Expectations of interest rate cuts heat up, U.S. stocks and bonds rose, gold and oil rebounded, Nasdaq rose nearly 3%, and Google jumped after the market

Source: Wall Street Insights

Speeches by Federal Reserve officials boosted expectations of interest rate cuts. Investors bet that interest rate cuts could come earlier than previously expected. The prices of US stocks and US bonds rose simultaneously, the US dollar declined, and crude oil and gold rebounded accordingly. Blue-chip stocks such as Procter & Gamble that released their earnings dragged down the upward trend of the Dow Jones Industrial Average. However, Google released excellent earnings after the market closed, which is expected to drive technology stocks higher on Friday.

The expectations of Federal Reserve interest rate cuts stimulated investors' risk appetite, and US stocks generally rose on Thursday:

Before the US stock market opened, Cleveland Fed President Hammack ruled out the possibility of an interest rate cut in May but said that if there is clear evidence of the economic trend, the Federal Reserve could take action as early as June. In the early trading of US stocks, Federal Reserve Governor Waller said that if tariffs lead to job losses, he would support an interest rate cut. After the speech, the main US stock indexes rose, and the yields on US Treasury bonds further declined.

After the US stock market closed, Google announced that its revenue in the first quarter increased beyond expectations, and its EPS profit soared by nearly 50%. It received a new share repurchase authorization of $70 billion, and its stock price jumped by 6% at one point after the market closed.

The expectations of interest rate cuts somewhat suppressed the US dollar exchange rate. The US dollar index fell slightly from yesterday's rollercoaster-like high point. Gold and crude oil rebounded and rose as a result. Bitcoin fell by more than $2,000 intraday and then rebounded in a V-shape. Eventually, it held onto its recent gains, and there were huge net inflows into Bitcoin ETFs for two consecutive days.

US stocks rose sharply for the third consecutive trading day on Thursday. The Nasdaq Composite Index led the way, rising by more than 2.7%. The Nasdaq has risen by more than 2% for three consecutive days, which is the first time since May 2001. The Dow Jones Industrial Average rose by more than 1%, with an increase of nearly 500 points. The China stock index initially fell by 1.5% but then turned positive. NIO rose by more than 6%. After the US stock market closed and the earnings reports were released, IBM fell by more than 6%, and Procter & Gamble fell by nearly 4%.

The three major US stock indexes:

The S&P 500 Index closed up 108.91 points, or 2.03%, at 5,484.77 points.

The Dow Jones Industrial Average closed up 486.83 points, or 1.23%, at 40,093.40 points.

The Nasdaq closed up 456.99 points, or 2.74%, at 17,166.04 points. The Nasdaq 100 Index closed up 521.14 points, or 2.79%, at 19,214.40 points.

The Russell 2000 Index closed up 2.00%, at 1,957.59 points.

The CBOE Volatility Index (VIX) closed down 6.92%, at 26.48.

US stock sector ETFs:

Among the 11 sectors of the S&P 500 Index, the technology sector closed up 3.54%, the telecommunications sector rose 2.31%, the consumer discretionary sector rose 2.26%, and the energy sector rose 1.47%, ranking in the middle.

The Semiconductor ETF closed up 5.06%. The Technology ETF, the Internet Stock Index ETF, and the Global Technology Stock Index ETF rose by 3.73% - 3.31%.

"The Magnificent Seven" of US technology stocks:

The ETF of the seven major US technology stocks (Magnificent 7) rose 2.94%.

Tesla closed up 3.50%, Amazon rose 3.29%, Meta Platforms rose 2.48%, Nvidia rose 3.62%, Google Class A rose 2.53%, Apple rose 1.84%, and Microsoft rose 3.45%.

Google released its earnings after the market closed. Its revenue in the first quarter increased beyond expectations, and its EPS profit soared by nearly 50%. It received a new share repurchase authorization of $70 billion. Its stock price jumped by 6% at one point after the market closed and then the increase narrowed to nearly 5%.

Chip stocks:

The Philadelphia Semiconductor Index closed up 5.63%, at 4,208.19 points.

AMD closed up 4.51%, and the ADR of Taiwan Semiconductor Manufacturing Company (TSMC) fell 1.03%.

AI concept stocks soared:

Applovin closed up 6.15%, and Tempus AI closed up 7.97%.

Chinese concept stocks:

The Nasdaq Golden Dragon China Index closed up 0.68%, at 6,981.46 points.

Among the popular Chinese concept stocks, Pony.ai initially closed up 37%, Fangdd Network rose 10.8%, NIO, New Oriental Education & Technology Group, Xiaomi ADR, Pinduoduo, Bilibili, Baidu, and NetEase rose by 6.2% - 2.1%.

Among other key individual stocks:

The Class B shares of Berkshire Hathaway, owned by Warren Buffett, rose 0.92%.

Procter & Gamble fell 3.75%. Before the US stock market opened, Procter & Gamble significantly lowered its annual sales and profit expectations and reported an unexpected decline in net sales in the third quarter.

The Governing Council of the European Central Bank (ECB) will assess its monetary policy strategy on May 6-7. The ECB will judge whether all policy tools are still appropriate through this assessment. The central bank will consider adjusting its strategy to make its (monetary policy) actions more flexible. The stock indexes of various European countries closed slightly higher.

