01, U.S. Stock Market Close

Last night, the Dow Jones Industrial Average rose by 376 points, or 1.1%.

The highest record of the Dow was set in January of last year, reaching 36,952 points. Subsequently, due to continuous interest rate hikes, the stock market kept falling, reaching a low of 28,660 points. However, by the end of November last year, the index had rebounded back above 34,000 points.

In comparison, the Dow's decline in 2022 was significantly less than that of the S&P 500 and the Nasdaq. But entering 2023, the index's increase has also been less than the other two major indices. The Nasdaq, which has the highest drop, has already risen by 14.5% so far this year.

The strong rebound of the Nasdaq is clearly related to the market's judgment that the Federal Reserve's interest rate hikes are nearing their end, and there is a possibility of a swift shift to rate cuts in the future.

The Nasdaq fell to its lowest point of 10,088 in October last year, and so far, the index's rebound has approached 20%, which is close to the standard for a technical bull market.

Last night, the Nasdaq rose by 1.5%, indicating that investors are very optimistic because the U.S. CPI data to be released tonight is expected to drop to 6.1%, and it is highly likely that the Federal Reserve's interest rate hikes will stop after March.

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Affected by this expectation, a large number of big tech giants have risen, and the increases are not small.

Microsoft, Netflix, and META all saw increases of more than 3%, while Apple and Amazon's increases were close to 2%. Chip stocks rose by more than 2%, and the new energy giant Tesla's increase reached 1.14%.

02, Earnings Data Ignored

(The second part of the text seems to be incomplete. Please provide the full context for an accurate translation.)It appears that the market has fallen into a habitual way of thinking. Last year, the continuous interest rate hikes by the Federal Reserve led to a decline in global stock markets. This year, everyone's attention is still focused on every move made by the Federal Reserve.

However, beyond this, there is another piece of data that is likely to have a greater impact on the market, which may have been overlooked.

The Federal Reserve has repeatedly emphasized that inflation could lead to repeated interest rate hikes, and there will be no pause for the time being. Some officials have indicated that the terminal rate needs to reach 6%, which means there will be an additional increase of more than 100 basis points.

Even Powell pointed out that the high level will be maintained throughout this year, and there is no possibility of interest rates falling for the time being. From this, it can be judged that there could be significant variables in interest rate hikes at any time.

It is clear that all officials are emphasizing inflation.

Only attentive investors have noticed that the fourth quarter earnings reports have almost settled, and the profit growth of listed companies has reversed. This is the fundamental factor that determines stock prices.

Among the companies covered by the S&P 500 index, the average earnings per share have shrunk by 2.3% year-over-year, indicating that the high-speed growth of earnings in the U.S. stock market over the past two years has come to a halt.

In fact, the high-speed growth of the U.S. stock market and the U.S. economy has a lot to do with the Federal Reserve's aggressive monetary easing. Now that the Federal Reserve has turned to a monetary tightening policy, without liquidity support, the growth pace of the U.S. economy has slowed down.

In addition to the earnings reports of the last quarter's companies, we can also see this from the growth rate of the U.S. GDP. The year-on-year growth rate of GDP in the last four quarters has been continuously declining, and economists predict that the year-on-year growth rate in the first quarter of this year will turn negative.

Therefore, the factors that will affect the U.S. stock market in the future will not only be inflation and the pace of interest rate hikes by the Federal Reserve, but more importantly, the actual profit situation of U.S. listed companies.03, China Gains Strength

Correspondingly, China's economy is more anticipated, and the performance of Chinese concept stocks is also more anticipated.

Last night, the NASDAQ index rose by 1.5%, while the NASDAQ China Financial Index increased by 2.6%, with a broad range of Chinese concept stocks generally rising.

China is making efforts in the digital economy. Baidu's increase last night exceeded 5%, Pinduoduo's increase was close to 4%, and the low battle rose by 3.65%.

The platform economy has been mentioned multiple times again, and the opportunity for a significant rebound for internet giants that had previously fallen deeply is not only reflected in the Chinese concept stocks of the US stock market, but the Hang Seng Technology Index of the Hong Kong stock market has also rebounded significantly.