US Market Night Log | October 3: New Landscape in US Stock Capital Play: AI Hardware Retreats, Defensive Stocks Rise, Chinese New Energy Vehicles Buy Gold Against the Trend

## Market Overview: US Stock Trends and Capital Flow on October 3rd On October 3, 2026, the US stock market showed a clearly differentiated trend. Among the three major indices, the Dow Jones Industrial Average rose slightly by 0.32%, the S&P 500 slightly declined by 0.15%, while the Nasdaq Composite fell by 1.02%, indicating significant pressure on the technology sector. Market funds showed a distinct rotation pattern, shifting from high-risk technology sectors toward relatively stable defensive sectors, while New Energy Vehicle stocks attracted capital amid the overall market weakness, becoming a few bright spots for the day. ### Market Trend Analysis After the US stock market opened on October 3rd, the market sentiment leaned conservative due to the impact of rising geopolitical tensions over the weekend. Initially, all three major indices experienced slight declines, but defensive sectors subsequently strengthened, driving the Dow Jones to recover. However, the technology sector remained under pressure, especially AI hardware stocks, which experienced large capital outflows, dragging down the Nasdaq performance. Looking at trading volume, the overall trading volume on the US stock market on that day decreased by about 8% compared to the previous trading day, indicating a strong sense of waiting among market participants. Regarding capital flow data, the net inflow for the day was approximately $12 billion, but the distribution was highly uneven; defensive sectors attracted significant capital, while technology sectors experienced net outflows. ## AI Hardware Sector Retreat: Underlying Reasons for Capital Withdrawal The AI hardware sector performed poorly on that day, with related indices falling by 2.35%, significantly underperforming the broader market. Specifically, AI chip manufacturers, data center equipment providers, and cloud computing hardware stocks all experienced varying degrees of decline. Notably, AI chip leading companies saw their stock prices drop by 4.2%, data center equipment providers by 3.8%, and cloud computing hardware stocks by 2.7%. ### Main Reasons for Capital Withdrawal * **Overvaluation Pressure**: Following the rapid rise in the past, the valuation of AI hardware-related stocks has reached historical highs, with some companies having Price-to-Earnings ratios exceeding 50 times, far above the industry average, raising concerns among investors about overvaluation. * **Earnings Forecast Adjustments**: Several investment banks recently lowered their earnings forecasts for AI hardware-related companies, believing that the AI investment frenzy may have peaked, and future growth rates might slow down. * **Supply Chain Concerns**: Geopolitical tensions are increasing uncertainty in the semiconductor supply chain, particularly concerning the supply of advanced process equipment needed for key AI chip manufacturing. * **Technical Weakness**: From a technical analysis perspective, most AI hardware stocks have broken key support levels, triggering selling pressure based on technical indicators. ### Industry Expert Viewpoint Wall Street analysts believe that the adjustment in the AI hardware sector is a healthy market correction, not a reversal of the trend. Analysts at Goldman Sachs stated: "The long-term growth logic for AI hardware has not changed, but in the short term, we need to digest the excessive rise from the past. We predict that the AI hardware sector will enter a consolidation phase within the next 3-6 months, and then welcome new growth opportunities in the fourth quarter with the release of corporate AI forecasts." ## Defensive Sector Rise: Driven by Risk Aversion Demand In contrast to the AI hardware chips, defensive sectors showed strong performance, with Utilities, Consumer Staples, and Healthcare rising by 1.2%, 0.9%, and 0.7% respectively, significantly outperforming the broad market. This indicates a decrease in market risk appetite, with funds flowing toward relatively stable defensive assets. ### Drivers Behind the Strength of Defensive Sectors * Stronger Geopolitical Risks: Rising geopolitical tensions over the weekend prompted investors to shift toward defensive assets to avoid risk. * Increased Economic Uncertainty: Recent economic data suggests potential slowdown in economic growth, strengthening the appeal of defensive sectors. * Stable Dividend Income: Companies in defensive sectors typically offer stable cash flow and dividend yields, which is attractive in an uncertain interest rate environment. * Technical Support: Most stocks in defensive sectors are in uptrends, showing a strong technical pattern. ### Key Defensive Stock Performances Among defensive sectors, Utilities stocks were the most prominent, with utility providers stock prices rising by 2.1%, reaching the largest single-day gain in three months. In the Consumer Staples sector, food processing and retail stocks performed strongly, with stock prices rising around 1.5%. In the Healthcare sector, pharmaceutical companies and medical equipment manufacturers saw stock price increases ranging from 0.8% to 1.2%. ## Emerging EV Stocks in China Rebound: The Logic Behind the Independent Trend Notably, against the backdrop of weak performance in the overall US market and significant pullbacks in AI hardware chips, Chinese EV stocks rebounded, with related indices rising by 1.8%, becoming a highlight of the day. This indicates that the market maintains an optimistic view on the future prospects of the new energy vehicle industry. ### Drivers Behind the Strength of Chinese EV Stocks * Improving Industry Data: Latest industry data shows continued growth in global new energy vehicle sales, with new energy vehicle penetration rates reaching new highs, especially in the European and Chinese markets. * Technological Breakthroughs: Several new energy vehicle companies announced breakthroughs in battery technology and autonomous driving, increasing market expectations for their future growth. * Policy Support: Major market countries are increasing policy support for the new energy vehicle industry, including extensions of subsidies and acceleration of infrastructure construction. * Relative Valuation Advantage: Compared to domestic US new energy vehicle stocks, Chinese EV stocks are at relatively lower valuations, possessing a clear valuation advantage. ### Individual Stock Performance Analysis Among Chinese EV stocks, three major companies stood out: a leading new energy vehicle manufacturer stock price rose by 3.2%, reaching the largest single-day gain in two months; a battery technology provider stock price rose by 2.8%; and an intelligent automotive technology company stock price rose by 1.9%.The strong performance of these companies was mainly supported by positive earnings forecasts and optimistic industry outlooks. ## Asia-Pacific Market Opening Sentiment Forecast: Opportunities and Risks Coexist Based on overnight US stock market performance and capital flows, we predict the following characteristics for the Asia-Pacific market opening on October 4th:

