Overnight US stocks | The three major indices fell, Apple (AAPL.US) bucked the market and rose, and the Philadelphia Semiconductor Index fell more than 11% this week

The Zhitong Finance App learned that on Friday, the three major indices fell and oil prices rose. Federal Reserve Chairman Walsh expressed optimism about the strong performance of the US economy. At the same time, he said that despite recent geopolitical shocks and countries tightening monetary policies to contain inflation, he was still surprised by the resilience shown by the global economy. Walsh stressed that the Federal Reserve is clearly committed to achieving price stability, is not in favor of predicting the outcome of the interest rate meeting in advance, and does not advocate pre-disclosing policy actions that may be taken during the remaining 2026 meetings.

This week, the NASDAQ dropped more than 4%, the worst weekly performance since the tariff turmoil in April 2025. The Philadelphia Semiconductor Index fell 11.4% this week, setting a record for the longest continuous decline since the 2008 financial crisis. This is also the fifth time this year that the index has recovered by at least 10%, evaporating the market value of about 2 trillion US dollars.

[US Stocks] At the close, the Dow Jones Index fell 175.99 points, or 0.34%, to 52001.70 points; the S&P 500 index fell 84.64 points, or 1.09%, to 7659.42 points; the Nasdaq Composite Index fell 572.99 points, or 2.14%, to 26140.03 points. Apple (AAPL.US) rose 0.43% against the market, Coreweave (CRWV.US) fell 11.91%, SK Hynix (SKHY.US) fell 6.58%, Arm (ARM.US) fell 6.94%, Sandisk (SNDK.US) fell 6.85%, ORCL.US (ORCL.US) fell 4.64%, and Tesla (TSLA.US) fell 2.13%. The Nasdaq China Golden Dragon Index fell 1.3%, Baidu (BIDU.US) fell 2.93%, and Alibaba (BABA.US) fell 1.83%.

[European stocks] The German DAX30 index rose 241.93 points, or 0.95%, to 25624.55 points; the UK FTSE 100 index rose 37.62 points, or 0.35%, to 10877.97 points; the French CAC40 index rose 22.00 points, or 0.28%, to 7956.70 points; the European Stoxx 50 index rose 35.29 points, or 0.57%, to 6203.55 points; Spain's IBEX35 index rose 137.29 points, or 0.72%, 19314.99 points; Italy's FTSE MIB index rose 453.95 points, or 0.92%, to 49851.50 points.

[Foreign Exchange] The US dollar index, which measures the US dollar against the six major currencies, fell 0.21% on the same day and closed at 101.837 at the end of the foreign exchange market. As of the end of the exchange market in New York, 1 euro was worth $1.1233, up from $1.1212 on the previous trading day; 1 pound was worth $1.3319, up from $1.3272 on the previous trading day. 1 US dollar was worth 158.05 yen, lower than 158.14 yen on the previous trading day; 1 US dollar was worth 0.8242 Swiss franc, lower than 0.8271 Swiss franc on the previous trading day; 1 US dollar was worth 1.4153 Canadian dollars, lower than 1.4190 Canadian dollars on the previous trading day; and 1 US dollar was worth 9.9192 Swedish kroner, lower than 9.9597 on the previous trading day.

[Cryptocurrency] Bitcoin rose 0.82% to $81,681 as of the press release. Ethereum fell 1.3% to $2,421.

[Precious Metals] Spot gold fell 0.1 to 4165.94 US dollars/ounce; spot silver fell 0.77% to 56.986 US dollars/ounce.

[Crude oil] Light crude oil futures for November delivery on the New York Mercantile Exchange rose $3.44, or 3.51%, to close at $101.41 a barrel; London Brent crude oil futures for December delivery rose $3.94, or 3.72%, to close at $109.86 a barrel.

[Macro News]

The US fiscal deficit for the 2026 fiscal year reached 1.99 trillion US dollars, a five-year high. According to data released by the US Treasury on October 16, in the 2026 fiscal year ending September 30, the US fiscal deficit increased by 217 billion US dollars year-on-year to 1.99 trillion US dollars, the highest level since FY2021, and the third largest annual fiscal deficit in history. In fiscal year 2026, US fiscal revenue reached a record $5.40 trillion, up 3% year on year; fiscal spending reached a record $7.40 trillion, up 6% year over year. Among them, debt repayment expenses increased 12% year over year to a record $1.36 trillion. Furthermore, the US Supreme Court previously ruled against most of the tariffs imposed by the Trump administration, which led to the return of tariffs of 145 billion US dollars in fiscal year 2026. Net tariff revenue fell 11% year over year to about 173 billion US dollars. The US Treasury Department estimates that the fiscal deficit for fiscal year 2026 was 6.2% of GDP, up from 5.8% in the previous fiscal year. The fiscal deficit in September was 27 billion US dollars in a single month, compared to a surplus of 19.8 billion US dollars in the same period last year.

Trump: Oil prices will drop soon, hopefully the Russian-Ukrainian conflict will end. US President Trump delivered his latest speech on the Russian-Ukrainian and Middle East issues: “I know some details of the Russian-Ukrainian conflict. I will announce them at some point, and I hope it ends. The Biden administration has done a lot of terrible things on the Ukraine issue.” When asked about inflation, Trump once again claimed: “Oil prices will drop soon. Israel has helped Saudi Arabia very much, and the Abraham Accords are once again a topic of discussion for Saudi Arabia.”

