U.S. Stocks Surge 4% as Investors Shift to Riskier Assets

On May 12, U.S. stock markets opened strongly, with the three major indices showing significant gains. The Nasdaq Composite Index surged by approximately 4% at the start of trading, while popular Chinese stocks listed in the U.S. also saw substantial increases, with the Nasdaq Golden Dragon China Index rising by more than 5%.

This surge in U.S. markets was accompanied by a decline in gold prices. By 10:00 PM Beijing time, the spot price of gold and COMEX gold futures both fell by more than 2%. This decline in gold prices suggests a shift in investor sentiment away from safe-haven assets, which is often indicative of increased risk appetite in the market.

In contrast, oil prices showed a strong upward trend. By 10:16 PM Beijing time, both U.S. WTI crude oil and Brent crude oil had risen by more than 2%. This increase in oil prices can be attributed to various factors, including geopolitical tensions and supply disruptions, which have led to a tightening of global oil supplies.

The strong performance of U.S. stocks and the rise in oil prices reflect a broader trend of increased investor confidence in the global economy. The surge in Chinese stocks listed in the U.S. is particularly noteworthy, as it indicates growing optimism about the economic prospects of China. This optimism is further supported by recent reports that hedge funds, particularly those based in the U.S., have increased their bullish bets on Chinese stocks, including those listed in the U.S. and domestic A-shares.

The rise in U.S. Treasury yields also supports this narrative. By 10:24 PM Beijing time, the yield on 10-year U.S. Treasury notes had risen by 6.09 basis points to 4.443%. This increase in yields reflects a reduction in demand for safe-haven assets, as investors shift their focus towards riskier assets in search of higher returns.

In summary, the strong opening of U.S. stock markets, the decline in gold prices, and the rise in oil prices all point to a shift in investor sentiment towards increased risk appetite. This trend is further supported by the strong performance of Chinese stocks listed in the U.S. and the increase in bullish bets on Chinese stocks by hedge funds. The rise in U.S. Treasury yields also reflects a reduction in demand for safe-haven assets, as investors seek higher returns in riskier assets.