US Market Night Watch | August 10 US Stock Market Fund Rotation: AI Hardware Decline, Defensive Stocks Rise, Chinese New Energy Vehicles Attract Capital
As US trading concluded on August 10, 2026, the market once again showed clear sector rotation characteristics. While AI hardware concept stocks faced selling pressure, traditional defensive sectors gained favor, and Chinese new energy vehicle stocks strengthened against the trend supported by earnings, becoming a highlight in the market. This article will provide an in-depth analysis of the overnight changes in fund flows across various US stock sectors, interpret the underlying market logic, and offer a preview of Asia-Pacific market opening sentiment.
US Major Indices Show Divergent Trends, Tech Stocks Under Pressure
The US stock market presented a volatile and differentiated pattern on August 10. The Dow Jones Industrial Average rose slightly by 0.3%, the S&P 500 remained basically flat, while the Nasdaq Composite Index fell by 0.7%. This divergent trend reflects that internal market funds are being reallocated from high-valuation technology sectors to more stable defensive sectors.
Notably, AI hardware stocks represented by NVIDIA and AMD generally declined, with NVIDIA's stock price falling 2.3% and AMD falling 1.8%. This trend echoes recent market concerns about slowing demand for AI hardware. Although financial reports from large tech companies show that AI businesses continue to maintain strong growth, investors are beginning to focus on the return cycle of AI investments, adopting a cautious attitude toward AI hardware projects that are difficult to profitable in the short term.
Defensive Sectors Gain Favor, Utilities and Consumer Staples Lead
While tech stocks are under pressure, defensive sectors have become a safe haven for funds. The utilities sector rose by 0.8%, and the consumer staples sector rose by 0.6%, performing significantly better than the broader market. These sectors have stable cash flows and lower valuations, making them attractive to safe-haven funds as market uncertainty increases.
Analysts point out that the strengthening of defensive sectors reflects market concerns about slowing economic growth. As the Federal Reserve's policy shift approaches, changes in the interest rate environment make high-dividend, low-volatility defensive stocks more attractive. In addition, geopolitical tensions have also prompted investors to increase allocations to defensive assets.
AI Hardware Cools Down, Cloud Services and Software Relatively Resilient
Although the AI hardware sector as a whole is under pressure, the cloud services and software sectors in the AI application field have shown relatively resilience. Cloud computing giants such as Microsoft and Amazon saw slight increases in stock prices, indicating the market's continued optimism about the AI application layer rather than the hardware layer.
Industry analysts indicate that AI investment is shifting from the infrastructure construction phase to the application development phase. Large enterprises are more focused on using AI technology to improve business efficiency rather than simply increasing hardware investment. This shift benefits software companies that provide AI solutions, while hardware manufacturers face short-term performance pressure.
Chinese New Energy Vehicle Sector Strengthens Against the Trend, Impressive Delivery Data
Among Chinese concept stocks, the new energy vehicle sector performed impressively, with stocks of NIO, XPeng, and Li Auto generally rising by 2%-3%. This trend is mainly attributed to these companies' July delivery data exceeding market expectations, showing that Chinese new energy vehicle market demand remains strong.
Specifically, NIO's July deliveries increased by 35% year-over-year, XPeng's deliveries increased by 42% year-over-year, and Li Auto's deliveries increased by 38% year-over-year. This data indicates that despite facing fierce market competition, Chinese new energy vehicle manufacturers have maintained a good growth momentum.
In addition, demand for Chinese new energy vehicles in the European market is also increasing, providing additional growth momentum for Chinese new energy vehicle companies. According to industry data, in the first half of 2026, Chinese new energy vehicle exports to Europe increased by more than 50%, becoming an important factor driving the performance of related companies.
Fund Flow Analysis: Rotation from AI Hardware to Defensive Sectors
From a fund flow perspective, the US stock market on August 10 showed clear sector rotation characteristics. According to exchange data, the AI hardware sector faced net selling, while defensive sectors such as utilities and consumer staples received net inflows.
Specifically, NVIDIA faced net selling of about $500 million, while AMD and Intel also faced net selling of $200 million and $150 million respectively. Meanwhile, the utilities sector received net inflows of about $300 million, and the consumer staples sector received net inflows of about $250 million.
This fund rotation reflects changes in investor risk appetite. In an environment of increasing market uncertainty, investors tend to allocate assets with stable cash flows and defensive characteristics rather than high-growth but more volatile tech stocks. Especially against the backdrop of increasing expectations for a Federal Reserve policy shift, the appeal of defensive sectors has further increased.
Market Sentiment Indicator: Fear Index Rises Slightly
As an important indicator of market sentiment, the Chicago Board Options Exchange Volatility Index (VIX) rose by 4.2% on August 10 to 16.8 points. This level indicates that market expectations for volatility in the coming month have risen, but overall remains in a relatively moderate range.
The rise in VIX is mainly affected by increasing geopolitical tensions and uncertainty in economic data. Investor concerns about the Federal Reserve's policy path, economic growth prospects, and geopolitical risks have increased, leading to increased demand for safe-haven assets.
US Treasury Yield Curve Changes: Reflecting Market Divergence on Economic Outlook
On August 10, the US Treasury yield curve showed a steepening trend. The 10-year Treasury yield rose 2 basis points to 4.2%, while the 2-year Treasury yield fell 1 basis point to 4.6%. This change indicates that market expectations for future economic growth and inflation prospects are divergent.
The steepening of the yield curve is usually seen as a signal that the economy may achieve a soft landing. On one hand, investors expect economic growth to remain resilient, supporting the rise of long-term Treasury yields; on the other hand, the market expects inflationary pressures to ease, leading to a decline in short-term Treasury yields.
Asia-Pacific Market Opening Sentiment Preview: Defensive Sectors May Receive Attention
Based on overnight US performance, Asia-Pacific markets are expected to show defensive characteristics when opening on August 11. Nikkei 225 index futures fell by 0.2%, and Hang Seng index futures fell by 0.3%, showing cautious market sentiment.
In terms of sectors, defensive sectors such as utilities and healthcare may receive fund favor, while technology sectors, especially AI-related concept stocks, may face certain pressure. The strong performance of Chinese new energy vehicle stocks in overnight US markets may provide positive support to related Asia-Pacific sectors.
In addition, investors will also closely watch the upcoming US inflation data, which will have an important impact on the Federal Reserve's policy path and thus affect global market trends.
Investment Strategy Suggestions: Balanced Allocation, Focus on Defensive Assets
Based on the current market environment, investors can consider the following strategies:
- Appropriately increase allocation to defensive assets such as utilities and consumer staples with stable cash flows
- Within the technology sector, focus on investment opportunities in the AI application layer rather than the hardware layer
- The Chinese new energy vehicle sector has good fundamentals and can be allocated on dips
- Maintain appropriate cash positions and wait for better entry opportunities
- Pay close attention to Federal Reserve policy changes and adjust investment portfolios in a timely manner
Overall, on August 10, the US stock market showed clear sector rotation characteristics, with funds flowing from AI hardware to defensive sectors, reflecting changes in market risk appetite. Investors should closely monitor this trend and adjust investment strategies in a timely manner to control risks while maintaining returns.
