Dow Drops Over 400 Points, US Treasury Yields Hit 3-Month High

On Wednesday, the three major indices closed lower, with the Dow Jones Industrial Average (DJIA) falling by over 400 points, marking its largest single-day decline in a month. U.S. Treasury yields hit a three-month high, with the 10-year U.S. Treasury yield, sensitive to interest rate expectations, rising to as much as 4.26%, a three-month peak. The Federal Reserve's Beige Book indicated a continued slowdown in inflation. According to CME's "FedWatch," the probability of the Federal Reserve lowering rates by 25 basis points in November stands at 93%, while the probability of maintaining the current rate is 7%, and the probability of a 50 basis point rate cut is 0%.

**U.S. Stocks**: At the close, the DJIA fell 409.94 points, or 0.96%, to 42,514.95; the NASDAQ Composite fell 296.47 points, or 1.60%, to 18,276.65; the S&P 500 index fell 53.78 points, or 0.92%, to 5,797.42. Nvidia (NVDA.US) and Apple (AAPL.US) both fell by more than 2%. The NASDAQ Golden Dragon China Index closed down by 1.2%, Alibaba (BABA.US) fell by 2.4%, Li Auto (LI.US) rose by 3.7%, and New Oriental (EDU.US) fell by over 8%.

**European Stocks**: The German DAX30 index fell by 55.16 points, or 0.28%, to 19,380.45; the UK's FTSE 100 index fell by 49.10 points, or 0.59%, to 8,257.44; the French CAC 40 index fell by 37.62 points, or 0.50%, to 7,497.48; the Euro Stoxx 50 index fell by 17.86 points, or 0.36%, to 4,921.45; the Spanish IBEX 35 index rose by 36.15 points, or 0.31%, to 11,868.85; the Italian FTSE MIB index fell by 44.52 points, or 0.13%, to 34,689.00.

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**Asia-Pacific Stocks**: The Nikkei 225 index fell by 0.8%, the Jakarta Composite Index in Indonesia fell by 0.02%, and the VN30 Index in Vietnam rose by 0.06%.

**Cryptocurrencies**: Bitcoin fell by nearly 1.4%, trading at $66,480.98 per coin; Ethereum fell by over 4.3%, trading at $2,507.01 per coin.

**Gold**: COMEX December gold futures fell by 1.09% to $2,729.70 per ounce at the close, having risen to a record high of $2,772.60 during the session before quickly falling to a daily low of $2,722.10.

**Oil**: WTI December crude oil futures fell by $0.97, or 1.35%, to $70.77 per barrel; Brent December crude oil futures fell by $1.08, or 1.42%, to $74.96 per barrel.

**Metals**: London metals experienced mixed movements, with nickel and copper falling by more than 1%, zinc rising by 0.41%, and aluminum rising by 0.8%.

**Macro News**

Federal Reserve "Beige Book": Manufacturing activity has declined in most regions of the U.S. On October 23rd local time, the Federal Reserve released the National Economic Conditions Survey (also known as the "Beige Book"). According to the "Beige Book," overall, since early September, economic activity has remained essentially unchanged in almost all regions, with only the Richmond and Chicago areas showing slight growth, and manufacturing activity has declined in most regions. The "Beige Book" indicates that banking activity is generally stable or slightly rising, with loan demand showing mixed trends, and some areas noting improvements in prospects due to lower interest rates. Consumer spending reports show mixed results, with some areas observing changes in purchasing composition, mainly shifting towards lower-priced alternatives. Real estate market activity remains generally stable, with housing inventory continuing to increase in most areas of the country and housing prices remaining stable or slightly rising. Nevertheless, uncertainty in mortgage interest rate trends keeps some homebuyers on the sidelines, and the lack of affordable housing remains a long-standing issue in many communities. Although data centers and infrastructure projects have driven activity in some areas, the overall commercial real estate market is stable. A brief dockworkers' strike caused only a slight temporary disruption to the economy. Damage from hurricanes affected crops and led to a pause in business activity and tourism in the southeastern United States. Agricultural activity is flat or slightly down, with some crop prices still at unprofitably low levels. Energy activity also remains unchanged or slightly down, with lower energy prices compressing producers' profit margins. Despite increased uncertainty, contacts remain optimistic about the long-term outlook.Lagarde: European Central Bank President Christine Lagarde once again defended the benefits of free trade, stating that everyone should be mindful not to harm global trade. When asked about the prospect of rising tariffs at an Atlantic Council event on Wednesday, Lagarde said history has shown the damage such measures can cause. "Periods of restrictions and barriers are not periods of global prosperity and strong leadership, so I think, whoever ends up being the president of this country, should at least remember that," Lagarde said. "Because we have a big market, and to conclude that the domestic economy will be better just because we are going to raise tariffs, I think it's a bit far-fetched."

