Source: Wall Street News
Authors: Li Dan, Fang Jiayao

After the minutes of the Federal Reserve meeting suggest that Fed policymakers will have to wait longer to consider cutting interest rates, recent data has thrown cold water on the market's expectations of interest rate cuts. The initial value of the US composite PMI for May announced by S&P Global rose to 54.4, showing the fastest expansion of corporate activity in more than two years. At the same time, the sub-index showed rising prices and rising inflation: the composite PMI input price index hit the second highest level since September last year. Factory input prices rose at the fastest rate in a year and a half, and service provider payment prices and acceptance prices also rose.

After the data was released, the price of US Treasury bonds dived and yields rose intraday. The yield on two-year US Treasury bonds, which are sensitive to interest rates, quickly reached 4.90%, and once rebounded nearly 10 basis points from a daily low; the US dollar index rebounded at an intraday level and hit a new high of more than a week, exceeding the level before the US April CPI, which fueled expectations of interest rate cuts; the gains of major US stock indexes quickly subsided and turned intraday. The Dow has never fallen so sharply since the US banking crisis compounded the Federal Reserve's interest rate hike in late March last year.

Nvidia, the king of AI chips, lived up to expectations. The results for the first fiscal quarter and the current fiscal quarter once again surged by three digits, but failed to boost the market as much as they did after the release of the previous quarterly report. Among the tech giants “Seven Sisters,” Nvidia is the only one that has not declined. The chip stock index turned down during the intraday period, and Intel and executives hinted that Boeing, which “burns money” this year and is recovering slowly in aircraft deliveries, joined forces to become the culprits of the Dow's decline. On Thursday, the US stock market was like Nvidia's “alone beauty” show.

Nvidia's performance shows that AI computing spending is still strong. CEO Huang Renxun said that the strongest chip, Blackwell, will be delivered in the second quarter and will bring in a large amount of revenue this year. The stock price rose by more than 10% in the intraday period, surpassing the total market capitalization of German listed companies, driving many AI concept stocks to soar in early trading. Dell, which is known by Huang Renxun as Nvidia's key partner in promoting AI infrastructure, has generally declined. Most of them have declined, including Nvidia's rival AMD, AI's key “seller” Broadcom, and AI, which is growing nearly 200% this year Stock” Ultramicrocomputer.

Most of China Securities continued to fall. China Securities, which published financial reports, were not spared, including NetEase, which had 7.2% year-on-year revenue growth in the first quarter, and Station B, where revenue in the first quarter exceeded expectations by 12% and net loss increased by more than 21%; Seashell, which saw a sharp decline in revenue and profit in the first quarter; Weibo, which declined by more than 5%, then fell by more than 5%, while Pinduoduo surged intraday after announcing its earnings report on Wednesday. According to the media, Alibaba is considering issuing 5 billion US dollars of convertible bonds, and Alibaba has surpassed 3% of the market.

In the foreign exchange market, when the US dollar turned higher after the PMI was announced, non-US currencies turned down in the middle of the day. The yen and offshore renminbi fell to low levels for more than three weeks, and the pound fell from the two-month high set on Wednesday when the British CPI hit expectations of interest rate cuts. Cryptocurrency such as Bitcoin also declined, while Ethereum hit a new intraday high of more than two months before turning down. The US Securities Regulatory Commission SEC approved several exchanges' proposals to trade Ethereum spot ETF products, paving the way for the ETF to go public. After approval by the SEC, Ethereum, which had fallen by more than 1% in the intraday period, turned upward.

Among commodities, when the US dollar rebounded, metals were under downward pressure. However, the decline in industrial metals such as copper was moderated from Wednesday. The prospect of delayed interest rate cuts hit gold even further. New York futures fell more than 2% intraday for the first time since data revived concerns about inflation at the end of April. The data worsens the prospects for the Federal Reserve to cut interest rates, and prolonged high interest rates will hurt demand in the oil market. International crude oil was an intraday roller coaster. European stocks failed to maintain their gains after the intraday rise. The US PMI continued to decline after the announcement, breaking a three-month low. After rising more than 1% in the intraday period, it fell by more than 1%.

However, gasoline demand announced by the US Department of Energy on Wednesday has risen to a high level since November last year, bringing some support to oil prices until the beginning of the peak summer driving season this weekend. Furthermore, Russia announced on Wednesday night that due to “technical reasons”, Russia's production in April exceeded OPEC+'s production quota and will soon submit a compensation plan for production cuts. Analysts believe that given the recent weakening of oil prices, the OPEC+ oil production decision meeting to be held on June 1 is more likely to maintain the current production reduction policy until at least the end of September.

