The May PMI weighed heavily on US equity bonds, and Nvidia was “alone and beautiful.”

Overnight, as the initial value of the US composite PMI for May heats up to a two-year high, showing that the price index is rising rapidly, indicating that inflation is still stubborn, once again hitting expectations of interest rate cuts hard. The market was “double killed by stocks and bonds,” and commodities, etc. experienced a severe setback.

The three major indices collectively closed down. The Dow fell more than 1% to a two-week low. The NASDAQ closed down 0.39%, and the S&P 500 fell below 5,300 points, breaking the closing low since May 14.

Under the S&P index, large-cap stocks other than Nvidia almost “completely destroyed”, and in the 11 sectors, IT, where Nvidia is located, barely closed up 0.6%.

Nvidia once rose to 12% in the intraday period, hitting a record high of 9.3%. The closing price broke through the $1,000 mark for the first time in history, and the company's market capitalization reached 2.5 trillion US dollars for the first time.

Boosted by Nvidia, the tech stock “Seven Sisters” collectively rallied at the beginning of the session, but lost intraday gains and recovered all previous gains by the close.

US bond yields have collectively risen. After the PMI data was released, the two-year US Treasury yield, which is more sensitive to interest rate policies, once rose nearly 10 bp to a two-week high, and climbed 7 bp to 4.94% during the day; the 10-year US Treasury yield was once pressured by 4.50%, rising about 6 bps during the day.

Swap market pricing shows that expectations for the Fed to cut interest rates have been postponed from November to December.

In terms of commodities, oil and gold collectively plummeted.

Crude oil plummeted and fell for four consecutive days. US oil closed down 0.9% to 76.87 US dollars/barrel; oil closed down 0.66% to 81.36 US dollars/barrel, all hitting three-month lows.

Spot gold opened low and declined at an accelerated pace after the PMI data was released. It fell nearly 2% to about 50 US dollars during the day, and about 2328.55 US dollars/ounce at the close.

Bitcoin was sold at an accelerated pace when it hit 70,000 US dollars. At one point, it fell more than 3,000 US dollars during the short-term dive, hovered around 66,800 US dollars at the close, and fell more than 4% during the day.

However, as the US Securities Regulatory Commission (SEC) announced plans related to Ether spot ETF transactions, the rise of Ethereum continued.

The dollar also rose slightly. Due to falling interest rate cut expectations, the Federal Reserve is likely to maintain interest rates at the current high level for a longer period of time. The US dollar rebounded in response, rising 0.09% during the day, and was above 105.1 at the close.

How will the market perform next?

Market confidence is likely to continue to weaken, considering the “release of the hawk” minutes of the US Federal Reserve meeting released the day before, compounding the intensive voices of many Fed executives recently saying they may “not rush to cut interest rates.”

Chris Low of FHN Financial said:

“The minutes of the meeting remind people that although the Federal Reserve believes it is unlikely to raise interest rates again, the possibility of raising interest rates is not ruled out if inflation does not perform well.”

However, Nvidia's strong profit momentum and steady economic growth may also bring upside for S&P.

Andrew Tyler of J.P. Morgan Chase's trading division said:

“As the AI theme continues to play its role and the fundamentals are intact, we are likely to continue to hit record highs.”

Editor/Somer