During the FOMC decision week, the market rapidly lowered its bets on the Fed's interest rate cut in June. S&P indicated an initial increase of more than 1%, Tesla closed up more than 6%, leading large technology stocks, and Nvidia closed up 0.7% after opening 5% higher, driving chip stocks to narrow in the afternoon. China's stock index opened high and went low. Ideal Auto fell by more than 12%, while Ehang Smart turned down for a while after rising 30%. US bond yields returned to the high level set in February during the year, and oil prices rose about 2% to a new high of nearly five months. The US dollar rose and hovered at a two-week high. The yen stopped falling and turned upward for a while, and Bitcoin fell below 67,000 US dollars. Gold hit a new low of more than a week, and Luntong once rose above 9,160 US dollars to an 11-month high.
The Nvidia GTC Developer Conference announced the launch of the most powerful artificial intelligence chip, the BlackWell GPU, and software for applying the AI model, seeking to become a platform company similar to Microsoft and Apple. TSMC and Synopsys (Synopsys) will use Nvidia computational lithography. The two companies have integrated Nvidia's Culitho W software, and Synopsys rose more than 3% after the market.
Although mortgage interest rates remained high, the US NAHB real estate market index surpassed expectations and rose to 51 in March, rising for four months and hitting a new high since July last year. This represents the first time in eight months that the confidence of American homebuilders turned optimistic. The reason is that demand is improving.
The market expects the Federal Reserve's interest rate decision to “stand still” on Wednesday, but it is also focusing on whether to revise the “bitmap” of the interest rate path.
Since two US inflation figures were higher than expected last week, interest rate swap pricing shows that traders are betting less than 50% on the Fed's interest rate cut in June. Goldman Sachs, on the other hand, lowered the expected number of interest rate cuts by the Federal Reserve from four to three this year, and is still expecting to cut interest rates for the first time in June.
According to some media, the Bank of Japan is expected to announce the end of yield curve control (YCC) and ETF purchases on Tuesday, triggering a rapid decline in the USD/JPY exchange rate in the US stock market. The market is also betting that the Bank of Japan announced the end of its negative interest rate policy as early as this week.
US stocks rebounded from a two-week low. Tesla rose more than 6% to lead large technology stocks. On the first day of the AI event, Nvidia turned down for a while
On Monday, March 18, US stocks rose high. At a time when Nvidia's major AI event, the GTC conference focusing on the progress of video cards, and the intensive introduction of monetary policies by the Federal Reserve, the Bank of Japan, and the Bank of England, it is expected to end the previous two-week decline.
With the help of large technology stocks, the Dow, which skipped over 110 points, rose more than 180 points or 0.5% during the day and stopped falling for two days. The S&P 500 market rose as high as 1.1% and stopped falling for three days. The NASDAQ, which also stopped falling three times in a row, rose as high as more than 270 points or 1.7%, breaking the 16,000 point mark. The NASDAQ 100 rose to a high of more than 310 points or 1.8%. At one point, it rose above 18,000 points and broke away from a three-week low.
Among the 11 major S&P sectors, the communications services sector, which includes Google, led the way, with a rise of 3.6 percent, which is expected to be the best single-day performance since February 2. The technology sector rose 1.6%, and the defensive utilities sector's performance is at the bottom. According to some analysts, this represents a return to the upward trend driven by the AI boom and technology stocks since the beginning of the year. However, the Russell 2000 small-cap index turned down at the beginning of the session.
By the close, the Dow had stopped falling for two days. The S&P market, which had stopped falling for three days, both broke away from its lowest level since March 6. The NASDAQ stopped falling for three days and broke away from its lowest level since March 5, while Russell's small-cap stocks hit a three-week low since February 23:
The S&P 500 closed up 32.33 points, or 0.63%, to 5149.42 points. The Dow closed up 75.66 points, or 0.20%, to 38790.43 points. The NASDAQ closed up 130.27 points, or 0.82%, to 16103.45 points.
The NASDAQ 100 rose 0.99%, and the NASDAQ Technology Market Capitalization Weighted Index (NDXTMC), which measures the performance of technology components in the NASDAQ 100, closed up 1.22%, stopping a three-day decline and breaking away from the two-week low since March 5.
The Russell 2000 Small-Cap Index fell 0.72%, and the “Panic Index” VIX fell slightly.
