Popular Chinese ADRs Tumble, Global Oil Prices Plunge: What's Happening?

On October 8th local time, the three major U.S. stock indices opened high and continued to rise, with technology stocks showing strength across the board. Chinese concept stocks experienced adjustments, with the Nasdaq Golden Dragon China Index falling by 6.85%.

Global commodity markets saw a decline across the board, with oil prices that had surged the previous day suddenly plummeting, and gold falling by nearly 1%.

Large technology stocks rose across the board.

The three major U.S. stock indices closed higher on Tuesday. The Dow Jones Industrial Average rose by 126.13 points to 42,080.37, a gain of 0.30%; the Nasdaq Composite rose by 259.02 points to 18,182.92, a gain of 1.45%; the S&P 500 Index rose by 55.19 points to 5,751.13, a gain of 0.97%.

Large technology stocks rose across the board. Nvidia increased by more than 4%, while Apple, Microsoft, Amazon, Meta, and Tesla all rose by more than 1%. Alphabet Inc. Class A rose by nearly 1%, and Netflix rose by more than 2%.

Bank stocks fluctuated. Citigroup rose by more than 1%, while Goldman Sachs Group and Wells Fargo saw minor increases. JPMorgan Chase, Morgan Stanley, and Bank of America all experienced minor declines.

Energy stocks fell across the board. ConocoPhillips and Schlumberger fell by more than 3%, ExxonMobil and Occidental Petroleum fell by more than 2%, and Chevron fell by more than 1%.

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Most chip stocks rose. Intel increased by more than 4%, Broadcom by more than 3%, Microchip Technology and Advanced Micro Devices by more than 1%. ASML and TSMC saw minor increases, while Micron Technology and Qualcomm experienced minor declines.Goldman Sachs has raised its year-end target for the S&P 500 index to 6,300 points, and also increased its 12-month target to 6,300 points, adding that these targets might be "too low."

Chinese concept stocks pull back

After a series of strong gains, on October 8th local time, popular Chinese concept stocks experienced a comprehensive adjustment, with the NASDAQ Golden Dragon China Index falling by 6.85%, marking the largest single-day drop since October 2022. Jinko Energy plummeted by over 20%, Daqo New Energy fell by about 20%, EHang Intelligent, and Dada Group dropped by more than 16%, Tiger Brokers fell by approximately 16%, Kingsoft Cloud, Gaotu Group, and Lufax Holdings fell by over 14%, Bilibili and Weibo dropped by more than 12%, Canadian Solar and Ctrip Group fell by about 10%, Ke Holdings, Li Auto, and NIO fell by about 8%, and JD.com, Baidu, and XPeng Motors fell by more than 7%.

The FTSE China 3x Leveraged Long ETF fell by over 30%, giving back some of the gains from early October. On the other hand, the night session of the FTSE China A50 Index futures rose, closing up by 2.69% at 14,550 points.

Some analysts believe that during the National Day holiday, the stock gains of Hong Kong and Chinese concept stocks were too large, accumulating a substantial amount of profit-taking, with some funds cashing in on profits, leading to a sharp increase in market volatility.

Foreign institutions remain bullish on Chinese assets. Goldman Sachs believes that fiscal policy has a more significant impact on China's stock market than monetary policy; with more fiscal stimulus measures likely to be introduced, it is expected that China's stock market will see more positive changes.

International oil prices plungeOn October 8th local time, the commodity market experienced a broad decline. Spot gold fell by 0.79%, trading at $2,621.68 per ounce; spot silver dropped by over 3%, trading at $30.658 per ounce; base metals such as copper, zinc, aluminum, nickel, and tin also saw a decline across the board.

International oil prices plummeted after several days of consecutive increases. As of the close on the 8th, the price of light crude oil futures for delivery in November at the New York Mercantile Exchange fell by $3.57, closing at $73.57 per barrel, a decrease of 4.63%; the price of Brent crude oil futures for delivery in December in London fell by $3.75, closing at $77.18 per barrel, also a decrease of 4.63%.

Some analysts have stated that the significant drop in oil prices was due to a short-term surge caused by increased geopolitical risks in the Middle East, but there has been no actual disruption in crude oil supply in the region.

On the same day, the U.S. Energy Information Administration (EIA) released its Short-Term Energy Outlook report, stating that global and U.S. oil demand growth in 2025 will be lower than previously estimated. The EIA predicted that global oil demand in 2025 is expected to increase by 1.2 million barrels per day, reaching 104.3 million barrels per day, which is about 300,000 barrels per day lower than the previous estimate. The EIA also stated that this year's oil demand will be around 103.1 million barrels per day, a reduction of 20,000 barrels per day compared to the previous estimate.