"US Stocks Plunge: Dow Down 1,200 Points, Yet A-Shares Shine"

For the average person, they only know that inflation leads to rising prices, affecting daily life. However, for businesses, inflation could very well lead to bankruptcy, and the impact of inflation on American companies is becoming increasingly apparent. As more and more American listed companies release their financial reports, investors have to face this issue. Last night, the U.S. stock market once again entered a sharp decline mode.

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When the U.S. stock market closed early today, all three major stock indices fell. The Nasdaq index had the largest drop, reaching 4.73%, or 566 points down. However, we should pay more attention to the Dow Jones Industrial Average, which fell throughout the day with almost no rebound adjustment. It opened at 32,654 points, which turned out to be the highest point of the day, and fell to the lowest point of the day, 31,393 points, before closing, with the maximum drop of the day exceeding 1,200 points. It's not just technology stocks that are falling sharply, but financial stocks and other sectors are also declining.

Amazon's stock fell by more than 7%, Apple's stock fell by 5.6%, and Google also fell by nearly 4%. In comparison, the drop in Chinese concept stocks was relatively smaller. The Nasdaq Golden Dragon Index fell by 2.5% last night, far lower than the Nasdaq's drop.

However, the performance of stocks related to new energy vehicles was not very good. Tesla fell by 6.8%, NIO fell by 4.8%, and XPeng and Li Auto fell by 3.8% and 1.4%, respectively.

In addition, a piece of news about Tesla has attracted market attention. The S&P 500 ESG Index announced the latest adjustment plan for its constituent stocks, and Tesla was removed from this index, indicating that the company is not as ideal as expected in terms of environment, society, and governance. After this news was announced, Musk immediately expressed his opposition and did not accept this criticism.02

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On Tuesday, Walmart's stock price plummeted by more than 11%, and the downward trend did not stop on Wednesday, with another drop of 6.8%.

Another retail giant, Target, saw its stock price fall by 24.9% last night.

The reason for the decline in both companies' stock prices is the same: their published financial reports fell far short of market expectations. Take Walmart as an example; although its operating income increased, net profit fell by 25% year-on-year. What is truly worrying is that the increase in revenue without a corresponding increase in profit fully illustrates the immense harm of inflation.

Both companies explained that the continuous rise in fuel and labor costs over the past period has worsened their profits. Moreover, for these retail industry giants, the increase in purchase costs and the cost pressure of logistics channels are also eroding the originally not-so-high profit margins per item.

From these financial reports, everyone sees the changes in the future, and the market is worried that more and more companies will be significantly affected by inflation in the future.

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The impact is not limited to the retail industry but also includes ordinary families. Under the influence of inflation, the continuous rise in prices has affected the purchasing desire of ordinary American families, a phenomenon that has already been reflected in related ETFs.

Yesterday, the Consumer Discretionary ETF and the Consumer Staples ETF both fell by more than 6%.

Of course, due to the significant decline in the U.S. stock market, almost all industry ETFs have experienced different degrees of decline. The decline in the financial sector is also worth our attention. Recently, we saw Buffett increase his holdings in oil stocks while reducing his positions in bank stocks. The stock prices in recent days have once again proven Buffett's forward-looking vision. Last night, Bank of America and Wells Fargo both fell by more than 3%.In the days leading up to this, the A-share market's performance was relatively independent and not too affected by the decline in the U.S. stock market. However, the performance of the A-share market today is very crucial.

After the sharp drop in the U.S. stock market last night, if the A-share market can still maintain its own rhythm, then a rebound in the A-share market in the future can be expected.

This morning, after the opening of the market, the Hong Kong market has been greatly affected. The Hang Seng Index opened with a drop of nearly 3%, and the Hang Seng Technology Index fell by 4.5%. Close to the noon break, the Hang Seng Index continued to consolidate at a low level, but the technology index has already rebounded slightly.

In the A-share market, although several major indices also fell in the early morning, they have now rebounded to some extent. The decline in each index is less than 1%, and there has not been a significant drop following the U.S. stock market, indicating that we can continue our "independent trend".