On January 24, 2025, the U.S. stock markets experienced a downturn, marking a day of losses for major indicesThe Dow Jones Industrial Average closed down by 140.82 points, representing a decline of 0.32%, finishing at 44,424.25 pointsSimilarly, the Nasdaq composite index fell 99.38 points, which is a 0.50% decrease, settling at 19,954.30 pointsThe S&P 500 also faced a dip, down 17.47 points or 0.29%, to finish at 6,101.24 pointsDespite this overall decline, the S&P 500 did momentarily reach an all-time high during intraday trading, revealing the volatility and potential of the current market environment.

In the technology sector, which is often regarded as a driving force behind the market's performance, most of the "big seven" tech stocks were in the redNotably, NVIDIA saw a sharper drop, losing over 3% and shedding around $112.65 billion in market capitalization in a single day—equivalent to approximately 81.52 billion yuanTesla followed with a decline of more than 1%, while Microsoft, Apple, and Amazon reported slight downturns of 0.59%, 0.39%, and 0.24%, respectivelyHowever, not all tech stocks fared poorly; both Google and Meta (formerly Facebook) turned positive, gaining more than 1%.

The semiconductor sector, which has been pivotal in the tech industry's growth, also faced challenges, with the Philadelphia Semiconductor Index plummeting by 1.89%. Major semiconductor companies experienced significant losses, with Texas Instruments declining over 7%, Microchip Technology dropping more than 5%, and Intel down over 3%. Conversely, Broadcom managed to increase by more than 1%, showcasing the mixed signals within the industry.

The energy sector did not escape this trend, with many major oil companies such as ConocoPhillips and Occidental Petroleum each falling over 2%. ExxonMobil slid more than 1%, while Chevron decreased by a marginal 0.2%. One notable exception was Schlumberger, which managed to post a slight increase of 0.52%, highlighting how even within struggling sectors, opportunities for growth exist.

On a more optimistic note, Chinese assets witnessed a significant rally in the global market, particularly driven by a positive performance in the NASDAQ Golden Dragon China Index, which surged by 3.71%. Several popular Chinese stocks saw substantial gains; for instance, Gaotu Techedu increased roughly 15%, while Kingsoft Cloud rose by over 13%. iQIYI, China's equivalent of Netflix, experienced a surge exceeding 11%. Meanwhile, firms like Pinduoduo and JD.com also rose more than 7%, demonstrating strong investor sentiment towards Chinese equities.

In the currency markets, the offshore yuan peaked, breaking through the 7.24 mark and achieving its highest level in nearly two months

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The currency reinforced a robust week, closing with a rise of 435 basis points to settle at 7.2443 yuan per dollar, marking a total increase of 967 basis points for the weekThis uptick is reflective of growing foreign investor confidence in China’s economic recovery.

Supporting this bullish sentiment, Goldman Sachs projected in its recent research that the MSCI China Index, as well as the CSI 300 Index, is anticipated to rise by approximately 20% by the end of 2025. Their analysis points to a favorable risk-return profile, suggesting that investors maintain an overweight position in A-shares and offshore Chinese stocksPreviously, the bank had forecasted a rise of 15% and 13% for these indices in their 2025 market outlook report.

JPMorgan Chase's recent report echoed optimistic projections, noting that as U.S. presidential policies towards China become clearer and responses from the Chinese government materialize, a turnaround in the Chinese stock market may occur around late January 2025.

UBS Securities' China stock strategy analyst, Meng Lei, commented on the broader market landscape, acknowledging that despite some fluctuations at the start of 2025, the fundamental improvements remain intactHe noted a clear expectation of enhanced corporate profitability, with projections suggesting that the earnings growth rate for the CSI 300 could reach around 6%.

Nicolai Tangen, head of Norway's sovereign wealth fund, suggested in a recent statement that investors looking to navigate these turbulent waters should consider selling U.S. tech stocks and private credit while increasing exposure to Chinese assets, hinting at a strategic reshuffling amid shifting market dynamics.

Turning back to the commodities market, gold prices soared, nearing historical highs largely attributed to a declining U.S. dollar index, which fell by 0.62% during the trading dayThe dollar dipped to a low of 107.21, marking the lowest level since December 19, 2024. U.S. gold futures advanced by 0.45%, closing at $2,777.4 per ounce, while spot gold achieved a peak of $2,785.98 before closing at $2,770, a mere breath away from the historical high of $2,790.07 set back in October 2024. Silver futures also saw an increase, closing at $31.04, signaling a strong day for precious metals.

International oil prices fluctuated slightly, with WTI crude futures decreasing by 0.03% to settle at $74.60 per barrel, and Brent crude dipping by 0.15% to $77.44 per barrel

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