Dow's Biggest Drop This Month; Nvidia Soars 7% Post-Earnings; Metals, Oil Slide

The Federal Reserve's meeting minutes revealed a hawkish stance. The minutes indicated that due to poor inflation data in the first quarter, Fed officials anticipated needing to wait longer than previously expected to gain confidence in inflation returning to target levels, suggesting that they are not in a hurry to cut interest rates and that high rates will be maintained for a longer period. Several officials also expressed a willingness to raise interest rates further if inflation reignites. Nick Timiraos, known as the "new Fed mouthpiece," stated that Fed officials expected a longer wait for rate cuts, with some being open to the possibility of raising rates if inflation accelerates.

Following the release of the Fed minutes, the minor fluctuations in major U.S. stock indices quickly widened into losses, with resource stocks such as oil leading the decline. The Dow Jones Industrial Average posted its worst performance of the month, giving up a week's gains. U.S. Treasury prices fell, and yields accelerated, with the two-year Treasury yield, sensitive to interest rates, reaching a daily high. The U.S. dollar index rose to a one-week high, erasing losses since the announcement of slower April CPI growth in the U.S. last Wednesday.

Advertisement

Leading stocks releasing earnings showed mixed performance: Target, Walmart's archrival, reported earnings per share (EPS) below expectations for the first time since November 2022. The company's management mentioned a trend of weaker consumer spending on discretionary goods. Target, which announced a price reduction on 5,000 items on Monday, raised investor concerns about overall consumer health, causing shares to plummet by 10% at one point. NVIDIA, referred to by Goldman Sachs traders as "the most important stock on the planet," announced a 260% increase in first-quarter revenue after the bell, exceeding expectations again and signaling a booming AI demand, which bolstered investor confidence in the prospects of the AI craze, the main driver of U.S. stock market gains. The stock, which closed slightly down, rose in after-hours trading.

Google, which recently set new historical highs, and Tesla, which rebounded significantly on Tuesday, fell back, while some tech giants continued to rise. Microsoft, which released a suite of new AI features for Copilot at its annual developer conference on Tuesday, maintained its upward trend for the week, setting a new historical high. Most Chinese concept stocks fell, while Pinduoduo, which saw a twofold increase in net profit and a 131% increase in revenue year-on-year in the first quarter, initially rose by nearly 8% but later gave up most of its gains. Solar energy stocks followed the surge in the A-share solar energy sector, rising by more than 10%.

In the foreign exchange market, the UK's April CPI growth slowdown was less than expected, leading the market to reduce expectations for a rate cut by the Bank of England. Goldman Sachs pushed back its expected rate cut from June to August, and the pound sterling rose to a two-month high against the U.S. dollar. After the release of the Fed minutes, as the dollar accelerated upward, the pound gave up most of its gains, and other major non-U.S. currencies fell. The offshore renminbi breached 7.25 for the first time in three weeks, and Bitcoin's gains narrowed, falling below the 70,000 mark. Ethereum, which had surged due to market hopes for the approval of related ETFs by the U.S. SEC, also saw its gains narrow, with the upward momentum significantly receding from the previous two days of double-digit increases.

In commodities, metals fell across the board. Copper on the London Metal Exchange closed down more than 4%, continuing to fall from the closing record high set on Monday. New York copper futures, which had been setting historical highs for several days, fell sharply, with a drop of more than 6% at one point. Analysts believe that, in addition to the Fed's potential delay in cutting rates, the sharp drop in copper prices may be related to investors taking profits after reaching new highs, recent weak demand, and the possibility of increased production in Peru, the world's third-largest copper producer, this year. The Fed minutes dampened the prospects for rate cuts, and gold's losses widened, falling nearly 2% at one point, accelerating away from the historical high set on Monday.

International crude oil continued the downward trend of the first two days of the week, falling more than 1% to a one-week low. However, the U.S. Department of Energy reported that last week's EIA crude oil inventory increase was lower than expected, which was a positive for the supply side. Additionally, last week's gasoline demand exceeded the 2022 seasonal level for the first time in over a month. After the EIA data release, crude oil narrowed its losses by more than half and reached a daily high. The prospects for a rate cut that could stimulate oil market demand were damaged, and after the release of the Fed minutes, the crude oil losses expanded again, with U.S. oil刷新盘中一周低位, and Brent crude fell nearly 2%.

