US Stocks Fall Across the Board, Tesla and Crypto-Related Shares Decline, Chinese ADRs Plunge

US Stocks Fall Across the Board, Tesla and Crypto-Related Shares Decline, Chinese ADRs PlungeUS stocks closed lower on Tuesday, with all three major indexes in the red. The Dow Jones Industrial Average dropped 0

US Stocks Fall Across the Board, Tesla and Crypto-Related Shares Decline, Chinese ADRs Plunge

US stocks closed lower on Tuesday, with all three major indexes in the red. The Dow Jones Industrial Average dropped 0.86%, the S&P 500 index declined 0.29%, and the Nasdaq Composite closed down 0.09%. The Trump trade cooled, leading to a pullback in Tesla and cryptocurrency-related stocks. Popular Chinese ADRs experienced a widespread decline, with the Nasdaq Golden Dragon China Index closing down 4.45%. Xpeng Motors fell over 10%, Nio dropped over 9%, JD.com, Bilibili, and Li Auto all plunged over 7%, iQiyi tumbled over 4%, Baidu lost nearly 4%, Alibaba and New Oriental dipped over 3%.

European stock markets also performed poorly. The German DAX30 Index fell 2.13%, the UK FTSE 100 Index declined 1.22%, the French CAC40 Index dropped 2.69%, and the Euro Stoxx 50 Index closed down 2.25%.

In the commodity market, international crude oil futures settled slightly higher. WTI December crude futures rose $0.08, or 0.12%, to close at $68.12 a barrel. Brent January crude futures added $0.05, or 0.07%, to settle at $71.89 a barrel. COMEX gold futures fell 0.53% to $2,604 an ounce, and COMEX silver futures rose 0.73% to $30.83 an ounce.

Bitcoin briefly touched $90,000 on Tuesday, setting a new all-time high. Many investors anticipate that the price will continue to hit new records, reaching $100,000 later this year.

Several significant events occurred on Tuesday:

• Houthi rebels in Yemen claim an attack on the USS Abraham Lincoln. On Tuesday evening local time, Yahya Saree, a military spokesman for the Houthi rebels, said they had attacked the USS Abraham Lincoln aircraft carrier with missiles and drones, successfully thwarting a US air raid against Yemen. Additionally, the Houthis claimed to have targeted two other US destroyers in the Red Sea. The US has not yet responded to these claims.

• US prosecutors seek to seize FTX founder SBF's crypto assets. According to media reports, FTX founder SBF was convicted of fraud a year ago. In a document filed in New York court on Tuesday, US prosecutors filed a lawsuit seeking to seize SBF's cryptocurrency assets. These assets are held in an account and include tokens like Solana and Ripple, valued at $8.6 million as of December 12, 2023. They have appreciated to $18.5 million over the past eleven months, primarily due to the significant rise in the price of Solana.

• Waymo opens its driverless taxi service to all users in Los Angeles. On Tuesday, Waymo, the self-driving taxi (Robotaxi) company owned by Alphabet, announced that its WaymoOne taxi service is now available to all users in Los Angeles. This marks the company's largest expansion to date and signifies rapid growth for this sector. The company stated that since they began offering driverless taxi services to the public in Los Angeles in March, nearly 300,000 people have joined its reservation list, demonstrating strong demand for the service.

• Apple is set to launch AI-powered smart home devices as early as March. According to sources, Apple is expected to release AI-powered smart home devices as early as March. These devices will feature FaceTime, Siri, and Apple Intelligence capabilities. They will integrate with cameras, doorbells, and run a range of Apple applications. The company hopes to compete with Amazon and Google in the smart home market.

• Star fund manager poached by Millennium at a huge cost leaves the firm less than a year later. John Curtice, one of Millennium Management's most expensive recent hires, has left the firm. He had been with Izzy Englander's hedge fund company for less than a year. Curtice joined earlier this year from Millennium's rival ExodusPoint Capital Management. According to sources, Curtice's risk limits exceeded Millennium's guidelines, leading to multiple discussions between the two parties. As Curtice's performance declined from its peak, Millennium recently reduced his trading capital from $2 billion to $1.5 billion. Sources added that Curtice has experienced low single-digit net losses since joining the firm, although his trades haven't reached the level to trigger stop losses.

• Wall Street year-end bonuses are expected to rise for the first time in 3 years, debt sales are a big winner. Compensation consulting firm Johnson Associates released a recent report indicating that bonuses on Wall Street are expected to increase across the board this year, marking the first overall increase since 2021. This anticipated growth extends to investment bankers, traders, and professionals in asset management and wealth management, with their year-end bonuses expected to see double-digit increases. Bankers who helped companies sell debt are projected to receive particularly large bonuses, potentially up to 35%, as increased trading activity and a rebound in capital markets fuel these gains.

• Head of Saudi NEOM project suddenly resigns. On Tuesday, the CEO of NEOM, the new city being built in Saudi Arabia, suddenly announced his resignation, causing significant upheaval in the world's largest construction project. No reason was given, sparking widespread attention. Rumors circulated that Nadhmi Al-Nasr, who had served as CEO of NEOM since 2018, had recently stepped down, but the specific reason for his departure remained unknown. On Tuesday, NEOM officials released a statement confirming Al-Nasr's resignation and announcing the appointment of Aiman Al-Mudaifer as acting CEO. Al-Mudaifer previously served as head of the investment division at Saudi Arabia's Public Investment Fund (PIF). He is also a board member of several prominent Saudi companies. (Cailian Press, Niu Zhanlin)

Overall, Tuesday's market performance was influenced by multiple factors. In addition to cooling "Trump trade" sentiment, volatility in the cryptocurrency market, expectations of Fed rate hikes, and geopolitical tensions all contributed to market sentiment. Investors need to closely monitor future market trends and manage risk accordingly.