The three major US stock indexes fell in unison during the intraday period, and only Nvidia closed up, the chip stock index turned up and fell during the intraday period, AI concept stocks surged and fell back down for the fourth time in a row

The three major US stock indexes collectively opened higher and declined rapidly after the US PMI data was released at the beginning of the session. The Dow Jones Industrial Average quickly fell after opening slightly higher than 20 points. It fell more than 1% in the midday session, and the decline widened to more than 600 points at the end of the session. The S&P 500 index rose nearly 0.7% at the beginning of the session. It turned down and fell by more than 0.1% in early trading. After a slight increase, it fell again in mid-day trading, falling more than 0.9%. The Nasdaq Composite Index rose nearly 1.2% at the beginning of the session and fell more than 0.7% after turning down in midday trading.

In the end, the three major indices closed down for two consecutive days. The Dow closed down 605.78 points, or 1.53%, the biggest percentage drop since March 22, 2023, to 39065.26 points, breaking the closing low since May 8. S&P closed down 0.74% to 5267.84 points, breaking the closing low since May 14. The NASDAQ closed down 0.39% to 16736.03 points, continuing to fall from the record high level of closing in a row until Monday and Tuesday.

The S&P and Dow related ETFs SPDR S&P 500 ETF (SPY) and SPDR Dow Jones Industrial Average ETF (DIA) closed down 0.73% and 1.51%, respectively, and the latter hit a new low since May 8.

The small-cap stock index Russell 2000, which is mainly value stocks, closed down 1.6%, outperforming the market for three consecutive days and falling to a low level since May 3. The tech-heavy Nasdaq 100 Index closed down 0.44%, and the related ETF Invesco QQQ Trust Series 1 (QQQ) closed down 0.45%, all continuing to fall below the historic closing high set on Tuesday. The Nasdaq Technology Market Capitalization Weighted Index (NDXTMC), which measures the performance of technology components in the Nasdaq 100 Index, closed up 0.45%, breaking the highest closing record set on Tuesday.

The Dow fell sharply intraday. After the CFO predicted negative cash flow this year and aircraft deliveries would not pick up month-on-month in the second quarter, Boeing closed down nearly 7.6%, while Intel fell more than 4%, ranking second in terms of decline. Among the major sectors of the S&P 500, Nvidia's IT alone closed up close to 0.6%. Of the ten sectors, with the exception of materials, which fell nearly 0.9%, other sectors fell at least 1%, leading the decline with real estate falling more than 2%.

Including Microsoft, Apple, Nvidia, Google's parent company Alphabet, Amazon, Facebook's parent company Meta, and Tesla, the tech giants “Seven Sisters” all closed down except Nvidia's external markets. Among them, Tesla, which had the worst performance, quickly turned down after rising about 1% at the beginning, closing down 3.5%, falling more than 3% for two consecutive days, smoothing the gains of Tuesday's big rebound, and falling to a low level since May 13.

Among FAANMG's six major technology stocks, the Microsoft market, which closed at record highs for two consecutive days, rose 0.7% at the beginning of the session and closed down 0.8% in midday trading; Apple quickly turned down 2.1% at the beginning of the market and fell 2.1%, falling for two days after rising seven consecutive days to January 26; Alphabet had a rise of nearly 1.1% at the beginning of the session, then closed down nearly 1.7% after falling in early trading, and continued to fall below the closing record high for five consecutive days until Tuesday; Meta, which had risen 1.4% at the beginning of the session, rebounded 0.4% on Wednesday It then began to fall to the low level since May 3, which was set on Tuesday; it rose at the beginning of the session Nearly 0.9% of Amazon quickly turned down, closing down 1.1%, breaking the closing low since May 1 after closing on Wednesday; Netflix turned slightly higher in early trading and then fell again in midday trading, closing down nearly 0.8%, falling for two consecutive days after breaking the closing high since November 2021 on Tuesday.

Chip stocks generally turned down during the intraday period and failed to continue their rebound on Wednesday. The Philadelphia Semiconductor Index and semiconductor industry ETF SOXX rose 2.5% and 2.4% respectively at the beginning of the session and turned down in midday trading, closing slightly and falling close to 0.6%, respectively, leaving the closing high since March 7 set on Wednesday. Among chip stocks, Nvidia opened up more than 7%, and rose more than 10% in early trading, and closed at an all-time high of 9.3%, closing above the $1,000 mark for the first time in history; it is expected that after the global semiconductor industry other than memory chips will increase revenue by 10% this year, TSMC's US stock rose nearly 3% in midday trading, then returned most of its gains; while AMD, which rose 4.6% at the beginning of the session, closed down more than 3% in early trading; Intel closed down 4.3% in early trading; Broadcom and early trading, which surpassed 2.6% Over 4% of Micron Technology declined in midday trading.