The S&P, Nasdaq, and Google fell from record highs, while Microsoft reached a new high again. After earnings, Target plummeted, and Pinduoduo surged and then fell back. Chinese solar stocks rose more than 10%.

The three major U.S. stock indices fluctuated slightly at the opening. The Dow Jones Industrial Average, which opened slightly lower, and the S&P 500, which fell 0.1% at the beginning of the session, turned slightly positive more than once in the morning, then the S&P fell slightly, and the Dow fell more than 70 points, nearly 0.2%, in the morning. The Nasdaq Composite, which opened slightly higher, rose more than 0.1% in the morning, then turned negative and fell slightly in the afternoon. After the release of the Fed minutes in the afternoon, the three indices' losses quickly widened and reached a daily low, with the Nasdaq falling more than 0.7%, the S&P falling nearly 0.7%, and the Dow falling more than 310 points, nearly 0.8%.

In the end, the three major indices closed lower collectively for the first time this week. The Dow, which rebounded on Tuesday, fell 201.95 points, a drop of 0.51%, the largest daily drop since April 30, closing at 39671.04 points, the lowest closing level since May 14. The S&P, which had risen for three consecutive days on Tuesday to set a new closing high, fell 0.27%, closing at 5307.01 points. The Nasdaq, which had set a new historical high for two consecutive days, fell 0.18%, closing at 16801.54 points.S&P and Dow-related ETFs SPDR S&P 500 ETF (SPY) and SPDR Dow Jones Industrial Average ETF (DIA) respectively closed down by 0.23% and 0.53%, with the former falling from a record high and the latter hitting a new low since May 14th.

The small-cap index dominated by value stocks, Russell 2000, fell by 0.79%, underperforming the broader market for two consecutive days and reaching a low not seen since May 13th. The technology-heavy Nasdaq 100 Index closed down by 0.05%, with the related ETF Invesco QQQ Trust Series 1 (QQQ) closing down by 0.02%. The Nasdaq Technology Dividend Index (NDXTMC), which measures the performance of technology stocks in the Nasdaq 100 Index, essentially closed flat, both stabilizing at the historical closing highs set over the past two days.

Among Dow components, Dow Chemical, which fell by more than 2%, led the decline, followed by Goldman Sachs and Amgen, both down by 1.7%. 3M, which had led the decline on Tuesday with a drop of nearly 2%, fell by 1.6%, and oil and gas giant Chevron fell by 1.5%. In the S&P 500 sectors, only healthcare, industrials, and IT, where Nvidia is located, closed higher, with gains not exceeding 0.2%. Cyclical stocks in the energy sector fell by more than 1.8%, leading the decline, while the defensive sector of utilities fell by nearly 1.2%, and materials fell by about 1%.

Including tech giants such as Microsoft, Apple, Nvidia, Google's parent Alphabet, Amazon, Meta (Facebook's parent), and Tesla, the "Seven Sisters" showed mixed performance in the early market. Tesla, which opened lower, fell nearly 4.5% at midday and closed down nearly 3.5%, moving away from the closing high on Tuesday, which was the highest since April 29th following a strong rebound of nearly 6.7%.

Among the FAANMG group of tech stocks, Apple, which had been rising for seven days to reach a closing high not seen since January 26th, turned slightly positive by more than 0.2% in the early market before turning negative, closing down nearly 0.8%. Alphabet, which had also been rising for seven days, closed down by 0.8%, bidding farewell to the record closing highs it had been setting for five consecutive days. Netflix, which had been rising for three days and repeatedly setting new closing highs not seen since November 2021, closed down by nearly 1.6%. Microsoft, which turned negative at midday, turned positive at the end of the day, closing up by more than 0.3%, setting a new historical closing high for two consecutive days. Meta, which had been falling for four days to a low not seen since May 3rd, rose by more than 1% in the early market and closed up by nearly 0.7%. Amazon, which had been falling for two days to a closing low not seen since May 1st, essentially closed flat.

