Market analysis on March 15

Today is March 15th. Last night, the US producer price index (PPI) data for February showed that inflation was heating up more than expected, causing the market to worry about continued inflationary pressure. PPI rose 1.6% year on year, the highest level since September last year. It increased 0.6% month-on-month, double market expectations, and the growth rate of core PPI (excluding food and energy prices) also accelerated month-on-month. The release of this data put pressure on the US stock market. In particular, technology stocks led the decline. The S&P 500 index and the Nasdaq index fell for the second day in a row, while the Dow Jones Industrial Average stopped three consecutive days.

Among technology stocks, Tesla plummeted by more than 4% for two consecutive days, while Microsoft reversed the market and rose more than 2% to a new record high. Chip stocks also generally fell. Nvidia fell nearly 5% during the intraday period and eventually closed down by more than 3%, while AMD dropped nearly 4% for two consecutive days. After the earnings report, Adobe declined by more than 10% in after-hours trading.

After the US inflation data was released, the price of US Treasury bonds accelerated, and the yield on ten-year US bonds rose by more than 10 basis points in the intraday period, reaching a two-week high. Meanwhile, the US dollar index also rebounded at an accelerated pace, hitting a new weekly high. Although US retail sales data showed a 0.6% month-on-month increase, it still fell short of expectations. Auto and parts dealers contributed the most to the month-on-month increase in retail sales, but the analysis showed that “actual” retail sales actually declined sharply after excluding the impact of inflation.

The crude oil market showed strong performance. Brent crude oil hit a four-month high. For the first time, the closing price of U.S. crude oil reached 80 US dollars in four months. In contrast, the price of gold declined at an accelerated pace after PPI data was released, and futures fell by more than 1% at one point. Bitcoin experienced a sharp correction after rising above $73,700 to a record high.

In the Chinese market, during the US stock trading period, the China General Stock Index fell nearly 3%, ending a four-day continuous upward trend and falling to a three-month high. Among them, B-station and NEX shares declined particularly significantly. The offshore RMB exchange rate against the US dollar fell more than 100 basis points in the intraday period, falling below 7.20. The A-share market surged higher and retreated, with the three major indices closing down slightly. The AI and flying car sectors led the decline, while the innovative drug sector collectively rebounded. This series of developments reflects the sensitive reaction of global financial markets to US inflation data, and also shows the vulnerability of technology stocks to market fluctuations.

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