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Chinese Stock Market Rollercoaster: Surge Followed by Swift Decline Amid Stimulus Uncertainty

  Chinese stocks experienced a dramatic rise and fall on Tuesday as markets reopened after a weeklong holiday. The initial surge was driven by pent-up demand and optimism surrounding Beijing’s economic policies. However, the rally quickly lost momentum when the National Development and Reform Commission (NDRC) failed to announce new stimulus measures, disappointing investors. The CSI 300 index, which tracks the largest companies listed in Shanghai and Shenzhen, opened nearly 11% higher but closed with a more modest gain of 5.9%. Similarly, the Shanghai Composite Index saw a significant rise before settling at a 5.5% increase. Investor sentiment was initially buoyed by expectations of aggressive fiscal support to counteract China’s economic challenges, including a property market slump and high youth unemployment. However, the lack of fresh stimulus announcements led to a swift sell-off, highlighting the market’s sensitivity to government policy signals. Despite the volatility, analysts
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Stocks Rise as Weak Economic Data Sink US Yields

                                        

Wall Street traders sent stocks higher and bond yields fell as a string of weaker-than-estimated economic reports reinforced the case for the Federal Reserve to start cutting rates this year. In a shortened session ahead of the US holiday, the S&P 500 headed toward a fresh all-time high.

In summary:

  • The S&P 500 rose to around 5,520.
  • Tesla Inc. extended its rally into a seventh straight session.
  • Amazon.com Inc. fell.
  • Treasury 10-year yields fell seven basis points to 4.36%.
  • Swap traders project almost two rate cuts in 2024, with the first in November.
  • The dollar headed toward its biggest drop since mid-May.

Investors are closely watching Friday’s employment data for further insight into the state of the labor market. Economists anticipate a 190,000 gain in nonfarm payrolls, with the unemployment rate holding at 4%.


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