Star tech stocks have risen sharply; Amazon alone is close to erasing the 1.3% increase in the day and hovered at a one-week low. Meta “metaverse” rose 2.7% to recover its decline since Wednesday; Apple closed up 0.6% to a two-week high; Microsoft closed up 0.2% after rising 1%; Netflix closed up 2% after rising 3.6%, approaching a monthly high; Google A rose 7.8% to its highest level in five weeks, the biggest increase in more than a year; Tesla closed up 6.3% to its biggest one-day gain in six months, rebounding from a new 10-month low for two days.
The increase in chip stocks narrowed rapidly in the afternoon. The Philadelphia Semiconductor Index closed down slightly after opening 2% higher, falling for four consecutive days, breaking the two-week low since February 29. After rising 5.2%, Nvidia turned down for a while in mid-day trading; Intel closed up 0.7% on the first day of the company's GTC conference; Intel closed up 0.2% after erasing 2.5%; Qualcomm turned down 0.2% after erasing 2.5%; TSMC's US stock nearly erased 3.6% of its initial intraday gains; AMD closed down 0.2% after falling 1.6%; and Oracle rose nearly 2% to a record closing high.
AI concept stocks had mixed ups and downs. Adobe, which closed down nearly 13.7% last Friday, turned 4.4%, breaking away from an eight-month low; ultra-microcomputers, which were traded as a S&P 500 constituent stock for the first time, rose more than 7% and then fell more than 6%, falling for three consecutive months. Palantir rose more than 2%, C3.ai turned 0.5%, Soundhound.ai fell 7.5% to break away from a two-year high, and BigBear.ai fell more than 9% to a three-week low.
According to the news, there are reports that Apple is actively negotiating with Google to seek authorization for Gemini AI to provide artificial intelligence support for some functions of the next-generation iPhone. Tesla will raise the price of the Model Y in many countries such as the US and Europe, implying that demand is strong and Goldman Sachs is not afraid to lower the target price. HSBC raised Nvidia's target price by 19% to $1,050. It is optimistic about AI product plans and anticipates that it may have an “entire value chain”. TSMC is said to be considering building advanced packaging production capacity in Japan, and the Bank of America raised its target price.
China Securities had mixed ups and downs. ETF KWEB closed up 0.8%, CQQQ rose 2.2%, and the Nasdaq Golden Dragon China Index (HXC) turned down after opening 0.6% higher. In the end, it closed down 0.6% and fell below 6,300 points, falling for three to a week.
Among the popular individual stocks, JD rose 1.5%, Baidu rose 0.9%, and Pinduoduo rose 4%; Alibaba rose 0.2%, Tencent ADR rose 2%, Station B went up 0.5%, NIO rose 0.7% after falling 5%, Xiaopeng Motor closed up 1.9% after rising more than 8%, Ideal Auto fell by more than 12% to its lowest level in a month, and Ehang Smart turned down for a while, and finally closed up 0.9%, returning to a high level during the year.
Among bank stocks, the industry benchmark Philadelphia Stock Exchange KBW Bank Index (BKX) opened 0.6% lower and then turned 0.5%, rebounding from a low level within the month for two days, but the KBW NASDAQ Regional Bank Index (KRX) fell 0.8%, and New York Community Bank (NYCB) fell nearly 7%.
European stocks, the Italian stock index alone, did not close down. The pan-European Stoxx 600 index closed down 0.17%, falling from a record high for three days to a new low for a week. Telecom stocks fell 1.4%, but automobile stocks rose 0.9%, leading the way with a rise of over 1.5%, and beauty giant L'Oréal dropped more than 1% to the bottom. The German stock index broke away from the highest in history for the fourth day in a row, and the French and Spanish stock indexes broke away from the record high.
Betting on the Federal Reserve's interest rate cut in June declined, and US bond yields returned to the high level of the year set in February
On the eve of the Federal Reserve's FOMC decision, US bond yields rose collectively. The 10-year US Treasury yield climbed about 22 basis points last week. Investors are worried that recent strong economic data will prevent the Federal Reserve from relaxing monetary policy soon.
The two-year US Treasury yield, which is more sensitive to monetary policy, rose to a high of nearly 3 basis points on Monday, once pushing 4.75% to a three-week high. The 10-year base bond yield climbed nearly 5 basis points to 4.35%, the highest since November 30 last year.
Meanwhile, the five-year US Treasury yield rose 4 basis points, rising 4.37% to the highest level since the end of November last year. The yield on 30-year long-term bonds also rose 4 basis points, the highest since late February.
