, with TSMC falling 2.03% and Intel dropping 3.50%, as the industry faces overall demand weakness and inventory pressures.

【Electric Vehicle and New Energy Sector Performance】

The electric vehicle sector saw broad declines, with Tesla falling for four consecutive days for a cumulative loss of 7.18%, amid skepticism about its leadership in the EV market. Domestic EV makers like Li Auto, NIO, and XPeng also performed poorly, dropping 13.58%, 4.67%, and 1.06%, respectively, due to doubts about the sustainability of their international expansion strategies.

【Other Sector Performance】

In weight-loss drug stocks, Amgen saw a slight increase of 1.46%, while most others like Eli Lilly and Novo Nordisk declined, amid rising concerns over increased competition in the weight-loss drug market. Oil stocks showed mixed performance, as slight rises in oil prices were tempered by cautious market views on the profitability of oil companies. Cryptocurrency-related stocks broadly plunged, with Coinbase and Riot Platforms dropping 15.34% and 11.83%, respectively, as market caution over the volatility in the crypto market remained high.

【Investor Advice】

Given the high market volatility, investors should act cautiously, particularly with allocations in tech stocks and high-valuation stocks. Consider focusing on relatively defensive sectors, such as consumer staples and the healthcare sector, selecting companies with robust fundamentals for long-term investments. Additionally, keep an eye on macroeconomic data and corporate earnings reports to adjust investment strategies promptly.