The Federal Reserve raised interest rates by 25 basis points as scheduled. The resolution statement suggests that interest rate hikes may end soon, and the three major US stock indexes hit new intraday highs. Powell reiterated during the press conference that inflation is still too high and emphasized the need to continue to raise interest rates. US Treasury Secretary Yellen said that the government is not considering expanding the scope of deposit insurance.
The US stock index went down in unison, closing down at least 1.6%. The regional bank index fell more than 5%, while the First Republic of California's “hometown” Westpac United Bank fell 17%. Nvidia, which released GPUs dedicated to ChatGPT, went against the market and closed 1% higher. The pan-European stock index hit one-week highs, but Credit Suisse's European stock, which rebounded more than 7% on Tuesday, fell nearly 6%. The two-year US bond yield hit a one-week high in European stocks. At one point, US stocks fell more than 30 basis points intraday.
After the Federal Reserve's decision, the US dollar index dived, falling more than 1% intraday, hitting a new low of more than six weeks. Gold once rose more than 2%. Crude oil rose to a one-week high three times in a row. US gas fell more than 7% to a two-and-a-half-year low. Luntong and Wullianyang hit a new one-week high, and Lunnickel hit a new low of more than four and a half months.
After the meeting, the Federal Reserve announced that it would continue to raise interest rates by 25 basis points, as expected by the market. The resolution statement omitted what was said in the previous eight statements that it might be appropriate to continue raising interest rates, changing the name that some additional policy tightening might be appropriate. It suggests that interest rate hikes may soon be ended, acknowledges pressure from the banking industry, and believes that uncertainty is increasing. At the press conference after the meeting, Federal Reserve Chairman Powell said that a few days before the meeting was held, Federal Reserve officials had indeed considered suspending interest rate hikes, but the decision to raise interest rates was passed unanimously at the meeting. He reiterated that inflation is still too high, that the path to reducing inflation is bumpy, and that there is still a long way to go, saying that if necessary, the Federal Reserve will raise interest rates. At the same time, he pointed out that if a sharp decline in loans puts pressure on economic growth, the Federal Reserve will not need to raise interest rates as much as anticipated.
After the Federal Reserve's decision was announced, the Dow and S&P both turned upward, major US stock indexes collectively rose, the US dollar dived, and US bond yields maintained a downward trend. The benchmark 10-year and interest-sensitive 2-year US bond yields broke away from a one-week high. However, during Powell's press conference that interest rate hikes will continue to be raised to contain high inflation, Yellen, who testified in the Senate on the budget for the new fiscal year, said that the US government is not considering expanding the scope of federal deposit insurance. This is tantamount to denying the media news that the government is considering extending insurance to all deposits this Tuesday.
Bank of America shares fell sharply after Yellen made the above statement. The regional bank index fell more than 5%, First Republic Bank plummeted 15.5%, and First Republic California's “hometown” WestPacific United Bank fell 17%. Among the big banks, Bank of America and Wells Fargo fell 3.3%, Citi fell 3%, J.P. Morgan fell about 2.6%, and asset management giant Charleston Wealth Management closed down 5.4%.
The price of US bonds rebounded further, and yields declined at an accelerated pace. Yields on 2-year US Treasury bonds fell more than 30 basis points from the one-week high set in Wednesday's session, taking back all of Tuesday's and Wednesday's gains. The decline in the US dollar index widened to more than 1%, continuing to fall below its low level since the beginning of February.
After Powell and Yellen took turns speaking, the three major US stock indexes fell sharply by more than 1%, the regional banking index fell more than 5%, and Nvidia went against the market
The performance of the three major US stock indexes was mixed in early trading. The Dow Jones Industrial Average, which opened slightly higher, turned down at the beginning of the session and turned higher less than an hour later. It rose nearly 54 points, nearly 0.2%, and then declined. At the end of early trading, the decline widened to over 30 points. The S&P 500 index and the Nasdaq Composite Index, which opened slightly lower, hit a new daily low at the beginning of the session. The S&P fell nearly 0.2%, and the NASDAQ fell more than 0.2%. They all turned up less than an hour after opening. S&P rose nearly 0.3% when it hit a new daily high, then turned down at the end of early trading. The increase in the NASDAQ increased to nearly 0.3% at the end of early trading and turned down after entering midday trading.
