The "small non-farm" ADP private sector employment unexpectedly declined, adding fuel to the signs of economic slowdown and further solidifying expectations for a rate cut in September. The US ADP employment increase in July was 122,000, the lowest since February. The US second quarter employment cost index was lower than expected, with the year-on-year wage growth rate hitting a three-year low. Additionally, the US Treasury maintained the quarterly long-term debt issuance scale unchanged, both contributing to the decline in US Treasury yields.

The Federal Reserve's decision and Powell's press conference both hinted at a possible rate cut in September, with US stocks, bonds, crude oil, gold, and the yen rising, and market expectations for a rate cut increasing. The "new Fed mouthpiece" analysis stated that the Fed's statement removed the phrase "closely monitoring" inflation risks, which has been used for the past two years. This significant change indicates that inflation may no longer be a barrier to a rate cut, especially as the labor market continues to cool.

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The CME FedWatch Tool showed that traders expected the Fed to cut rates three times by the end of the year, totaling a 70 basis point cut for the year, up from a previous expectation of a 64 basis point cut. The market's calls for a rate cut were rising, with the "new bond king" Gundlach and US Senate Democratic member, "antitrust crusader" Warren, urging a rate cut now.

AI demand has been verified by multiple sources, leading to a significant rise in global chip stocks, with the US chip index surging by over 7% and Nvidia rising by nearly 13%. Zuckerberg's "Metaverse" company, Meta, reported second-quarter revenue, profit, and third-quarter revenue guidance that exceeded expectations, rising by more than 5% after hours. Samsung's second-quarter operating profit soared by 1458%, and Qualcomm's QCT semiconductor business sales grew by 12%, driving the company's revenue and profit to exceed expectations. However, Arm's full-year revenue guidance was lackluster, causing a 13% drop after hours.

According to CCTV News, Hamas's supreme leader Haniya was assassinated by Israel at his residence in Iran, reigniting Middle East geopolitical conflicts and increasing risk-aversion sentiment. Gold rose by more than 1.6% on Wednesday, with a monthly increase of over 5%, the largest in four months, and oil prices quickly rose by more than 4%, erasing the week's losses.

Eurozone inflation unexpectedly rose in July, with the CPI increasing by 2.6% year-on-year, exceeding expectations, and the core CPI remaining at a high level for three consecutive months. After the data was announced, the euro-to-US dollar exchange rate rose slightly. However, the money market still expects the European Central Bank to cut rates by 25 basis points for the second time in September and to cut a total of 57 basis points by the end of the year.

Risk-aversion sentiment, combined with the Bank of Japan's rate hike, led the yen to break through the 150 mark for the first time in four months. Bank of Japan Governor Haruhiko Kuroda "hawkishly" stated that there may be further rate hikes within the year. The Japanese Ministry of Finance stated that it spent $3.66 billion in the past month to support the yen exchange rate through foreign exchange intervention.

Chip stocks rebounded significantly, with the Nasdaq rising by more than 3% during the session, the S&P 500 rising by more than 2% at one point, Nvidia rising by nearly 13%, and the chip index rising by 7%.

On Wednesday, July 31st, US stock indices rose collectively, with technology, chip, and AI stocks performing the best, while blue-chip and small-cap stocks lagged in gains.

US stock indices continued to rise overall, hitting a daily high during Powell's press conference around 3 am Beijing time, with the technology-heavy Nasdaq rising by nearly 3.2% at the end of the session and leading the main indices; the S&P 500 index rose by more than 2.1%; the Dow Jones, closely related to the economic cycle, rose by more than 1.1%; and the Russell small-cap index rose by more than 2.5%.As of the market close:

The S&P 500 index rose by 85.86 points, a gain of 1.58%, to close at 5,522.30 points, with a cumulative increase of 1.13% in July. The Dow Jones Industrial Average (DJIA) closed up by 99.46 points, a gain of 0.24%, at 40,842.79 points, with a cumulative increase of 4.41% in July, marking three consecutive months of gains and the best monthly performance of the year. The Nasdaq Composite closed up by 451.98 points, a gain of 2.64%, at 17,599.40 points, with a cumulative decrease of 0.75% in July, ending two consecutive months of gains.

The Nasdaq 100 rose by 566.16 points, a gain of 3.01%, with a cumulative decrease of 1.63% in July; the Nasdaq Technology Market Capitalization-Weighted Index (NDXTMC), which measures the performance of technology stocks in the Nasdaq 100, closed up by 4.11%, with a cumulative decrease of 3.85% in July; the Russell 2000 index closed up by 0.51%, with a cumulative increase of 10.07% in July and the best monthly performance of the year; the CBOE Volatility Index (VIX), also known as the fear index, closed down by 7.52%, at 16.36, with a cumulative increase of 33.88% in July.