The yield on 10-year German bonds, the benchmark for the Eurozone, rose by about 2 basis points at the end of Monday, rising for 6 consecutive days; yields on Italian and Greek bonds from heavily indebted peripheral countries fell about 2 basis points. The market expects the Bank of England to keep interest rates unchanged on Thursday. The 10-year British bond yield fell more than 1 basis point at the end of the session, and the two-year yield fell by about 3 basis points. German bond prices fell the deepest in eight months last week.
International oil prices rose by about 2%, hitting a new closing high in nearly five months, and European and American natural gas also rose
As Ukraine intensifies its attack on Russia's energy infrastructure and OPEC+ extends the production reduction agreement until the second quarter, the supply side of the oil market continues to tighten, and oil prices continue to rise recently. Meanwhile, European and American central banks are expected to cut interest rates soon or boost demand, and Morgan Stanley raised the target price of oil for the third quarter of this year by 10 US dollars to 90 US dollars per barrel.
WTI crude oil futures for April closed up 1.68 US dollars, up more than 2.07%, to 82.72 US dollars/barrel, the highest in nearly five months since late October last year. Brent crude oil futures closed up 1.55 US dollars in May, up more than 1.81% to 86.89 US dollars/barrel, the highest since October 31 last year.
The intraday rise in oil prices expanded rapidly. The May futures market, which is more active in US oil WTI trading, rose as high as $1.73 or more, rising above the $81 and $82 levels one after another, the highest in more than four months since the beginning of November last year. International Brent rose as high as 1.66 US dollars or 1.9%. At one point, it hit 87 US dollars, and also broke through 86 US dollars for the first time since November last year.
TTF Dutch gas futures, the benchmark for Europe, rose 5.7%, close to 29 euros/megawatt-hour, ICE UK gas rose by about 7.5%, and the EU carbon tax increased by about 3.1%. The increase in US natural gas futures was cut in half after rising by more than 6%. The colder weather over the next two weeks will boost heating demand.
The US dollar index traded at a high level for nearly two weeks. The yen stopped falling and turned up for a while, and Bitcoin fell below 67,000 US dollars
The DXY dollar index, which measures a basket against six major currencies, the DXY dollar index rose 0.2%, trading at 103.60 to a two-week high. It has risen by about 2% since this year. As the US economy performed better than expected, investors are no longer betting that the Federal Reserve will cut interest rates quickly and drastically.
EURUSD and GBP/USD, awaiting a decision by the country's central bank, both fell slightly to their lowest level since March 6. The yen stopped falling and rising against the US dollar at midday trading, then briefly rose above the 149 mark, then fell again and traded at its lowest level since March 7. The offshore renminbi fell slightly against the US dollar, still below the 7.20 yuan mark, and remained low for a week and a half.
Most mainstream cryptocurrencies have declined. Bitcoin, the largest market capitalization leader, fell 2% and fell below the $67,000 mark, while Ethereum, the second-largest, fell 4.5% and fell below $3,500, and is close to a monthly low. Standard Chartered raised the target price of Bitcoin at the end of the year from $100,000 to $150,000, which is close to double the all-time high of $74,000 set last week, and predicts that it will reach 250,000 US dollars by 2025.
Gold rebounded after hitting a new low in more than a week. At one point, copper rose above 9,160 US dollars to an 11-month high
The market paid attention to the inflation and interest rate path clues provided by the Federal Reserve meeting this week. COMEX gold futures closed up 0.13% to $2,164.30 per ounce in April. However, COMEX silver futures closed down 0.46% to $25.265 per ounce in May.
Spot gold fell to a new low of more than a week since March 7 during the European stock period, then rose slightly and reached the integer level of 2,160 US dollars during the US stock period. On March 8, gold hit a record high of close to 2,195 US dollars.
London's industrial base metals have had mixed ups and downs. The economic weather vane “Dr. Copper” once rose above 9,160 US dollars to an 11-month high. Both Lunxi and Lunxi closed slightly higher, with Renxi hitting a seven-month high on the 4th. However, Lun Zinc fell more than 1%, Lun Lead fell 1.9%, and Lunnickel fell 200 US dollars or more than 1%, and continued to break away from the high level set last Tuesday since the end of January.
Furthermore, New York cocoa futures prices have doubled to record highs since the beginning of the year. The main contract for Singapore iron ore futures rose more than 4% to 103.9 US dollars/ton. The domestic futures night market had mixed ups and downs. Iron ore rose more than 1.9%, bifocal rose more than 0.4%, and the Shanghai and tin night market rose more than 1.8%.
Editor/Somer