Before the Federal Reserve announced its decision, the NASDAQ rose slightly, while the Dow and S&P declined slightly. After the announcement of the resolution, the Dow and S&P turned higher, and both the NASDAQ reached new daily highs. The NASDAQ rose about 1.3%, the S&P rose more than 0.9%, and the Dow rose slightly more than 201 points and more than 0.6%. Powell gradually recovered gains during the press conference. After Yellen's speech, they all turned down. Collectively hit a new daily low at the end of the session, all falling more than 1%.
In the end, the three major indices fell back after two consecutive days of collective gains. S&P closed down 1.65% to 3936.97 points, falling from the highest level since March 6, when it closed at 4,000 points on Tuesday. The Dow closed down 530.49 points, or 1.63%, to 32030.11 points, leaving the closing high since March 8 set on Tuesday. The NASDAQ closed down 1.60% to 11669.96 points, taking back all gains since Tuesday's closing high since February 15.
The small-cap index Russell 2000, which is dominated by value stocks, closed down 2.83%, continuing to outperform the market, taking back the gains of the previous two days, and approaching the low since the end of December last year set last Friday. The NASDAQ 100 index, which focuses on technology stocks, closed down 1.37%, falling from the highest level since February 2, which was set for two consecutive days of gains on Tuesday.
All major sectors of the S&P 500 fell sharply in midday trading. At the close, with the exception of essential consumer goods, which fell nearly 1%, and Nvidia's IT sector, which fell about 0.9%, other sectors fell at least more than 1%. Real estate led the decline by 3.6%, followed by a drop of nearly 2.4% in the financial sector where bank stocks are located, while non-essential consumer goods fell 2.2%.
Bank stocks, which rebounded sharply on Tuesday, retreated. The Philadelphia Stock Exchange KBW Bank Index (BKX), which closed up nearly 5% on Tuesday, and the regional bank index KBW Nasdaq Regional Banking Index (KRX), both accelerated their decline after Yellen's speech, closing down 4.7% and 5.3% respectively. The regional bank stock ETF SPDR S&P Regional Bank ETF (KRE), which closed up nearly 6% on Tuesday, closed down 5.7%.
Among regional banks, First Republic Bank (FRC), which closed up nearly 30% on Tuesday and recorded the biggest increase since listing, fell about 8% at the beginning of the session. After turning up in early trading, it once rose more than 6%, then turned down again. After the announcement of the Federal Reserve's decision, it accelerated its decline after Yellen's speech, closing down nearly 15.5%.
The West Pacific Bank (PACW), the California “hometown” of First Republic Bank, fell even more sharply, closing down 17.1% after announcing that it would not seek funding, believed that its liquidity was stable, and that its deposit balance was stable. Alliance Western Bank (WAL) closed down nearly 5%. New York Community Bank (NYCB), which closed 30% on Monday and recorded the biggest one-day gain since listing, closed down nearly 4.7%. KeyCorp (KEY) closed down nearly 5.6%, and Zions Bancorporation (ZION) closed down 6.7%.
Among the big banks, Bank of America and Wells Fargo fell 3.3% at the close, Citi fell 3%, J.P. Morgan fell about 2.6%, Morgan Stanley fell nearly 1.4%, and Goldman Sachs fell 1.1%. Furthermore, asset management giant Schwab SCHW (SCHW) closed down 5.4% after Barclays drastically lowered its target price by nearly 23% to $61 due to concerns about its recent profits due to the impact of the Bank's collapse in Silicon Valley.