Despite the S&P 500's slight rise in July, there was a significant disparity between small-cap stocks (which rose by 10% in July) and the Nasdaq (which fell by 0.75% in July).

The Philadelphia Semiconductor Index closed up by 7.01%, with a cumulative decrease of 4.37% in July, ending two consecutive months of gains. The Dow Jones KBW Regional Banking Index closed down by 0.44%, with a cumulative increase of 18.60% in July. The NASDAQ Biotechnology Index closed down by 0.15%, with a cumulative increase of 6.57% in July.

Most US industry ETFs closed higher. The semiconductor ETF closed with a surge of over 7%, global technology stock ETFs and technology industry ETFs each rose by more than 4%, and consumer discretionary ETFs, internet stock index ETFs, and utility ETFs each rose by at least 1%. Meanwhile, global airline industry ETFs, regional bank ETFs, healthcare industry ETFs, and financial industry ETFs each fell by less than 0.5%.

Most of the 11 sectors of the S&P 500 closed higher. The S&P Information Technology/Technology sector closed up by 3.95%, the consumer discretionary sector rose by 1.79%, the telecommunications sector rose by 1.29%, and the energy sector had the smallest gain of 0.42%, while the healthcare sector fell by 0.39%.

Among the "Tech Seven Sisters," all except Microsoft closed higher. Nvidia led the pack with a gain of 12.81%, with its market value increasing by $32.6934 billion in a single day, marking the largest single-day increase in history, although it still fell by 5.28% over the month of July. Notably, Morgan Stanley re-rated Nvidia as a "top pick" while maintaining its "overweight" rating. The firm believes that Nvidia's Blackwell could deliver strong results in the fourth quarter and set a target price of $144.00 for Nvidia, which is 38.8% higher than Tuesday's closing price.

Tesla closed up by 4.24%, Amazon by 2.9%, "Metaverse" Meta by 2.51%, Apple by 1.5%, and Google A by 0.73%. Microsoft, however, fell by 1.08% after reporting its earnings, with second-quarter revenue, EPS earnings, and operating profit all slowing down compared to the first quarter. J.P. Morgan Chase lowered its target price for Microsoft from $520 to $506, still leaving a 20% upside and maintaining an overweight rating.

Chip stocks generally rose across the board. The Philadelphia Semiconductor Index rose by 7.01%; the industry ETF SOXX rose by 6.71%; and the Nvidia double leveraged ETF rose by 25.99%.Broadcom's stock rose by 11.96%, ASML's ADR increased by 8.89%, KLA Corporation's stock climbed 8.46%, Arm Holdings' stock advanced 8.43%, Qualcomm's stock gained approximately 8.39%, Applied Materials' stock jumped 7.86%, TSMC's US-listed shares surged 7.29%, Micron Technology's stock rose 7.08%, Marvell Technology's stock increased 6.66%, ON Semiconductor's stock was up 5.79%, AMD's stock climbed 4.36%, with the company's AI revenue doubling year-over-year in the second quarter and an upward revision of the MI300 annual sales outlook. Intel's stock edged up by 2.02%, with media reports suggesting that the company may announce thousands of layoffs as early as this week.

AI concept stocks experienced a collective uptick. Serve Robotics, an AI robot delivery company in which Nvidia holds a stake, saw its stock surge 16.8%, Super Micro Computer's stock rose 5.3%, Dell's stock increased by 4.67%, BigBear.ai's stock gained 4.14%, SoundHound AI, an AI voice company also backed by Nvidia, climbed 2.83%, Oracle's stock was up 2.79%, Palantir's stock advanced 1.97%, Snowflake's stock ticked up 1.16%, BullFrog AI's stock inched 0.68% higher, while CrowdStrike's stock fell 0.72%. CrowdStrike faces a class-action lawsuit from investors due to system outages and sell-off issues, with Delta Air Lines' CEO stating that the downtime incidents involving CrowdStrike and Microsoft cost the airline $500 million.

Chinese concept stocks mostly headed higher. The Nasdaq Golden Dragon China Index closed up by 0.78%, with a cumulative decline of 1.61% in July. Among ETFs, the China Technology Index ETF (CQQQ) closed up by 3.75%, and the China Internet Index ETF (KWEB) closed up by 1.65%.

