Market analysis for March 21

Today is March 21. At its most recent meeting, the Federal Reserve kept the expectation of cutting interest rates three times during the year unchanged, and Chairman Powell hinted that it might slow down the pace of balance sheet reduction (contraction). This decision made the market have higher expectations for future easing policies, which in turn pushed the US stock market index to a record closing high. The S&P 500 index broke through the 5,200 mark for the first time, and the small-cap stock index rose 1.9%. Chip stocks and bank stocks rose 1.6% and 2.4% respectively, Nvidia turned 1%, and Micron Technology rose 13% after the market. Last quarter's revenue exceeded expectations by nearly 60%, and financial guidance for this quarter also greatly exceeded market expectations.

Meanwhile, when talking about the Blackwell chip, NVIDIA CEO Hwang In-hoon said that this is not just a chip, but a system, which is priced at $3-4 million. He stressed that the development of artificial intelligence technology has only just begun, and it is expected that the next 10 years will witness unprecedented progress, and the robotic version of ChatGPT will soon become a reality. In addition, Intel also announced plans to invest 100 billion US dollars in four US states to build the world's largest production base for artificial intelligence chips.

The Federal Reserve's decision triggered a sharp decline in US short-term Treasury yields. The 10-year US Treasury yield declined after a brief rise, and the US dollar index fell rapidly. The yen exchange rate rose for a while after the Federal Reserve meeting, and the rise in gold prices approached the highest level in history. The price of crude oil fell after two consecutive days of rising, while Bitcoin rebounded strongly after falling for a while.

For the Chinese market, the China Securities Index rose 1.9%, Pinduoduo closed up 3.5% after opening 16% higher, and Tencent's American Depositary Receipts (ADR) rose 1.8% after the earnings report. The A-share market rose slightly, and the collective performance of small micro capitalization stocks and AI application stocks was strong.

Overall, the Federal Reserve's latest decisions and market expectations for future monetary policy have brought positive signals to global stock markets, particularly in high-growth sectors such as technology stocks and chip stocks. Meanwhile, global macroeconomic uncertainty and changes in monetary policy remain the focus of investors' attention.