Chip stocks generally followed the general market and turned down in midday trading and failed to close up for three consecutive days. The Philadelphia Semiconductor Index and the semiconductor industry ETF SOXX closed down about 0.9% and 1%, respectively. However, after the ChatGPT dedicated GPU was announced at the annual developer conference on Tuesday, and the reasoning speed increased tenfold, Nvidia rose more than 5% during the time it set a new daily high after the Federal Reserve's decision. After the market turned down, it took back most of its gains and closed up about 1%.
Leading technology stocks fell sharply in midday trading and failed to close higher. On Tuesday, Tesla, which rebounded to its highest level since March 3, closed down nearly 3.3%. Among the six major FAANMG technology stocks, Netflix closed down about 3.9%, falling to a low since March 13; Amazon, which rebounded to a high level since February 15 on Tuesday, closed down 1.9%; on Tuesday, Google's parent company Alphabet, which rebounded to a high level since February 7, fell nearly 1.5%; after two consecutive days of gains on Tuesday, approaching the high of Facebook parent company Meta since May 5 last year, closed down nearly 1.2%; two consecutive days of gains on Tuesday, continuing to set a new high since September 12 last year, ending Apple's decline of 0.9% on Tuesday. The one that fell Microsoft fell more than 0.5% and failed to get close to the high it set last Friday since August 19 last year.
Among the individual stocks that published financial reports, Game Station (GME), which recorded quarterly profit for the first time in two years, closed 35.3%; discount retailer Ollie's Bargain Outlet (OLLI), which had higher earnings and revenue than expected in the fourth quarter, closed 9.8%; while pet products retailer Petco Health and Wellness (WOOF), which had lower quarterly EPS earnings than expected, fell 17.5%; earnings and revenue for the fourth quarter were better than expected, but sales in China fell short of expectations, and high inventories continued to hurt profits ) It closed down 4.9%.
Among other highly volatile individual stocks, the autonomous vehicle software company Luminar Technologies (LAZR) closed down nearly 14.6% after Goldman Sachs downgraded its rating from neutral to selling, and the stock price was expected to fall 35% from Tuesday's closing. Meanwhile, after the media said it would raise funds through a $200 million investment deal this week, Virgin Orbit (VORB), a small satellite launch company under the Virgin Group, rose 33.1%; encouraged by Truist to buy, optimistic about overseas foreign exchange earnings, and cooperation with McDonald's Donut chain Krispy Kreme (DNUT) closed up nearly 6.3% after future physical store sales.
Popular Chinese securities generally followed the market's decline, and the Nasdaq Golden Dragon China Index (HXC) closed down 1.7%. China Securities ETFs KWEB and CQQQ closed down about 0.8% and 0.4%, respectively. Among the four constituent stocks of the NASDAQ 100 Index, Pinduoduo fell more than 4%, JD fell more than 2%, Baidu fell 2%, and NetEase fell more than 1%. Among other individual stocks, Century Internet fell more than 11%, Shell fell more than 4%, NIO Auto fell nearly 2%, Xiaopeng Motor fell more than 2%, Ideal Auto and Station B fell more than 1%, and Alibaba fell less than 0.1%, while Tencent's fan orders, which resumed positive revenue growth in the fourth quarter, rose about 1.9%, Tencent Music rose nearly 0.6%, and Weibo rose more than 3%.
On the European stock side, the pan-European stock index, which closed before the Federal Reserve announced its decision, rose for three consecutive days, far less than Tuesday. The European Stoxx 600 Index, which rose more than 1.3% on Tuesday, closed up 0.15%, reaching a new high since last Tuesday for the second day in a row. The stock indexes of major European countries had mixed ups and downs on Wednesday. German, French, and British stocks rose for three days in a row, and the Italian and Spanish stock indexes stalled two consecutive days. Among the various sectors, ten closed higher on Wednesday, with food products rising more than 1.3% leading the way. Among the nine sectors that closed down, real estate fell about 3.8% and led the decline, far exceeding other sectors. Financial services, where Credit Suisse is located, fell close to 1.1%.