Pan-European stocks:

The Stoxx Europe 600 Index closed up 0.36%, at 518.61 points.

The Euro Stoxx 50 Index closed up 0.32%, at 5,114.98 points.

The stock indexes of various countries closed up:

The German DAX 30 Index closed up 0.47%, at 22,064.51 points.

The French CAC 40 Index closed up 0.27%, at 7,502.78 points.

The UK FTSE 100 Index closed up 0.05%, at 8,407.44 points.

Sectors and individual stocks:

Among the blue-chip stocks in the eurozone, Infineon Technologies AG rose 7.08%, and Ferrari N.V., adidas AG, Stellantis N.V., Air Liquide S.A., Siemens AG, and Eni S.p.A. rose by 2.61% - 2.11%.

Among all the constituent stocks of the Stoxx Europe 600 Index, Belimo Holding AG closed up 12.40%, Galderma Group AG rose 11.6%, and Infineon Technologies AG ranked third in performance.

The expectations of interest rate cuts boosted the prices of US Treasury bonds. Today, the yields on treasury bonds fell across the board, by about 6-8 basis points. Among them, the yield on the two-year US Treasury bond fell by more than 8 basis points.

US Treasury bonds:

At the close in New York, the yield on the 10-year US Treasury bond fell 7.41 basis points, to 4.3071%, and it continued to fluctuate downward throughout the day.

The yield on the two-year US Treasury bond fell 8.40 basis points, to 3.7868%. After opening with a bearish gap, it continued to fluctuate downward.

European bonds:

At the close in the European market, the yield on the 10-year German Treasury bond fell 4.9 basis points, to 2.448%. The yield on the two-year German Treasury bond fell 6.2 basis points, to 1.685%.

The yield on the 10-year UK Treasury bond fell 5.2 basis points, to 4.500%.

The yields on the 10-year sovereign bonds of France, Italy, Spain, and Greece fell by at least more than 7 basis points.

The expectations of interest rate cuts suppressed the US dollar index. Non-US currencies fluctuated upward as a result. However, the British pound, the euro, and the Swiss franc are still below key resistance levels. Bitcoin fell by more than $2,000 intraday and then rebounded in a V-shape.

The US dollar:

At the close in New York, the ICE US Dollar Index fell 0.47%, to 99.373 points. The intraday trading range was 99.841-99.244 points, and it was in a downward trend throughout the day.

The Bloomberg Dollar Index fell 0.34%, to 1,224.42 points. The intraday trading range was 1,228.47-1,223.28 points.

Non-US currencies:

The euro rose 0.70% against the US dollar, to 1.1388. The British pound rose 0.63% against the US dollar, to 1.3339.

The US dollar fell 0.3% against the Swiss franc, to 0.8269.

The Japanese yen:

At the close in New York, the US dollar fell 0.57% against the Japanese yen, to 142.63 yen. The intraday trading range was 143.46-142.28 yen.

The euro rose 0.06% against the Japanese yen, to 162.44 yen; the British pound rose 0.05% against the Japanese yen, to 190.223 yen.

The offshore Chinese yuan:

At the close in New York, the offshore Chinese yuan was quoted at 7.2870 yuan against the US dollar, almost unchanged from the close in New York on Wednesday.

Cryptocurrencies:

At the close in New York, the main contract of CME Bitcoin futures (BTC) fell 0.06% compared with the close in New York on Wednesday, to $93,550. It showed a V-shaped reversal intraday.

The main contract of CME Ether futures (DCR) fell 1.23%, to $1,765.50.

The weak US dollar boosted oil prices. Crude oil fluctuated upward from a low level. The New York natural gas futures closed below the $3 mark for the first time since December.

Crude oil:

The June WTI crude oil futures closed up $0.52, or more than 0.83%, at $62.79 per barrel.

The June Brent crude oil futures closed up $0.43, or 0.65%, at $66.55 per barrel.

Natural gas:

The May NYMEX natural gas futures closed down more than 3.04%, at $2.93 per million British thermal units, falling below the closing price of $2.985 on December 26, 2024.

After yesterday's fluctuations, the gold price rebounded slightly and returned above the $3,300 mark. The copper futures rebounded sharply, with an increase of more than 0.8%.

Gold:

At the close in New York, spot gold rose 1.77%, to $3,346.66 per ounce.

The COMEX gold futures rose 1.87%, to $3,355.80 per ounce, approaching the intraday all-time high of $3,509.90 set on April 22.

Silver:

At the close in New York, spot silver was flat, at $33.5840 per ounce.

The COMEX silver futures rose 0.07%, to $33.570 per ounce.

Other metals:

At the close in New York, the COMEX copper futures rose 0.83%, to $4.8835 per pound.

The LME copper futures closed up $10, at $9,392 per ton. The LME aluminum futures closed up $17, at $2,449 per ton. The LME zinc futures closed up $48, at $2,688 per ton.

The LME tin futures closed up $449, at $31,763 per ton. The LME nickel futures closed up $159, at $15,821 per ton.

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