Among popular Chinese concept stocks, Li Auto's stock rose 5.11%, Pinduoduo's stock gained 4.65%, Tencent Holdings (ADR)'s stock advanced 2.13%, Bilibili's stock climbed 1.54%, XPeng's stock increased 1.51%, Alibaba's stock was up 1.09%, NetEase's stock edged up by 0.5%, NIO's stock ticked up 0.45%, JD.com's stock inched up 0.11%, while Zeekr's stock fell 0.12%, and Baidu's stock declined 0.19%.

Among other stocks that saw significant changes due to earnings reports:

Meta anticipates that infrastructure costs will become a significant driver of expenditure growth by 2025, with the "Metaverse" Reality Lab's operating losses expected to increase substantially year-over-year, and AI investments will also lead to a significant increase in capital expenditures by 2025. CEO Zuckerberg stated that by the end of this year, Meta AI is poised to become the world's most widely used artificial intelligence assistant.

AI drives chip demand, with Samsung's operating profit soaring 1458% in the second quarter.

Arm Holdings closed up 8.43%, as increasing demand for AI devices drives demand for the company's chips, with Arm Holdings reporting higher profits and revenues for the first quarter.

Qualcomm closed up 8.39%, with the company's revenue and profit exceeding expectations, driven by a 12% increase in the third-quarter QCt semiconductor business. Qualcomm stated that its personal computer (PC) business has surpassed internal targets, and the smartphone market has been "slightly flat" this year.

Starbucks' US-listed shares closed up 2.65%, with the company maintaining its forecast for the fiscal year 2024.New Oriental closed down 9.29%, with Q4 revenue increasing by 32% year-on-year, operating profit plummeting by 78%, and projected Q1 revenue for the fiscal year 2025 (excluding live e-commerce business of self-operated products of Eastern Selection) to rise within the range of 31% to 34% year-on-year.

HSBC Holdings closed up 3.72%, benefiting from the continuous growth in global banking business and market revenue, HSBC Bank's second-quarter profit significantly exceeded expectations, announcing a buyback of at least $3 billion in shares, HSBC's Hong Kong shares surged 4.6%.

Boeing closed up 2% after announcing its performance and appointing a new CEO. The adjusted free cash flow for the second quarter was negative $4.33 billion, with market expectations at negative $4.34 billion, and second-quarter revenue was $16.9 billion, with market expectations at $17.46 billion.

Gold prices soared, leading to a majority increase in precious metals and mining stocks. Harmony Gold closed up 7.05%, Gold Fields increased by about 4.2%, Pan American Silver rose by over 3.8%, and Cordillera Mining, Newmont Mining, and FSM also rose by at least 3.2%.

On Wednesday, eurozone inflation unexpectedly rose, and European stock markets closed higher collectively. In July, the banking sector increased by about 5.6%, while the technology sector fell by over 6%:

The pan-European Stoxx 600 index closed up 0.79%, at 518.14 points, with a cumulative increase of 1.32% in July. The Eurozone STOXX 50 index closed up 0.66%, at 4872.94 points, with a cumulative increase of 0.43% in July. Among them, Dutch chip company ASML Holding led the gains, rising by 10% at one point during the session, and eventually closed up 5.56%, with a cumulative decrease of 11.79% in July.

The German DAX 30 index closed up 0.48%, with a cumulative increase of 1.50% in July. The French CAC 40 index closed up 0.76%, with a cumulative increase of 0.70% in July. The Italian FTSE MIB index closed down 0.34%, with a cumulative increase of 1.84% in July. The UK FTSE 100 index closed up 1.13%, with a cumulative increase of 2.50% in July. The Dutch AEX index closed up 1.39%, with a cumulative decrease of 0.35% in July. The Spanish IBEX 35 index closed down 1.23%, with a cumulative increase of 1.1% in July.

In terms of sectors, the STOXX 600 Banks index had a cumulative increase of 5.59% in July, the Real Estate index increased by 4.02%, the Financial Services index increased by 2.70%, the Retail index increased by 2.41%, the Travel & Leisure index decreased by 1.38%, the Automobiles & Parts index decreased by 3.97%, the Basic Resources index decreased by 4.82%, and the Technology index decreased by 6.05%.

Among other stocks that saw significant changes due to earnings reports:

Sportswear giant Adidas initially rose, but eventually closed down 2%. After a prolonged period of sluggish sales, Adidas seems to be showing signs of recovery, with the company's Q2 revenue and net profit exceeding expectations, and an upward revision of its full-year performance guidance.Powell hints at interest rate cuts as early as September, U.S. Treasury yields plunge, with the two-year yield falling by 9 basis points, and a cumulative drop of over 48 basis points in July.