Semiconductor stocks generally rebounded, with the Philadelphia Semiconductor Index and the semiconductor industry ETF SOXX closing up by about 1% and 1.2%, respectively,刷新 Monday's closing highs set since March 7th. Among semiconductor stocks, Nvidia, which was due to report earnings after the market closed, initially rose by nearly 0.7% before quickly turning negative, falling by nearly 1.3% in the morning, and closing down by nearly 0.5%. After reporting earnings, it quickly jumped, with after-hours gains once expanding to more than 7%, and for the first time in history, its stock price broke through the $1,000 mark. Analog Devices (ADI), which reported second-quarter revenue and earnings that exceeded expectations, closed up by 10.9%. At the close, TSMC's US-listed shares rose by more than 1%, Qualcomm rose by 1%, AMD rose by 0.5%, while Intel fell by 1%, Micron Technology fell by nearly 1%, and Broadcom fell by 0.5%.

Most popular Chinese concept stocks continued to decline. The NASDAQ Golden Dragon China Index (HXC) initially turned positive before maintaining its downward trend, closing down by nearly 1.2%. The related ETF Invesco Golden Dragon China ETF (PGJ) also closed down by 1.2%, both falling for three consecutive days and hitting new closing lows not seen since May 10th. Chinese concept ETFs KWEB and CQQQ closed down by 1.3% and 0.3%, respectively.

Solar stocks generally rose, with Daqo New Energy, Jinko Energy, and Canadian Solar closing up by more than 17%, 17%, and nearly 15%, respectively. New forces in car manufacturing all fell, with Zeekr falling by 2%, Li Auto down by 0.9%, which has been declining since releasing its financial report on Monday, NIO fell by nearly 0.2%, and XPeng Motors, which had risen by nearly 2.9% at the beginning of Tuesday after releasing its financial report and closed up by 6%, turned negative in the morning and fell by 1.8% during the day, closing down by more than 0.2%. Among other stocks, Pinduoduo, which released its financial report before the market opened, initially rose by nearly 7.6% and closed up by 1.1%, with its market value still exceeding Alibaba. At the close, Alibaba fell by 4%, Baidu fell by more than 2%, JD.com fell by nearly 2%, Tencent's pink sheet fell by nearly 0.9%, NetEase fell by nearly 0.6%, and Bilibili rose by nearly 1%.

AI concept stocks generally continued to decline, underperforming the broader market. The AI and robotics stock ETF Glb X Robotics & Artificial Intelligence ETF (BOTZ) closed down by 1.1%. At the close, Super Micro Computer (SMCI) fell by nearly 2.9%, C3.ai (AI) fell by nearly 4.9%, SoundHound.ai (SOUN) fell by nearly 1%, and BigBear.ai (BBAI) fell by 3.2%.

Retail investor group stocks showed mixed performance, with GameStop (GME) closing down by 4.5%, falling by more than 4% for the second consecutive day, erasing most of the gains from the surge on Monday and Tuesday following the "retail investor leader" Roaring Kitty's implied heavy betting; AMC Entertainment (AMC), which fell by 3.7% on Tuesday, closed up by 8.8%.Among individual stocks releasing earnings reports, Target (TGT), which reported first-quarter revenue slightly above expectations but a 3% year-over-year decline, and EPS earnings below expectations, initially fell by 10.1%, marking the largest intraday drop since November 2022, and closed down 8%. Urban Outfitters (URBN), a fast-fashion company specializing in clothing and apparel, reported first-quarter profits and revenue below expectations, and its同名 brand's sales declined by 12.5%, resulting in a 4.6% drop at the close. VF Corp (VFC), a company in the apparel and footwear sector, reported quarterly revenue below expectations and a surprise EPS loss, leading to a post-market drop of over 10%. In contrast, LiveRamp Holdings (RAMP), an advertising technology company, reported better-than-expected fourth-quarter results and strong guidance for the current quarter and full year, causing a nearly 20% increase in its stock price after hours. Snowflake (SNOW), a cloud computing company, saw its stock price rise by more than 5% after hours, as its first-quarter revenue exceeded expectations.

In terms of European stocks, the pan-European equity index fell for two consecutive days. The Stoxx Europe 600 index reached its lowest closing level since May 13th. Major European stock indices continued to decline on Wednesday, with German, French, British, and Spanish stocks falling for two days in a row, and the Italian index falling for four consecutive days.

Among various sectors, the automotive sector closed down nearly 1.4%, having dropped more than 2% at one point during the trading session. Among the constituents, BMW and Mercedes-Benz, listed in Germany, closed down 1.7% and nearly 1.6%, respectively. Commentators suggested that automotive stocks were primarily affected by the potential increase in import tariffs on cars by China. An exclusive interview article in the Global Times on Tuesday quoted Liu Bin, the chief expert at the China Automotive Technology and Research Center, stating that according to WTO rules, China could raise the temporary tariff rate on imported cars to a maximum of 25%.

