U.S. Stocks Fall as Gold, Oil Rally and Dollar Hits Two-Month Low

Market Overview

Global markets focused on three major themes on Tuesday.

First, U.S. equities retreated, with all three major benchmarks ending lower. The S&P 500 fell 0.52% to 7,745.06, the Nasdaq Composite declined 0.32%, and the Dow Jones Industrial Average slipped 0.51%. Meta Platforms led losses among mega-cap technology stocks, falling 3.5%. However, semiconductor and memory-related shares outperformed, with SanDisk surging nearly 9% and Western Digital gaining more than 5%.

Second, commodities posted broad-based gains. Following the August 17 negotiation deadline, U.S.-Iran nuclear talks reached an impasse, fueling renewed concerns over potential supply disruptions through the Strait of Hormuz. As geopolitical risk premiums increased, Brent crude climbed 2.94% to $91.12 per barrel, while WTI crude advanced 2.96% to $84.84. Meanwhile, a weaker U.S. dollar further supported precious metals, sending gold up 2.31% to $4,481.70 and silver higher by 1.70% to $66.09.

Third, the U.S. Dollar Index (DXY) declined for a third consecutive session, touching its lowest intraday level in more than two months. The offshore Chinese yuan (CNH) strengthened beyond 6.74 per dollar, marking its highest level in over three years. Bitcoin also reclaimed the $64,000 level. In mainland China, equities rallied on heavy trading volume, with the ChiNext Index jumping 3.14% to 3,740.16, the Shenzhen Component Index rising 2.44%, and the Shanghai Composite Index gaining 1.41% to 3,982.65. Meanwhile, ChangXin Memory Technologies (CXMT) surpassed a market capitalization of RMB 4 trillion, underscoring continued investor enthusiasm for China's semiconductor sector.

Market OutlookWill the Commodity Rally Continue？

Crude oil's nearly 3% gain was driven primarily by escalating geopolitical tensions surrounding the stalled U.S.-Iran negotiations and rising concerns over potential disruptions in the Strait of Hormuz, rather than a meaningful improvement in underlying demand fundamentals. Should geopolitical risks ease, the current supply risk premium could gradually unwind.

However, with the U.S. dollar continuing to weaken and safe-haven demand strengthening, both gold and silver remain well supported. Investors should watch for increasing divergence across commodity markets as geopolitical and macroeconomic factors evolve.

Capital Flows Into AI and the Semiconductor Supply Chain

The AI investment theme remains firmly intact. Anthropic's annualized revenue has surpassed $65 billion, while semiconductor and memory stocks continued to outperform despite broader market weakness, highlighting sustained demand for AI computing infrastructure.

Meanwhile, Unitree Robotics is preparing for its public listing, and ChangXin Memory Technologies' valuation has exceeded RMB 4 trillion, reflecting continued enthusiasm for China's technology sector. Going forward, investors should closely monitor whether earnings growth can justify elevated valuations and whether new listings can maintain strong investor appetite.

Key Events to Watch

• Earnings releases and conference calls from Xiaomi Corporation and Baidu

• Developments in the U.S.-Iran negotiations and potential supply risks in the Strait of Hormuz

• The direction of the U.S. Dollar Index and the offshore Chinese yuan after CNH strengthened beyond 6.74 per dollar

• Unitree Robotics' STAR Market debut on August 19, with an IPO price of RMB 150.80 per share

• China's policy response following weaker-than-expected July economic data

• Continued momentum across the AI ecosystem after Anthropic's annualized revenue exceeded $65 billion, particularly within the AI semiconductor supply chain