AI concept stocks surged higher and fell during the intraday period, and most of them closed down. AI and robotics stock ETF Glb X Robotics & AFL Intelligence ETF (BOTZ) rose more than 2% at the beginning of the session and rose slightly in midday trading. Dell (DELL) rose 10.1% in early trading, up nearly 4%, and BigBear.ai (BBAI), which rose nearly 8.7% at the beginning of the session, fell more than 1% in midday trading and closed up nearly 0.7%; while ultra-micro computers (SMCI) rose 11.3% at the beginning of the session and closed down 3% after falling in midday trading, C3.ai (AI) and SoundHound.AI (SOUN) turned down at the beginning of the session, closing down 3.8% and 1.6%, respectively. Palantir (PLTR), which rose nearly 1.7% at the beginning of the session, closed down more than 2%. data center Astera Labs (ALAB), an interconnected chip, rose nearly 4.8% at the beginning of the session and then turned down in early trading, closing down 4.2%.

Popular Chinese securities generally continued to decline. The low-opening Nasdaq Golden Dragon China Index (HXC) closed down 3.7%, and the related ETF Invesco Golden Dragon China ETF (PGJ) also fell 3.7%, and will continue to fall to a low level since May 1. KWEB and CQQQ closed down nearly 2.7% and 1.3%, respectively.

Among the Chinese securities that announced financial reports before the market, Station B fell 12.4%, Shell fell nearly 10%, NetEase fell 3.7%, and Weibo, which had risen more than 5% in early trading, fell 0.9%. Among the new car builders, NIO Auto, which fell about 10% in midday trading, closed down 8.4%; Xiaopeng Motors, which had fallen 9.7% in early trading, closed down 7.4%; Ideal Auto, which fell more than 6% in midday trading, closed down 5.7%; and Extreme Krypton, which had fallen nearly 3%, closed down 2.6% in early trading. Among other individual stocks, by the close, JD fell 4.5%, Alibaba fell more than 2%, Baidu fell nearly 1%, and Tencent fan fell 0.9%, while Pinduoduo, which surged during the intraday period after announcing its earnings report on Wednesday, had a rise of nearly 9% in early trading, closing up nearly 4.5%.

Among the individual stocks that announced financial reports, cloud computing company Snowflake (SNOW) closed down 5.4% despite higher than expected revenue for the first fiscal quarter; after announcing earnings guidance for the fourth fiscal quarter fell below expectations, Intuit (INTU), the company that developed the tax software TurboTax, fell 7% after the market; clothing and footwear company VF Corp (VFC), whose quarterly revenue was lower than expected and EPS profits unexpectedly reported losses, closed down 2.9%; while the fourth fiscal quarter results were better than expected, the advertising technology company LiverAMP, which had strong guidance for the current fiscal quarter and full year Holdings (RAMP) closed up 6%; footwear company Deckers Outdoor (DECK) rose 8% after the market, and discount department store Ross Stores (ROST) rose 7% after the market, after announcing higher than expected revenue and profit for the fourth fiscal quarter and the first quarter, respectively.

After the US PMI, US bond yields once rose nearly 10 basis points to a two-week high

The US Treasury Bond ETF Asus US Treasury Bond ETF (GOVT) closed down 0.24%, falling two days in a row to its lowest level since May 13. The yield on the US 10-year benchmark treasury bond dropped 4.40% before the US stock market. After the US PMI was announced, it quickly rose 4.48%, and US stocks rose 4.50% in early trading, breaking the high level since May 14. It rebounded more than 9 basis points from today's low. It was about 4.48% at the end of the bond market, and rose about 6 basis points during the day.

The yield on 2-year US Treasury bonds, which are more sensitive to interest rate prospects, fell 4.86% in early trading. After the US PMI was announced, it quickly rose 4.90% in early trading, breaking 4.95% in early trading, and rebounded nearly 10 basis points from the day's low. It was about 4.94% at the end of the bond market, rising about 7 basis points during the day, and generally rising for 2 consecutive days. This week only fell on Tuesday.

After the US PMI, the US dollar index rose and hit a new high of more than a week, Bitcoin fell more than $3,000 in the intraday period, and Ethereum fell after hitting a new high in February

The ICE dollar index (DXY), which tracks the exchange rate of the dollar against a basket of six major currencies, including the euro, fell below the daily low of 104.70 and fell nearly 0.3% during the day. After the US PMI was announced, the US stock market went straight ahead. US stocks turned up in early trading, rising above 105.10 in midday trading and rising nearly 0.2% during the day. Following Wednesday, when the US CPI for April was announced last Wednesday, May 15, it also hit a new high in the market since May 13.

