U.S. Stocks Mixed As Powell Hints At Delayed Rate Cuts, Gold Hits New High

On Tuesday, the major U.S. indices closed mixed, with the Dow ending a six-day losing streak.

Treasury yields continued to rise, with the 10-year yield nearing 4.7%.

Federal Reserve Chair Jerome Powell suggested that persistent inflation might keep central bank rates high for an extended period. Fed Vice Chair Lael Brainard noted that holding rates steady could help reduce inflation levels.

Powell indicated that recent inflation data suggest that the central bank might need more time to feel confident about cutting rates. He noted that after a rapid decline in inflation rates at the end of last year, the Fed has seen little progress in combating inflation, and if price pressures persist, the Fed could maintain its current rate “for as long as necessary.”

Nick Timiraos, often dubbed “the Fed’s unofficial news agency,” stated after Powell’s remarks, “The chances of the FOMC preemptively cutting rates, or cutting due to a soft landing, have temporarily vanished. The stronger inflation in the first quarter has pushed back the Fed’s timeline for resetting its confidence that inflation will sustainably fall back to 2%.”

U.S. Stocks

Fundamental Analysis:

Large tech stocks showed mixed results, with Tesla dropping over 2% after announcing a 10% global workforce reduction via email; Apple fell nearly 2%, while Netflix rose over 1%.

Computer hardware, semiconductor equipment, and materials sectors were among the top gainers, with Advanced Micro Devices surging over 10%, Lam Research over 6%, ASML, Coherent, and Dell Technologies each rising over 2%, and Nvidia over 1%.

Metals and mining and lithium battery sectors led the declines, with Assurant dropping over 5%, and SQM, BHP Group, Vale, and Coeur Mining each over 3%.

Most popular Chinese concept stocks fell, with the Nasdaq Golden Dragon China Index down 1.27%. Futu Holdings dropped over 3%, Vipshop, Manbang Group, Bilibili, and Nio each over 2%, and NetEase, Alibaba, JD.com each over 1%, while XPeng Motors, Li Auto, Pinduoduo, and Baidu saw minor declines. Weibo, iQIYI, and Tencent Music experienced slight gains.

Technical Analysis: 

(S&P 500 Index, 1-day chart)

Market Trends:

  • Nasdaq fell 19.77 points or 0.12%, closing at 15,865.25.
  • Dow rose 63.86 points or 0.17%, closing at 37,798.97.
  • S&P 500 fell 10.41 points or 0.21%, closing at 5,051.41.

Hong Kong Stock Market

Fundamental Analysis:

Today, Hong Kong’s major indices initially recovered but weakened again.

Most tech stocks fell, with NetEase dropping over 2%, and Baidu, Alibaba each over 1%, while Xiaomi rose over 2%.

Casino stocks continued to fall for the fifth trading day due to potential regulatory pressures on intermediaries, with Galaxy Entertainment dropping over 5%.

Wind power stocks led the gains, with Dongfang Electric up over 7%; infrastructure stocks also strengthened, with China Metallurgical up over 3%, followed by gains in China Railway Group and China Communications Construction.

Metals, minerals, lithium batteries, and oil sectors were among the top decliners.

Dongfang Electric surged over 7% as Dongwu Securities issued a research report suggesting a continuous upward trend in overseas power equipment markets, driven by expansion in power generation, upgrades in electrical grids, and new demand for electricity.

Technical Analysis: 

(Hang Seng Index, 1-day chart)

Market Trends:

  • Hang Seng Index fell 0.07%, closing at 16,237.82.
  • Hang Seng Tech Index fell 0.20%, closing at 3,331.01.
  • Hang Seng China Enterprises Index rose 0.02%, closing at 5,744.75.

FTSE China A50 Index

Fundamental Analysis:

China’s three major indices rose in early trading, with over 5,000 stocks advancing. Micro-cap stocks mounted a strong comeback, along with AI concept stocks.

Micro-cap stocks, spatial computing, Kuaishou, Sora, machine vision, and high-bandwidth memory concepts were among the top gainers; oil-related, shale gas, and lithium mining concepts were among the top decliners.

Technical Analysis:  

(SSE Composite Index, 1-day chart)

Market Trends:

  • Shanghai Composite rose 1.24%, to 3,044.26.
  • Shenzhen Component rose 1.54%, to 9,295.95.
  • ChiNext Price Index rose 1.34%, to 1,783.84.
  • STAR 50 Index rose 1.86%, to 746.76.

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