After the release of the Federal Reserve minutes, the two-year U.S. Treasury yield reached a daily high.

The iShares U.S. Treasury Bond ETF (GOVT) closed slightly lower, failing to continue the rebound that ended a three-day losing streak on Tuesday. The yield on the 10-year U.S. benchmark Treasury note approached 4.46% before the U.S. stock market opened, reaching its highest level since May 14th, before giving up gains. After the release of the Federal Reserve minutes, it recovered from below 4.42% to above 4.43% during the U.S. stock market's midday trading, and was around 4.42% at the end of the bond market, up about 1 basis point for the day.

The two-year U.S. Treasury yield, which is more sensitive to interest rate prospects, was below 4.84% in the early Asian session before generally trending upwards. After the release of the Federal Reserve minutes, the increase quickly expanded, approaching 4.88% at one point, and was around 4.87% at the end of the bond market, up more than 4 basis points for the day, with other maturities of U.S. Treasuries generally falling after stopping a three-day rise on Tuesday.

After the release of the Federal Reserve minutes, the U.S. Dollar Index (DXY), which tracks the value of the dollar against a basket of six major currencies including the euro, fell below 104.60 during the Asian session to reach a daily low, down nearly 0.1% for the day. It turned positive after the European stock market opened and maintained its upward trend. After the release of the Federal Reserve meeting minutes, the increase rapidly expanded, approaching 105.00 during the U.S. stock market's midday trading, reaching its highest level since May 15th, the day the U.S. April CPI was announced, up nearly 0.3% for the day.

By the close of the U.S. stock market on Wednesday, the U.S. Dollar Index was above 104.90, up nearly 0.3% for the day; the Bloomberg Dollar Spot Index, which tracks the value of the dollar against ten other currencies, was up nearly 0.3% for the day, reaching its highest level since May 14th for the same period, and both the U.S. Dollar Index and the Bloomberg Dollar Spot Index have risen for three consecutive days.

Among non-U.S. currencies, after the release of the UK CPI, the British pound rose against the dollar, breaking 1.2760 before the European stock market opened, reaching its highest level since March 21st, up more than 0.4% for the day, before falling back. During the European stock market session, it briefly turned negative, testing 1.2700 to reach a daily low, and then rose back above 1.2750 during the U.S. stock market's midday trading. After the release of the Federal Reserve minutes, it gave up most of its gains, closing below 1.2720, up less than 0.1% for the day. After the release of the Federal Reserve minutes, the euro fell against the dollar, breaking 1.0820 during the midday trading to reach its lowest level since May 15th, down more than 0.3% for the day. The Japanese yen, which rebounded on Tuesday, fell back, and the dollar rose against the yen, accelerating after the release of the Federal Reserve minutes, approaching 156.80 at the end of the currency market, reaching its highest level since May 2nd, up nearly 0.4% for the day.The offshore Chinese yuan (CNH) against the US dollar hit a daily high of 7.2446 in the early Asian market, and then generally maintained a downward trend, falling to 7.2561 after the US stock market closed,刷新ing the intraday low since April 30. At 4:59 AM Beijing time on May 23, the offshore Chinese yuan against the US dollar was reported at 7.2542 yuan, down 73 points from Tuesday's New York close, and fell back after stopping the three consecutive days of decline on Tuesday.

Bitcoin (BTC) broke below $69,300 during the Asian market to hit a daily low, and then regained the $70,000 mark in the early US stock market. It once broke through $70,600 during the trading day to hit a daily high, rebounding by more than $1,000 and rising by about 2% from the daily low. It had already fallen below $70,000 before the release of the Federal Reserve minutes, and further gave up gains after the minutes were announced, once breaking below $69,300 and approaching the daily low. At the close of the US stock market, it was above $69,700, with a recent 24-hour increase of about 0.4%, and some platforms increased by nearly 0.7%, failing to approach the high of $71,900 broken through on Tuesday,刷新ing the high since April 8.