At the end of the day, the two-year U.S. Treasury yield, which is more sensitive to monetary policy, fell by 8.87 basis points to 4.2698%. It rose to a daily high of 4.3894% at 02:00 Beijing time when the FOMC interest rate decision statement was released, then fell. After Federal Reserve Chairman Powell hinted at interest rate cuts as early as September, and amidst heightened geopolitical tensions in the Middle East, it fell to a daily low of 4.2554% at 03:59 (just one minute before the U.S. stock market closed), with a cumulative drop of 48.36 basis points in July.

The U.S. 10-year benchmark Treasury yield fell by 10 basis points, hitting a daily low of 4.0392%, with a cumulative decline of 35.31 basis points in July.

The eurozone's benchmark 10-year German bund yield fell by 3.6 basis points to its lowest since March, at 2.304%, with a cumulative drop of 19.7 basis points in July. The two-year German bund yield fell by 2.1 basis points, at 2.531%, with a cumulative drop of 30.2 basis points in July.

The French 10-year government bond yield fell by 4.1 basis points, with a cumulative drop of 28.5 basis points in July. The Italian 10-year government bond yield fell by 4.6 basis points, with a cumulative drop of 42.2 basis points in July. The Spanish 10-year government bond yield fell by 4.5 basis points, with a cumulative drop of 30.3 basis points in July. The Greek 10-year government bond yield fell by 5.1 basis points, with a cumulative drop of 43.1 basis points in July. The UK 10-year government bond yield fell by 7.3 basis points, with a cumulative drop of 20.2 basis points in July. The two-year UK gilt yield fell by 5.1 basis points, with a cumulative drop of 39.5 basis points in July.

Geopolitical tensions in the Middle East are once again on the rise, with oil prices surging by more than 4%, and Brent crude oil once again standing above $80 per barrel, but with a cumulative drop in July.

WTI September crude oil futures closed up $3.18, a gain of nearly 4.26%, at $77.91 per barrel, erasing all losses since last Friday. The cumulative drop in July exceeded 4.45%. Brent October crude oil futures closed up $2.65, a gain of over 3.39%, at $80.72 per barrel, erasing this week's losses, with a cumulative drop of 6.58% in July.

U.S. and Brent crude oil continued to rise throughout the day, with U.S. crude oil surging by more than 5.1% to approach the $79 level, and Brent October futures once breaking through the $81 level.

Data from the U.S. Energy Information Administration (EIA) shows favorable demand, with U.S. EIA crude oil inventories decreasing by 3.44 million barrels last week, and gasoline inventories falling by 3.7 million barrels, both exceeding expectations. U.S. EIA crude oil inventories have fallen for five consecutive weeks, reaching a new low since February.

In terms of investment research strategy:Some analysts have pointed out that there is a "misjudgment" in the market's assessment of Middle East geopolitical risks. The market has been overly optimistic about the potential oil supply disruptions caused by the Russia-Ukraine war and the 10-month conflict in the Gaza Strip. Currently, we are entering a new phase of worsening Middle East situations, which will attract the attention of oil traders and prompt them to re-incorporate a substantial risk premium into Brent crude oil prices, initially estimated at a minimum of $5 per barrel, even before potential physical supply disruptions occur.

However, some analysts are reserved about whether the current tensions can support oil prices in the long term, stating that since the assassination took place within Iran, it not only increases geopolitical risks but also the possibility of oil supply disruptions, which is the reason for the rise in oil prices. Nevertheless, unless the situation further deteriorates and clearly threatens the region's oil production, this support for oil prices will not be sustainable.

U.S. natural gas futures for August fell by more than 4.2%, trading at $2.0360 per million British thermal units, with a cumulative decline of over 21.72% in July. However, European natural gas prices continued to rise, with the European benchmark TTF Dutch natural gas futures up by 2.23%, trading at €35.868 per megawatt-hour. ICE UK natural gas futures were up by 2.21%, trading at 80.760 pence per therm.

The U.S. Dollar Index fell by 0.4% on the Fed's decision day, with a 1.7% drop in July, while the Japanese yen broke through the 150 mark, rising by about 6.8% in July, and the Chinese yuan surged by 730 points in July.

The U.S. Dollar Index, which measures the value of the dollar against a basket of six major currencies (DXY), fell by 0.41% to 104.040 points, with a cumulative decline of 1.76% in July, during which the trading range was between 106.126 and 103.650 points. The index fell below 104 during the session for the first time since July 18th.

The Bloomberg Dollar Index fell by 0.56%, trading at 1253.77 points, with a cumulative decline of 1.24% in July, during which the trading range was between 1273.84 and 1246.65 points.

