April 18th, the three major US stock indexes closed mixed on Thursday night. The Dow Jones Industrial Average fell by 1.33% to 39,142.23 points, the S&P 500 Index rose by 0.13% to 5,282.7 points, and the Nasdaq Composite Index fell by 0.13% to 16,286.45 points.

Since US President Trump announced reciprocal tariffs, the S&P 500 Index has fallen nearly 7%, while both the Dow Jones Industrial Average and the Nasdaq Composite Index have fallen more than 7%.

In particular, last night's drop of over 1% in the Dow Jones Industrial Average was mainly due to the significant decline of over 22% in UnitedHealth Group, one of its components. The company released its latest quarterly report, which failed to meet market expectations.

Major American tech giants mostly declined, with Nvidia falling by 2.87%, Microsoft by 1.03%, Nvidia by 2.87%, Google by 1.42%, Amazon by 0.99%, Meta by 0.17%, and Tesla by 0.07%. Only Apple rose by 1.39%.

The tariff turmoil has had a negative impact on the global economy, prompting the European Central Bank to cut interest rates again last night. Meanwhile, Trump once again blamed Federal Reserve Chairman Powell, stating that he moved too slowly and did not do his job well, "the sooner he leaves, the better."

Performance of the seven major US tech giants - iFinD Tonghuashun

In terms of popular Chinese stocks, the NASDAQ Golden Dragon China Index fell by 0.42%. Alibaba rose by 1.99%, JD.com fell by 1.73%, Pinduoduo rose by 1.45%, NIO closed flat, XPeng Motors fell by 2.62%, Li Auto rose by 1.72%, Bilibili rose by 0.12%, Baidu rose by 0.11%, NetEase rose by 1.36%, and Tencent Music fell by 0.32%.

Ba Wang Cha Ji (CHA) opened up more than 20% on its first day of trading in the U.S., reporting at $33.75.

The European Central Bank announced another interest rate cut

On April 17th local time, the European Central Bank announced a 25-basis-point reduction in policy interest rates. This is the seventh interest rate cut since June last year.

In its announcement, the European Central Bank stated that the rate cut was based on its latest assessment of inflation prospects, underlying inflation dynamics, and the strength of monetary policy transmission.

The European Central Bank also said that the progress in reducing inflation in Europe was proceeding smoothly. As expected, both overall and core inflation rates fell in March. In recent months, service sector inflation has also significantly eased. Moreover, most underlying inflation indicators suggest that inflation will remain stable around the European Central Bank Governing Council's medium-term target of 2%.

Wage growth is slowing down, and profits have cushioned the impact of high wage growth on inflation to some extent. This statement is consistent with the recent slowdown in inflation in the eurozone. On April 16th, data published by Eurostat showed that the continued decline in energy prices further drove down inflation. The eurozone's March inflation rate was 2.2%, slightly lower than February's 2.3%, approaching the European Central Bank's target level of 2%; core inflation also fell from 2.6% to 2.4%; service sector inflation dropped from 3.7% in February to 3.4%, the lowest level in nearly three years.

Screenshot of ECB President Lagarde's speech

European Central Bank President Christine Lagarde (Christine Lagarde) said that under the extraordinary external shocks (i.e., the tariff war initiated by the US), it made no sense to maintain a restrictive monetary policy.

Trump's conflict with Powell escalates

The ECB's interest rate cut strategy provided Trump with an excuse to criticize Fed Chairman Powell.

That day, US President Trump expressed that the Federal Reserve had the responsibility to reduce interest rates for the American people; if Europe had already cut rates, then the US would be at a disadvantage; Powell moved too slowly and did not do his job well. He also stated that Powell "would leave sooner rather than later."

Trump's comments - Social Media screenshot

At the Oval Office meeting, Trump emphasized that he had the authority to remove the Fed chairman at any time. Trump said, "If I want him to step down, he will do so very quickly, believe me." Trump also said that he was "not satisfied" with Powell and accused him of "playing politics" on interest rates.

Trump's comments were made the day after Federal Reserve Chairman Powell gave a speech at the Chicago Economic Club, where Powell pointed out that the government's tariffs put the Federal Reserve in a dilemma between curbing inflation and promoting growth.

Powell had previously emphasized multiple times that the Federal Reserve would maintain its policy independence and that policy adjustments should be based on economic data rather than political intervention.

According to知情人士, Trump met former Federal Reserve Governor Walsh at Mar-a-Lago a few months ago and mentioned the possibility of removing Powell from office before the end of his term and appointing Walsh as his successor. Walsh advised Trump against dismissing Powell and advocated allowing Powell to complete his term without interference.

Powell has stated that the president has no authority to dismiss the Federal Reserve chairman and pointed out that "the law does not allow it."

Market看好中概股

Against the backdrop of mixed performance of Chinese stocks, on April 17th, the A-share market rebounded with reduced volume, and the Shanghai Composite Index has risen for eight consecutive trading days. Specifically, real estate, consumer goods, and other domestic demand-related sectors performed strongly, and the semiconductor sector also showed active signs. The total trading volume of the entire A-share market exceeded 1 trillion yuan, with more than 3,100 stocks rising and nearly 100 stocks hitting the daily limit.

Goldman Sachs, in its latest report, maintained an "outperform" rating for A-shares and H-shares, considering that the sentiment of A-shares benefited more from policy stimulus, and its strategic allocation was slightly higher than that of H-shares.

HSBC Chief China Equity Strategist Jingjin Liu pointed out that now overseas investors are concerned about the risk of the US entering a recession, coupled with holding heavy positions in US stocks for many years, they have a need to diversify risks. Attracted by the valuation of Chinese stocks and looking forward to large-scale economic stimulus policies in mainland China, funds are being redirected to China.

Goldman Sachs expects that within the next 12 months, the MSCI China Index will have a 12% upside potential, and the CSI 300 Index will have a 15% upside potential.

Meanwhile, analysts at JPMorgan also stated in their report that the new round of tariff policies imposed by the Trump administration had no direct impact on Chinese internet companies, and the effect on online consumption was negligible. KraneShares (CSI ETF), an American fund company, also pointed out that revenue from the American market accounted for less than 2% of Chinese internet companies, making the actual impact of tariffs limited.

JPMorgan analysts believed that the so-called "reciprocal tariffs" imposed by the US had no direct impact on the revenue of Chinese internet companies (except for cross-border e-commerce). The main impact might be indirect. For example, after the high tariffs in the US led to a weakening of Chinese exports to the US, it could affect consumption, which in turn would weaken advertising demand.

JPMorgan estimated that the so-called "reciprocal tariffs" imposed by the US would have a negligible impact on China's online consumption, possibly less than 0.5%.

Specifically for major Chinese internet technology companies, JPMorgan believed that the stock most affected by the new round of tariff policies imposed by the Trump administration would be Pinduoduo. Relatively speaking, the stocks more defensive against tariff impacts would be Tencent and NetEase, as these two companies' digital entertainment (especially online games) businesses are counter-cyclical, and their revenue contributions from the US market are relatively small.

This article is an exclusive contribution of Observer Network and cannot be reprinted without permission.

Source: https://www.toutiao.com/article/7494460039860748810/

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