The second-largest cryptocurrency, Ethereum (ETH), which had seen double-digit gains for two consecutive days, showed a clear slowdown in its rise. After turning bearish during the European stock market and once falling below $3,660 to hit a daily low, it turned bullish in the early US stock market and once approached $3,800 at noon. After the Federal Reserve minutes, it gave up some gains, and at the close of the US stock market, it was close to $3,750, with a recent 24-hour increase of about 0.5%, and some platforms increased by about 1%, detaching from the high of $3,840 tested on Tuesday,刷新ing the high since March 15.

Crude oil fell for three consecutive days, and after the Federal Reserve minutes, it fell nearly 2% during the trading day. International crude oil futures maintained a downward trend throughout Wednesday. When the European market refreshed the intraday low since the previous Wednesday, May 15, US WTI crude oil broke below $77.40, falling nearly 1.7% during the day, and Brent crude oil broke below $81.60, falling nearly 1.6% during the day. After the release of US EIA data in the early US stock market, the crude oil decline narrowed, and when the US stock market refreshed the daily high, US oil regained $78.40, and Brent oil regained $82.60, both falling 0.3% during the day.

By the close, crude oil fell for three consecutive days after three consecutive days of gains. WTI July crude oil futures closed down $1.09, a drop of more than 1.38%, at $77.57 a barrel. Brent July crude oil futures closed down $0.98, a drop of more than 1.18%, at $81.90 a barrel.

After the close, following the release of the Federal Reserve minutes, the crude oil decline widened. US oil and stocks once broke below $77.30 during the lunch break, continuing to refresh the intraday low since May 15, falling nearly 1.8% during the day, and Brent oil once fell below $86.70, approaching the daily low.

The US oil ETF, United States Oil Fund LP (USO), closed down 1.7%, and the Brent oil ETF, United Sttes Brent Oil Fund LP (BNO), closed down 1.5%, both falling for three consecutive days to the lowest level since March 12.

London copper and nickel fell more than 4%, with New York copper, which had been setting new historical highs, once falling more than 6%. After the Federal Reserve minutes, gold fell nearly 2%. London base metal futures closed lower across the board on Wednesday. Leading the decline, London nickel fell 4.4%, and London copper also fell more than 4%, both falling for two consecutive days after four consecutive days of gains, leaving their respective highs since last August and record highs. London lead fell more than 3%, and London tin fell more than 2%, both continuing to fall from their respective highs since Monday in April 2022 and late April this year. London aluminum, which had risen for two consecutive days to a high since June 2022 on Tuesday, fell more than 3%. London zinc, which had risen for three consecutive days to a high since February last year, fell more than 2%.New York futures copper, which had been rising for three consecutive days, turned down after the early market on Wednesday and maintained its downward trend. COMEX July copper futures closed down by 5.04%, at $4.8485 per pound. After bidding farewell to the historical closing high that had been refreshed for three consecutive days, the US stock market once fell below $4.7920 to refresh the daily low, with a daily drop of nearly 6.2%. The US Copper Index Fund (CPER) closed down by 5.8%, falling to a low since May 13th after three consecutive days of rising to a record high.

Gold, after turning down in the early market on Wednesday, maintained its downward trend. When the US stock market refreshed the daily low during the early trading, New York gold futures fell to $2385.30, with a daily drop of nearly 1.7%, and spot gold approached $2382.30, with a daily drop of nearly 1.6%. By the time of the US stock market's midday closing, COMEX June gold futures closed down by 1.36%, at $2392.9 per ounce, continuing to fall for two consecutive days and moving further away from the historical closing high that had been refreshed for two consecutive days as of Monday.

After the release of the Federal Reserve minutes during the US stock market's midday trading, the gold price drop widened. Futures gold once fell to $2378 after the market, nearly 2% lower than Tuesday's closing, and spot gold fell below $2376, with a daily drop of nearly 1.9%, erasing all gains for the week.

SPDR Gold Trust (GLD) closed down by 1.84%, continuing to fall after setting a historical high on Monday. At the close of the US stock market, spot gold hovered around $2380, with a daily drop of about 1.7%.

New York futures silver fell for two consecutive days after five consecutive rises. COMEX July silver futures closed down by 1.8%, at $31.496 per ounce, continuing to fall away from the closing high since Tuesday, which had been the highest since 2013 for four consecutive days. The iShares Silver Trust SLV, which had been rising for three consecutive days and continuously setting new highs since 2013, closed down by 3.6%.