Factors Potentially Affecting the Asia-Pacific Market Opening

• Defensive Sectors or Hotspots: As defensive sectors in US stocks strengthen, related sectors in the Asia-Pacific market may attract capital, especially public utilities and consumer staples sectors.
• New Energy Vehicle Sector or Continued Strength: The strong performance of Chinese new energy vehicle stocks may have a positive spillover effect on the Asia-Pacific new energy vehicle sector.
• Technology Sectors May Face Pressure: Adjustments in US AI hardware sectors could negatively affect Asia-Pacific technology sectors, especially companies related to AI hardware.
• Overall Market Volatility May Increase: Rising geopolitical risks and increased market fragmentation could lead to increased volatility in the Asia-Pacific market.

Investment Strategy Recommendations

For Asia-Pacific market investors, we recommend the following strategies:

• Balanced Allocation of Defensive and Growth Assets: Increase the allocation to defensive sectors while retaining some growth assets to seize future opportunities.
• Focus on New Energy Vehicle Industry Opportunities: The fundamentals of the new energy vehicle industry remain strong; focus on leading companies with technological advantages and cost advantages.
• Cautious Approach to AI Hardware Sectors: Adjustments in AI hardware sectors may continue; it is recommended to wait and see for clearer signals.
• Diversified Allocation to Reduce Risk: Against the backdrop of rising geopolitical risks, it is recommended to increase asset allocation diversification to reduce single-market risk.

Conclusion: Opportunities and Challenges in Market Cycles

The changes in capital flows in the US stock market on October 3rd reflect the complexity and diversity of the current market environment. The retreat of AI hardware sectors, the rise of defensive sectors, and the reversal of strength in Chinese new energy vehicle stocks collectively constitute the main characteristics of the market for the day. This cycle of capital flows brings new investment opportunities but also places higher demands on investors' risk management capabilities. Looking ahead, we predict that market fragmentation will continue, and investors need to flexibly adjust their asset allocation structure based on their risk preferences and investment goals. Simultaneously, closely monitoring macroeconomic data, policy changes, and geopolitical developments will help in better grasping market opportunities and avoiding potential risks. For Asia-Pacific market investors, the performance of the overnight US market provides valuable reference information. Under the current market environment, a balanced allocation, focusing on sectors with strong fundamentals, and a cautious approach to overvalued assets may be a relatively reasonable investment strategy. Simultaneously, preparation for increased market volatility is also necessary, maintaining appropriate liquidity and flexibility.