This Week's Macro Hotspot Review: Gold and Silver Plummet, Tech Stocks Sold Off, Fed's December Rate Hike Uncertainty Resurfaces

On October 31, global financial markets experienced increased volatility this week. Gold and silver prices fell sharply, while Brent crude oil is expected to rise for the fifth consecutive week; U.S. tech stocks faced concentrated selling, with AI capital expenditure and cash flow pressures becoming the market's focal point. The Federal Reserve kept interest rates unchanged, but Chair Waller did not explicitly rule out a rate hike in December, further widening the divergence in market expectations regarding monetary policy direction.

In the precious metals sector, spot gold closed at $3,876.89 per ounce on Friday, down 6.7% for the month; silver closed at $49.13 per ounce, with a decline of over 18% in October. Strong U.S. economic and inflation data reinforced expectations for high interest rates, with rising real rates continuing to suppress gold and silver prices. In terms of crude oil, risks of supply disruptions in the Middle East supported oil prices, with Brent crude poised for a fifth consecutive week of gains.

In the U.S. stock market, the enthusiasm for AI trading has noticeably cooled, with the Nasdaq and S&P 500 indices declining for the third consecutive week. The Nasdaq fell 5.3% in October, marking its worst monthly performance since March 2025. Alphabet saw its stock plummet by about 13% due to concerns over capital expenditure and cash flow, while Intel suffered a sharp drop of 28.58% on Friday, its worst single-day performance since 1974. Apple’s market capitalization rose to $5.03 trillion, surpassing Nvidia's $4.93 trillion, reclaiming its title as the world's most valuable publicly traded company.

Regarding monetary policy, the Federal Reserve maintained interest rates unchanged this week with a 10 to 2 voting outcome, with two officials advocating for a 25 basis point hike. Chair Waller stated that the U.S. economy is growing strongly, but inflation has remained above target for nearly six years, and future policy will depend on new economic data. The U.S. core PCE rose 3.1% year-on-year in September, and the annualized GDP growth for the third quarter was 3.4%. CME data indicates that the market expects a 75% probability of a 25 basis point rate hike by the Fed in December.

On the international front, diplomatic efforts between the U.S. and Iran continue, with Qatar proposing a seven-day ceasefire plan; however, significant differences remain on issues such as sanctions, port blockades, the Strait of Hormuz, and nuclear programs. Meanwhile, the U.S. is still discussing the possibility of resuming military strikes against Iran, and risks to Middle Eastern supply have not dissipated.

In the AI industry, capital expenditure and financing pressures have become focal points for the market. Meta announced a stock financing plan of up to $97.5 billion, SpaceX secured approximately $40 billion in financing through equipment leasing arrangements, and Oracle expects to need up to $20 billion in external financing by fiscal year 2030. Anthropic has publicly submitted IPO documents, revealing projected revenue of $16.3 billion for the first half of 2026, with long-term computing power and infrastructure contract commitments totaling approximately $637 billion.

The semiconductor industry continues to be driven by AI demand. SK Hynix reported a 632% year-on-year increase in operating profit for the third quarter, while Samsung Electronics' semiconductor business achieved an operating profit of 106.5 trillion won, and SanDisk's revenue for the first quarter of fiscal year 2027 increased by 378% year-on-year. However, tech stocks faced significant selling this week, indicating that the market is beginning to focus more on whether AI investments can translate into actual profits and free cash flow.

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