The US Treasury did not release a signal to reduce the scale of issuance of long-term treasury bonds. US bond yields are rising. According to reports, the US Treasury has not clearly hinted that it will reduce the scale of long-term treasury bond auctions and push long-term US bond yields to rise slightly. Before the quarterly refinancing announcement was issued on November 4, the US Treasury Department sought opinions from treasury bond traders on how to adjust the treasury bond auction scale in view of future borrowing needs and investor needs. However, the Ministry of Finance did not release further clear signals that it may reduce the scale of issuing long-term treasury bonds in the near future. Previously, some investors expected that given the Trump administration's desire to reduce US bond yields, the Treasury might consider reducing the supply of long-term treasury bonds.

Huang Renxun: AI will bring about changes, and the current market turmoil will eventually pass. Nvidia (NVDA.US) CEO Hwang In-hoon said at an event in Berlin that the current turmoil in the AI market will eventually pass. The reason is simple: AI will bring about changes and have a very positive impact on every industry and every country. There is no doubt that the development of AI will continue to advance, and we are still in the early stages of this process. Huang Renxun said that recent market news has changed repeatedly, but this will not change the fundamentals of the industry. Large-scale hardware investments will eventually pay off and ease market unease. Regarding the recent sell-off in AI chip and infrastructure stocks, investors are worried that AI investment spending will be difficult to sustain as borrowing costs rise. Huang Renxun is still optimistic about the AI market and its impact on the overall economy. Wong In-hoon said investors should focus on primary principles and fundamentals and maintain their focus on long-term value.

[Individual Stock News]

AWS Chief Financial Officer: AI spending is sustainable, and the payback period of server investment is less than three years. According to reports, John Felton (John Felton), chief financial officer of Amazon (AMZN.US) Cloud Services (AWS), said that AI infrastructure and service spending is sustainable because related investments are driving substantial innovation. Felton said that AWS' AI capital expenditure is paying off, and companies should view AI as a tool to improve productivity, not just a means to cut costs. Felton also said that as of the second quarter, the AWS order backlog was close to 500 billion US dollars, and customers included both large enterprises and AI laboratories, as well as small and medium-sized enterprises, so he was “relieved” about the company's capital expenditure schedule, and emphasized: “The demand is real.” He also said that the payback period for AWS's AI server investment is less than three years. Regarding whether AI investment can continue to generate returns, Felton said that AWS internal data shows a “roughly linear relationship” between word usage and productivity improvement. AWS has now received “significant return on investment and productivity gains,” and plans to further expand related investments.

Bank of America plans to issue up to four investment-grade bonds for a maximum period of 11 years. Bank of America (BAC.US) has begun issuing investment-grade bonds, becoming the third major Wall Street bank to finance in the volatile bond market after announcing third-quarter results this week. According to a source directly familiar with the matter, Bank of America is promoting up to four types of bonds with different maturities, ranging from 3 to 11 years. Among them, the initial pricing yield of the longest-term bond is about 1.2 percentage points higher than that of US Treasury bonds. This rare issuance of Friday bonds comes at a time when many companies have postponed issuing high-rated bonds in recent days. Affected by higher-than-expected inflation data and market concerns about artificial intelligence transactions, US Treasury yields fluctuated, prompting companies to suspend financing plans. Bank of America is the only bank among the six major Wall Street banks that did not enter the bond market for financing in the third quarter. It has raised only 17 billion US dollars so far this year, the fewest of the big six banks. The bank last issued bonds in April of this year, when it raised 10 billion US dollars.

Apple iPhone Duo quickly sold out after opening pre-orders. Some orders are expected to be delivered in December or even later. It's only a few minutes after Apple's (AAPL.US) folding screen phone, the iPhone Duo, opened pre-orders on Friday, and delivery is expected to be delayed until December or even later. The rapid extension of the delivery cycle indicates that strong demand and severely limited supply may make it difficult to buy this $1999 device on the day it officially goes on sale on October 23 and for some time thereafter. According to Apple's online store, the estimated delivery time for the iPhone Duo's two color schemes and all storage capacity versions has been delayed, covering all configurations from 256GB to 2TB. Some pre-order users said that even if they followed Apple's recommendations to pre-select colors and storage capacity in advance to speed up the purchase process, they eventually experienced delays in delivery dates. The iPhone Duo's stock at Apple retail stores also sold out almost instantly after opening pre-orders at 8 a.m. New York time. This is the first folding screen device introduced by Apple. In contrast, when Apple launched the iPhone 18 Pro and Pro Max in September, consumers who placed an order in a timely manner were basically able to buy it smoothly, but it is significantly more difficult to buy the iPhone Duo this time. Market research agency Counterpoint Research predicted last month that Apple will sell about 6 million iPhone Duos this year.

[Major Bank Ratings]

Wade Bush: Lowering Netflix's (NFLX.US) price target from $105 to $90

Wells Fargo: Lower Western Digital (WDC.US) price target from $730 to $450

STONEX: Raising Microsoft's (MSFT.US) price target from $525 to $600