Among individual stocks, Swiss-listed Credit Suisse European Stock (CSGN), which rose more than 7% on Tuesday, closed down nearly 6%, taking back most of the gains that rebounded on Tuesday, close to the historic low set on Monday; UBS European stocks, which surged 12% on Tuesday, closed down 3.7%.
The decline in US bond yields accelerated after the Federal Reserve's decision, and the 2-year yield, which hit a one-week high, once fell back more than 30 basis points
Concerns related to the banking industry have abated, and ECB official and Bundesbank Governor Joachim Nagel once again spoke out, saying that inflation must be boldly and resolutely curbed. To combat high inflation, policymakers must be “stubborn” and continue to raise interest rates. The ECB's chief economist Philip Lane also said that concerns about the banking crisis may end up being trivial. European treasury bond prices continued to decline collectively, and yields rose further.
The yield on British 10-year benchmark treasury bonds closed at 3.44%, rising 8 basis points during the day, far from the low since February 6 set when it broke 3.14% on Monday; the benchmark 10-year German treasury bond yield, which rose 17 basis points on Tuesday, rose 4 basis points during the day, and rose above 2.39% in European stocks, a new high since last Wednesday, March 15; rising 26 basis points on Tuesday, the 2-year German bond yield, the biggest daily increase since September 2008, closed 2.68%, rising 9 basis points during the day. European stocks were close to rising 9 basis points during the day 2.77%, which is also the highest since March 15 A new high.
The yield on 2-year US Treasury bonds, which are more sensitive to interest rate prospects, rose above 4.20% in European stocks in the early trading session. US stocks were tested 4.26% in early trading, hitting a new high since last Wednesday, March 15, and then quickly fell below 4.20%. US stocks continued to decline after the announcement of the Federal Reserve's decision in midday trading. After Yellen's speech, the end of the session reached a fresh daily low of 3.91%, falling back more than 34 basis points from the daily high, falling back to the intraday level of about 3.94% at the end of the day, falling back to about 23 basis points during the day. The biggest day since 2009/6, when it rose nearly 21 basis points on Tuesday Increase rate.
The yield on US 10-year benchmark treasury bonds rose above 3.64% in the European stock market, reaching a new high since March 15, rising more than 3 basis points during the day. Since then, US stocks have taken back all gains and retreated. US stocks fell 3.60% in early trading, fell 3.46% at the end of the session to a new daily low, falling nearly 16 basis points from the intraday high, falling nearly 19 basis points from the intraday high. By the time US stocks closed, it was about 3.43%, down about 18 basis points during the day.
The US dollar index dived to a new low of more than six weeks after the Federal Reserve's decision, and Bitcoin stayed away from the nine-month high
The ICE dollar index (DXY), which tracks the exchange rate of six major currencies, including the dollar against the euro, reached a new daily high in the Asian market, close to 103.30. It rose slightly during the day. After the announcement of the Federal Reserve's decision at noon, the intraday decline intensified and widened. Since then, Powell once fell below 102.10 during the press conference, hitting an intraday low since February 3, falling nearly 1.2% during the intraday period.
By the close of the US stock market on Wednesday, the US dollar index was below 102.50, falling more than 0.7% during the day; the Bloomberg Dollar Spot Index, which tracks the exchange rate of the US dollar against ten other currencies, fell more than 0.5% to the lowest level since February 3. Both the US dollar index and the US dollar index fell for five consecutive days.
The offshore renminbi (CNH) hit a new intraday low of 6.8942 against European stocks. U.S. stocks rebounded at an accelerated pace, supported by the weakening dollar during the intraday session. It rose to 6.8433 in midday trading, a new intraday high since the March 13 report of 6.8317. At 5:59 Beijing time on March 23, Beijing time, the offshore renminbi was reported at 6.8607 yuan against the US dollar, up 158 points from the end of Tuesday's session in New York, to smooth out Tuesday's decline in Lianyang.