Most non-U.S. currencies rose. The euro rose by 0.12% against the dollar, with a cumulative increase of 1.06% in July, while the British pound rose by 0.18% against the dollar, with a cumulative increase of 1.65% in July. The U.S. dollar fell by 0.92% against the Swiss franc, with a cumulative decline of 2.30% in July.

The offshore Chinese yuan (CNH) rose by 168 points against the U.S. dollar, trading at 7.2270 yuan, with the session's overall trading range between 7.2529 and 7.2133 yuan, and a cumulative increase of about 730 points in July.

The Japanese yen rose by 2% against the U.S. dollar, breaking through the 150 mark for the first time since March, reaching a high of 149.61. It rose by 6.8% in July, marking the best monthly performance since November 2022, with a trading range of 161.95 to 149.61 yen in July.

The euro continued to fall against the Japanese yen, closing down by 1.76% at the lowest level since March, trading at 162.32 yen. It fell by 5.84% in July; the British pound fell by 1.69% against the Japanese yen, trading at 192.755 yen, with a cumulative decline of 5.28% in July.The Middle East geopolitical conflict escalates, causing a significant drop in Israeli assets. The Israeli Shekel fell 1.2% against the US dollar at one point, with a cumulative decline of 3.3% over three days, heading towards the largest three-day drop since the beginning of 2022. The yield on Israeli 10-year government bonds rose by 6 basis points to 4.99%, with its dollar-denominated bond prices suffering the largest decline in the emerging markets.

Major cryptocurrencies mostly declined. The largest by market capitalization, Bitcoin, fell 1.97% to $65,075.00, with a cumulative increase of 6.84% in July, trading in the range of $54,215.00 to $70,825.00. Spot Bitcoin was reported at $64,914.62, down 1.92% for the day, with a cumulative increase of about 4.90% in July, trading in the range of $53,602.00 to $69,998.25. The second-largest, Ethereum, fell 1.59%, trading at $3,250.50, with a cumulative decline of 4.94% in July, trading in the range of $3,590.50 to $2,862.50.

The rekindling of Middle East geopolitical conflicts has driven up safe-haven sentiment. With Powell signaling a potential rate cut, gold prices rose by more than 1.6%, marking the best monthly increase in four months.

The US dollar and Treasury yields softened together, supporting precious metal prices. The COMEX December gold futures closed up 1.69% at $2,493.40 per ounce, while the COMEX September silver futures closed up 2.07% at $29.115 per ounce.

Spot gold and silver maintained their upward momentum throughout the day. Before the US stock market opened, gold and silver quickly rose as Hamas leader Haniya was assassinated, escalating the Middle East geopolitical conflict and increasing safe-haven sentiment. Before the release of the Federal Reserve's policy statement, spot gold rose 0.7%, approaching $2,430, and spot silver rose by more than 0.8%. After the release of the Fed's decision, both accelerated their upward trend and hit new daily highs, with spot gold rising by more than 1.6% to over $2,450 per ounce, and spot silver rising by nearly 2.3%, breaking through $29 per ounce.

Spot gold accumulated a 5.20% increase in July, the largest monthly gain since March, when it had accumulated a 9% increase. Spot silver accumulated a decline of about 0.30% in July and fell for two consecutive months, mainly due to market concerns about the demand for industrial silver.

Bob Haberkorn, a senior analyst at RJO Futures, stated that if the Federal Reserve clearly introduces more specific rate cut measures, gold prices could climb above $2,500. Conversely, if the rate cut expectations remain unresolved, a slight pullback in gold prices is expected. However, given the current geopolitical tensions and economic issues causing concerns, gold prices are expected to bottom out around $2,400, forming a solid support level.

London's base metals reversed their consecutive decline and surged across the board on Wednesday. The economic bellwether "Dr. Copper" rose by nearly 2.82%, reporting $9,225 per ton, regaining the $9,000 mark. London aluminum rose by nearly 2.97%, reporting $2,290 per ton. London zinc rose by nearly 1.79%, reporting $2,676 per ton. London lead rose by nearly 2.41%, reporting $2,084 per ton. London nickel rose by about 3.32%, reporting $16,604 per ton. London tin rose by nearly 4.44%, reporting $30,056 per ton.

Additionally, Chicago corn futures fell by more than 1%, at one point dropping below $4 per bushel for the first time since 2020. In July, US wheat futures fell by more than 8%, and soybeans fell by more than 10%. Most domestic futures in China's night market moved higher, with iron ore closing up nearly 2.7%, and soda ash and caustic soda rising by more than 2%.