Bank of Canada Lowers Benchmark Interest Rate to 3.75%. The Bank of Canada announced today a 0.5% reduction in the overnight rate target, bringing it down to 3.75%, and stated that the central bank is continuing its policy of normalizing the balance sheet. This marks the fourth consecutive rate cut by the central bank this year. Bank of Canada Governor Tiff Macklem said in a statement: "We took a larger step today because inflation has returned to the 2% target, and we want to keep it near that target."

**Stock News**

IBM (IBM.US) Reports Q3 Net Loss of $330 Million. On Wednesday, IBM's stock fell by 5% in after-hours trading after the company's third-quarter revenue missed Wall Street's expectations. The financial report showed a 1.5% year-over-year increase in IBM's overall revenue. The third-quarter net loss was $330 million, or a loss of $0.36 per share, compared to a net profit of $1.7 billion, or $1.84 per share, in the same period last year. For the fourth quarter, management expects revenue growth at a constant currency rate to be flat compared to the third quarter. Revenue for the third quarter grew by 2% at a constant currency rate. The company's consulting revenue was $5.15 billion, down 0.5%. Infrastructure segment revenue was $3.04 billion, down 7%.

Tesla (TSLA.US) Earnings Beat Surprises Wall Street. Tesla's latest financial report shows that the company's quarterly profit exceeded analysts' expectations and predicts a "modest increase" in vehicle deliveries for the year, causing the stock price of the world's largest electric vehicle manufacturer to surge by over 11% in after-hours trading. The report shows that Tesla's net profit for the third quarter was $2.167 billion, exceeding expectations of $1.78 billion, with a gross margin of 19.8%, higher than the expected 17.3%. Revenue grew by 8% to $25.2 billion, slightly below the average expectation of $25.4 billion. Tesla stated: "Despite the ongoing deterioration of macroeconomic conditions, we expect a modest increase in vehicle deliveries in 2024." In addition, Tesla's cost per vehicle sold has dropped to a historical low, around $35,100. Tesla still expects mass-market vehicles to begin production in the first half of 2025.

Apple (AAPL.US) Releases New AI Preview with Integrated ChatGPT Features. According to TechCrunch, on Wednesday, Apple Intelligence released the latest updates for iOS 18.2, iPadOS 18.2, and macOS Sequoia 15.2, where developers will experience the integrated ChatGPT features for the first time. At the same time, Apple also introduced other intelligent features, including Genmoji, Image Playground, Visual Intelligence, and Image Wand. The public will also have access for the first time to Apple Intelligence features such as integrated writing tools, image cleanup, article summaries, and a redesigned Siri input experience, which were provided in iOS 18.1, iPadOS 18.1, and 15.1 versions. However, they will have to wait for future updates to access the OpenAI platform. Users must select Apple Intelligence and ChatGPT separately during the setup process or later in the settings. They do not need to have a ChatGPT account or a separate application. However, without a premium account, the number of queries they can access will be limited, but everyone can access all OpenAI models, including GPT-4.