U.S. Giants Lose 4 Trillion Yuan!

In this week’s financial landscape, the U.S. stock market exhibited a notable decline, with the S&P 500 index dropping by 1% and the Nasdaq composite experiencing a more pronounced fall of 1.64%. The technology sector, particularly the AI frontrunner Nvidia, suffered significantly, plummeting over 15%. This marks Nvidia’s steepest weekly decline since early September 2022, resulting in a staggering market capitalization loss of $552.5 billion, approximately equivalent to 400.47 billion yuan.

Meanwhile, the commodities market saw a rise amidst growing risk aversion, pushing the spot price of gold in London to breach the $2800 per ounce barrier for the first time, hitting a historic highThe price of gold has seen a cumulative increase of over 6% in January, marking the most substantial monthly rise since April 2024, reinforcing a strong performance this year.

The collective impact on the seven tech giants in the U.S. was significant, with their index dropping more than 2% over the weekThe sell-off became evident on Monday with the unexpected emergence of DeepSeek, which sent shockwaves throughout Silicon Valley, leading to substantial selling pressure on major AI stocks led by NvidiaThe market faced another setback on Friday due to news surrounding tariffs from former President Donald TrumpFor the week, while the Dow Jones industrial average managed a modest gain of 0.27%, the S&P 500 and Nasdaq both recorded substantial losses.

On January 31, after the close of the financial markets, the trading period for January 2025 came to a closeOverall, the first month of the year saw the three major U.S. stock indices report gains, with the Dow rising by 4.70%, its largest January increase since 2019. The S&P 500 advanced by 2.7%, and the Nasdaq rose by 1.64%, marking a consecutive three-month gain.

Technology stocks have captured significant attention from investors recentlyAcross the board, the index tracking the seven tech giants fell by 2.38% this week, predominantly due to Nvidia's 15% drop, which is the largest weekly decline since the beginning of September 2022, resulting in a total evaporation of $552.5 billion in market capitalization

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Key players in this space, such as Microsoft, also saw a decline of over 6%, resulting in a market cap loss exceeding $215 billion, although its total valuation still remains above $3 trillionConversely, stocks like Meta jumped by over 6%, and Apple rose by 5.93%, maintaining its leading total market capitalization of approximately $3.55 trillionGoogle (Alphabet) and Amazon also made modest gains, rising by more than 1% each.

Goldman Sachs has indicated a shift in focus towards AI inference and post-training processes, suggesting that the requirement for computational resources during inference will be less than that required for pre-training, marking a key area of growth moving forward.

In the currency markets, the dollar index saw a rise of 0.96% this week, achieving its best weekly performance since mid-November 2024. This bounce in the dollar was reflected across commodities, where international crude oil prices saw a slight decline, with WTI crude dropping by 1.14% and Brent crude by 1.35%, settling at $73.81 and $76.60 per barrel, respectively.

For the precious metals sector, gold prices experienced a collective ascent this weekSpot gold prices in London surged past the $2800 per ounce marker, reaching a peak of $2817.21 and COMEX gold futures hitting a high of $2862.90 per ounce, both establishing new recordsThe surge in gold prices can largely be attributed to growing risk aversion, heightened by the unpredictable political and economic landscape characterized by trade tensions and geopolitical conflicts, which have driven investors towards safe-haven assets like goldHowever, as the markets begin to absorb the impacts of new tariffs and the dollar strengthens, gold prices faced some pressure this week, resulting in a cumulative rise of 1.02% in London and 1.89% in COMEX for the week, marking their fifth consecutive weekly increaseIn January 2025, both the spot and futures gold prices rose by 6.63% and 7.21%, respectively, recording their largest monthly gains since April 2024.

Looking forward to 2025, analysts believe that gold still retains its allure as an investment