Dow Jones drops nearly 600 points late at night, tech stocks plummet, US-Iran nuclear negotiations restart, over 430,000 cryptocurrency traders get liquidated

On Thursday Eastern Time, the U.S. stock market’s three major indices all fell more than 1%, with the Dow down nearly 600 points, the Nasdaq dropping over 360 points, and tech stocks broadly declining. Chinese concept stocks defied the trend and rose; international gold and silver prices hit daily lows, with spot silver plunging nearly 20%; international oil prices also declined collectively; Bitcoin fell to $64,000.

Tech stocks mostly declined, with Oracle down over 7%, Microsoft nearly 5% lower, Amazon down over 4%, Tesla dropping more than 2%, and Nvidia down over 1%.

After hours, Amazon’s decline widened to 10%, following its latest earnings report showing a net profit of $21.19 billion in Q4, a 6% year-over-year increase.

Chip stocks showed mixed performance, with ARM up over 5%, Applied Materials up more than 2%, Canaan Semiconductor up over 1%, and Lam Research up over 1%. Qualcomm fell over 8%, Western Digital and Wuxi Semiconductor dropped more than 3%. On the news front, chip giants Qualcomm and Arm issued warnings that chip shortages could squeeze smartphone production capacity.

Most popular Chinese concept stocks rose, with the Nasdaq Golden Dragon China Index up 0.9%. NIO led the gains, rising over 6%, after announcing it expects to record its first quarterly adjusted operating profit. Yum China, WeRide, and Vipshop each rose over 3%, while Xiaomi, Li Auto, and Meituan gained over 2%.

On the downside, Chinese new energy stocks performed poorly, with Yipeng Energy down over 18%, and Ares Solar down over 8%. Dingdong Maicai fell over 14% after pre-market news that Meituan plans to acquire Dingdong for $717 million. Bawang Tea and Ji, Alibaba, and New Oriental declined by over 1-5%.

Precious metals, cryptocurrencies, and weight-loss drug concepts led declines, with Coinbase down over 13%, Robinhood over 9%, Pan American Silver, Novo Nordisk, and Circle down over 8%, and U.S. Gold Corp and Eli Lilly down over 7%.

Silver plunges nearly 20%

Bitcoin drops to $64,000

In commodities, on February 5, gold and silver prices hit daily lows, Bitcoin fluctuated downward to $64,000, and international oil prices declined collectively.

Specifically, spot silver tumbled nearly 20%, to $70.69 per ounce. Spot gold closed below $4,800, dropping nearly 4% intraday.

On the same day, CME raised the initial margin requirement for COMEX 100 gold futures from 8% to 9%, and for COMEX 5000 silver futures from 15% to 18%. The new standards will take effect after market close on February 6.

According to 21st Century Business Herald, analysts believe that domestic investors did not panic-sell gold but rather engaged in short-term emotional adjustments. Several industry insiders pointed out that the long-term logic for gold allocation remains unchanged, but short-term trading should focus on avoiding volatility and buying on dips, avoiding blindly chasing gains or selling in panic.

UBS provided scenario-based forecasts: a bullish target price of $7,200 per ounce and a bearish target of $4,600. The firm believes that if the Fed shifts to a hawkish stance, downside risks could intensify, while escalating geopolitical tensions might drive gold prices higher. (Details)

The cryptocurrency market’s sell-off continues to accelerate. As of around 6:30 Beijing time, Bitcoin plummeted 12% to $64,000, hitting a 16-month low, down over 32% in the past 30 days. In the last 24 hours, 432,000 traders were liquidated globally, with total liquidation amounting to $2.067 billion.

Some market observers believe that breaking below $70,000 could trigger larger-scale sell-offs in the short term, possibly falling back to the lows seen after the initial rebound in early 2024.

International oil prices declined collectively, with NYMEX WTI crude and ICE Brent crude both down over 3%. According to CCTV News, the U.S. and Iran will hold nuclear talks in Oman. Despite some setbacks, negotiations are moving forward. However, U.S. military threats against Iran persist, and Iran’s stance remains firm. On the 4th, U.S. President Trump again threatened that if Iran attempts to restart its nuclear program, the U.S. military will launch another attack. The U.S. Navy also released a video showing fighter jets taking off and landing on the USS Lincoln aircraft carrier and the carrier receiving supplies.

Additionally, according to Caixin, CME’s “Federal Reserve Watch” shows a 22.7% chance of a 25 basis point rate cut by March, and a 77.3% chance of no change. The probability of a cumulative 25 basis point rate cut by April is 36.2%, with an 58.1% chance of no change, and a 5.6% chance of a 50 basis point cut. By June, the chance of a 25 basis point cut increases to 50.2%.

Goldman Sachs’s latest report expects new Fed Chair Waller to push for two rate cuts this year, rather than the market’s concern about rate hikes. Waller is unlikely to significantly reduce the Fed’s balance sheet, as there is broad support for the “ample reserve” framework internally.

Regarding the U.S. stock market, Wolf Research Chief Investment Strategist Chris Sinek warned that the market is experiencing intense volatility: on one hand, investors worry about U.S. corporate capital expenditure on AI; on the other, they are weighing hopes that the resilience of the U.S. economy could lead to broader market gains beyond a few sectors.