On Wednesday, weak demand in Japan's bond auction combined with persistent concerns over U.S. fiscal policy halted the three-day rally in U.S. Treasuries, leading to another decline in Japanese bonds.
As Japan's bond auction sounded the alarm, Asian stock markets erased early gains, with the Hang Seng Index down 0.6% and the Nikkei 225 Index's gains retreating. S&amp;P 500 futures fell 0.1%, and Euro Stoxx 50 futures dropped 0.2%.
With Nvidia's earnings report imminent, the U.S. chip sector surged overnight, with Nvidia closing up over 3%. Today, global chip stocks rose, with Samsung Electronics up over 3% and Taiwan Semiconductor up over 2%.
Here are the main market trends:
<blockquote>
Stock Market: Asian stock markets erased early gains, S&amp;P 500 futures down 0.1%, Euro Stoxx 50 futures down 0.2%;
Bond Market: The yield on Japan's 30-year government bonds jumped 10 basis points to 2.93%, while the yield on U.S. 10-year Treasuries rose 3 basis points to 4.47%;
Currency Market: The U.S. dollar index rose 0.2%, and the euro fell 0.2% against the dollar;
Spot gold remained flat, cryptocurrencies generally fell, and rebar prices dropped to an eight-year low.
</blockquote>
Asian stock markets erased early gains, with Hong Kong's stock market leading the declines. The Nikkei 225 Index closed nearly unchanged at 37,722.4 points, having risen 0.5% at one point during the morning session. S&amp;P 500 futures fell 0.1%, the Hang Seng Index dropped 0.6%, and Euro Stoxx 50 futures fell 0.2%.
Japanese bonds plummeted, with demand for the 40-year government bond auction hitting its weakest level since July, triggering further volatility risks in the global bond market. Following the auction results, the yield on Japan's 30-year government bonds jumped 10 basis points to 2.93%. As the Bank of Japan reduces its bond purchases and life insurance companies fail to fill this gap, Japan's ultra-long-term yields continue to rise.
<img src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/187cb245-5979-4816-9ec6-574e63610ef5.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" alt="" original-src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/187cb245-5979-4816-9ec6-574e63610ef5.png"/>
U.S. Treasuries also turned downward, with the yield on 10-year Treasuries rising 3 basis points to 4.47%, nearing its highest level since 2007.
Miki Den, senior interest rate strategist at SMBC Nikko Securities, warned that unless the fundamental concerns regarding supply-demand imbalances and fiscal expansion expectations that drive yields higher are addressed, now is not the right time for direct purchases or flattening trades.
Market attention will shift to Nvidia's earnings report, which the company will release on Wednesday evening. Global chip stocks rose today, with Samsung Electronics up over 3%, SK Hynix and Taiwan Semiconductor up over 2%. The rise in chip stocks propelled the Korea Composite Stock Price Index up 2.1%, heading towards its highest closing level since late August.
Vey-Sern Ling, managing director at Union Bancaire Privee, stated that recent comments from Microsoft, Amazon, and Google indicate that demand for Nvidia chips should remain very strong in the coming quarters. Additionally, reports suggest that Japan has proposed purchasing billions of dollars worth of U.S. semiconductor products in trade negotiations
<img src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/7ef9ff25-6932-434c-8054-4c1b74d15083.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" alt="" original-src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/7ef9ff25-6932-434c-8054-4c1b74d15083.png"/>
The US Dollar Index rose by 0.2%, while the Euro fell by 0.2% against the US Dollar to 1.1304.
US tariffs and tax reduction policies have raised concerns about the US deficit, and investors remain vigilant about the fiscal health of the US economy. The Federal Reserve reiterated the need to gather more evidence before cutting interest rates, while the &#34;Sell America&#34; trend has impacted the US Dollar, causing the Dollar Index to decline nearly 7% year-to-date.
Spot gold remained largely unchanged.
Cryptocurrencies generally fell, with Bitcoin down 0.2% and Ethereum down 1.1%.
<img src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/9ae6c211-069f-4c5f-b4ca-6342f3aa65a1.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" alt="" original-src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/9ae6c211-069f-4c5f-b4ca-6342f3aa65a1.png"/>
Meanwhile, rebar prices have dropped to an eight-year low, with the Shanghai rebar contract trading at approximately 2958 yuan. Year-to-date, rebar prices have fallen by 11%, and iron ore prices have decreased by about 6%

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NVDA

Asian stock markets erased early gains, U.S. stock index futures fell, and the three-day rally in U.S. Treasuries came to an abrupt halt. The yield on Japan's 30-year government bonds jumped 10 basis points, while global chip stocks surged, with Samsung Electronics rising over 3% and Taiwan Semiconductor rising over 2%

- On Wednesday, weak demand in Japan's bond auction and ongoing concerns about U.S. fiscal health led to a halt in the rising trend of U.S. bonds, causing Japanese bonds to decline again.  
- Asian stock markets erased early gains, with the Hang Seng Index dropping 0.6% and the Nikkei 225 closing nearly unchanged.  
- The U.S. dollar index rose 0.2%, while cryptocurrencies generally fell, and rebar prices hit an eight-year low, reflecting broader market volatility.

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Taiwan Semiconductor

Samsung Electronics 

NVIDIA

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YieldMax NVDA Option Income Strategy ETF

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Amazon

Microsoft

Alphabet

Alphabet - C

Global stock market rally pauses, NVIDIA's earnings report approaching, global chip stocks surge, Japanese bonds and U.S. bonds continue to decline