By the end of the foreign exchange market on Thursday, the US dollar index was above 105.10, rising nearly 0.2% during the day; the Bloomberg US dollar spot index, which tracks the exchange rate of the US dollar against ten other currencies, rose about 0.1% during the day, breaking the high level in the same period since May 13, and the US dollar index both rose for four consecutive days.

Among non-US currencies, after the US PMI was announced, the pound quickly fell against the US dollar at the beginning of the US market, and the euro turned down in early trading. The pound fell below 1.2690 in the afternoon, falling below the high level since March 21, which was refreshed by 1.2760 after announcing the UK CPI on Wednesday. The euro fell 1.0800, breaking the low level since May 14; the Japanese yen turned down and fell for 2 days in a row. The US dollar rose to 157.20 in early trading, breaking the high level since May 1, and rising close to 0.3% during the day.

The offshore renminbi (CNH) rose to a new daily high of 7.2496 against the US dollar in the European stock market. After the US PMI was announced, it fell to 7.2596 in early trading. After hitting a new low since April 30 on Wednesday, it also set a new low since April 29, falling 100 points from the daily high. At 4:59 on May 24, Beijing time, the offshore renminbi reported 7.2578 yuan against the US dollar, down 36 points from the end of Wednesday's New York session.

Bitcoin (BTC) reached a new daily high of 70,000 US dollars in the European stock market in the short term and continued to decline after the US PMI was announced. US stocks fell below 66,800 US dollars in midday trading, and some platforms with slightly lower declines fell below 66,900 US dollars, breaking the low since May 20, falling more than $3,000 and nearly 5% from the daily high, far from the high since April 8, which was refreshed above $71,900 on Tuesday. US stocks hovered around $66,800 and fell more than 4% in the last 24 hours.

Meanwhile, Ethereum (ETH) continued to rise. European stocks rose above 3,940 US dollars in the intraday period, breaking the high level since March 14. After the US PMI was announced, it returned most of its gains, falling below 3,800 US dollars, and falling below 3,800 US dollars after closing, falling more than 6% from the daily high, falling more than 1% in the last 24 hours. After the US SEC approved revisions to the relevant rules for listing spot ETFs, Ethereum rapidly turned upward. At one point, it approached 3,890 US dollars, and the increase expanded to more than 1% within 24 hours.

Crude oil fell to a three-month low after rising more than 1% in four consecutive declines

International crude oil futures turned up in early trading in European stocks. At the beginning of the day, US WTI crude oil rose above $78.60 and rose 1.4% during the day. Brent crude oil surged $83 and rose 1.3% during the day. After the US PMI was announced, US stocks turned down in early trading. When midday trading refreshed their low level since February 26, US oil fell below $76.50 and fell nearly 1.5% during the day.

In the end, crude oil fell for four days in a row. WTI's July crude oil futures closed down $0.70, or 0.90%, to $76.87 per barrel; Brent crude oil futures for July closed down $0.54, or 0.66%, to $81.36 per barrel, and both hit three-month lows.

The US oil ETF United States Oil Fund LP (USO) closed down 0.55%, while the oil ETF United Sttes Brent Oil Fund LP (BNO) closed down 0.44%, all falling four times in a row until March 12.

Lunn nickel fell more than 1%, and New York futures fell three times in a row, and New York futures recorded the biggest decline this month

London basic metals futures mostly continued to fall on Thursday, but the decline was generally far less than Wednesday. Lunnickel, which fell 4.4% on Wednesday and led the decline, fell more than 1% to a one-week low, far from the high level set on Monday since August last year. It also fell for three consecutive days with Luntong, Lentong, Lead, and Lunxi. Luntong, which fell more than 4% on Wednesday, closed slightly, and Helun Lead continued to fall below the record highs they each set on Monday and the high since April 2022. Renxi hit a one-week low. Lun lead, which fell more than 3% on Wednesday, closed down less than 0.4%, continuing to fall from its high level since June 2022. Meanwhile, on Wednesday, lunzin, which fell to a high level since February last year, came to an end.

Gold opened lower and moved lower on Thursday, and its decline accelerated after the US PMI was announced. When US stocks hit a new low since May 9 in midday trading, spot gold fell below $2,331, down 2% during the day, while New York gold futures fell to $2332.4, down more than 2.5% during the day.

By the close of midday US stock futures, COMEX's June gold futures closed down 2.33%, continuing to fall by more than 2.3% after April 30, to reach 2337.2 US dollars/ounce, breaking the closing low since May 8, for three consecutive days. SPDR Gold Trust (GLD) closed down 2%, the lowest level since May 8 for two consecutive days. At the close of the US stock market, spot gold was below $2,332, falling nearly 2% during the day, and futures were far from the historical intraday high set on Monday.

Editor/Jeffy