Risky cryptocurrencies dived intraday like US stocks. Bitcoin (BTC) rose above 28,800 US dollars in early trading. Following the second day of the week after Monday, it hit a new intraday high since June last year. Powell's press conference and Yellen's testimony plummeted. At the end of the session, US stocks fell below 26,600 US dollars to a new daily low, falling more than 2,200 US dollars, falling nearly 8% from the daily high. US stocks rose back 27,000 US dollars after closing, falling more than 2% in the last 24 hours.
Crude oil rose three times in a row to a one-week high, US gas fell more than 7% to a two-and-a-half-year low
International crude oil futures rebounded for the third day in a row, continuing to break away from the low since December 2021 set last Friday. During the early trading session of US stocks, US crude oil inventories announced by the Energy Information Administration (EIA) under the US Department of Energy last week that US crude oil inventories increased by more than 1.11 million barrels over the previous week, while gasoline inventories fell sharply by nearly 6.4 million barrels last week, supporting higher oil prices. The softening of the wording of the interest rate hike guidelines in the Federal Reserve's decision during the midday trading session also boosted oil prices.
US WTI April crude oil futures closed up 1.57 US dollars, or 2.26%, to 70.90 US dollars/barrel; Brent's May crude oil futures closed up 1.37 US dollars, or 1.82%, to 76.69 US dollars/barrel. Both US oil and US oil hit new closing highs since last Tuesday, March 14.
European natural gas, which rebounded sharply on Tuesday, fell on the third day of the last four trading days, falling to the low of more than a year and a half set on Monday. British gas futures, which closed up nearly 9.5% on Tuesday, closed down 5.47% to 97.72 pence per kilocalorie, starting close to the closing low since 2011/7 set this Monday; Dutch gas futures, the TTF benchmark for mainland Europe, which closed 7.82% on Tuesday, closed down 5.72% to 39.974 Euros/MWH, close to the closing low since July 2021 set on Monday.
The rise and fall of US gasoline and gas futures were mixed. NYMEX April gasoline futures closed up 2.1% to 2.5932 US dollars/gallon, rising for three consecutive days, a new high since March 10; NYMEX April gas futures closed down 7.54% to 2.1710 US dollars/million British thermal units, reversing two consecutive declines on Tuesday, hitting a new low since September 2020.
Luntong and Wulian Yang hit another week of new Gaolun nickel hit a new low of more than four and a half months after the Federal Reserve's decision, gold once rose more than 2%
London basic metals futures were mostly up on Wednesday. Renxi, the leader, rose more than 1.5% and rose for four consecutive days, closing close to 23,400 US dollars for the first time in two weeks. Luntong rose nearly 1.5%, rising for five consecutive days, closing close to 8,900 US dollars for the first time since last Monday. Lunnian and Lunlium both rebounded. Lunlead was close to the two-week high set on Monday, and Lunlead broke out of the low level since the beginning of January set by Tuesday's decline. Rhubarb stopped falling twice in a row and did not continue to approach the low set last Thursday since late November last year.
However, Lunnickel fell slightly, falling for three days in a row, closing below 22,500 US dollars, hitting a new low since the end of October last year for the second day in a row.
New York gold futures, which fell sharply on Tuesday, rebounded. On Wednesday, COMEX April gold futures closed up 0.44% to $194.60 per ounce, failing to balance the decline that had stopped two consecutive gains on Tuesday. The 2.1% decline on Tuesday was the biggest daily decline since February 3. After futures closed, as the dollar decline in US stocks widened during midday trading, the price of gold rose intraday. At one point it rose above 1980 US dollars to 1982.3 US dollars, and the intraday increase increased to more than 2.1%.
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