The market is waiting for the heavyweight US PCE inflation data on Friday. This year's ticket committee, and the President of the San Francisco Federal Reserve, Daly, said there was "more work to do" before interest rate cuts. The Nasdaq accelerated its decline in the late session and closed down 1%, but the Dow rose for the fifth consecutive day to a five-week high. Google and Microsoft fell from their historical highs, Nvidia's 6.7% drop was the worst in nearly two months, and it fell nearly 13% in the past three days, entering a technical correction. Its market cap evaporated by more than $400 billion and fell to the third largest in the US stock market. The Chinese concept stock index outperformed and rose 1.9% at one point, and NIO Inc. and Li Auto Inc. rose more than 3%.
US Treasury yields rose slightly before falling in the final trading hours, not far from the low point since early April. The US dollar fell from its eight-week high, and the yen once pressed below 160. The offshore yuan once rose above 7.28, while Bitcoin fell by 7% and fell below $60,000.
Oil prices rose by 1%, hovering around the eight-week high since the end of April. Brent crude closed above $86, and US natural gas rose by 4%. Spot gold rose to more than $2,330, close to a two-week high, while New York cocoa futures fell by 11% to the lowest in nearly a month.
The market is focused on the US May PCE personal consumption expenditure price index to be released on Friday. This is the inflation index that the Fed is most concerned about. It is expected to show that the year-on-year growth rate has fallen from 2.8% to 2.6%, which may provide clearer guidance on the timing of interest rate cuts.
Traders expect the probability of the Fed starting interest rate cuts in September to be as high as 67%, and it is still the mainstream expectation for two rate cuts this year. David Rubenstein, co-founder of the Carlyle Group, said it is unlikely to cut interest rates before the US presidential election in November to stay away from politics.
At least five Fed officials will speak this week, including voting members Bowman and Cook. Charles Evans, the Chicago Fed President and a voting member next year, supports a rate cut, noting that if inflation softens further or raises questions about rates being too high. But this year's ticket committee and San Francisco Federal Reserve President Daly said there is "more work to be done" before interest rate cuts.
In addition to the final reading of US first-quarter GDP this week, which may remain at a 1.6% growth rate apart from that in April, the US stock market after-hours on Thursday will welcome the first presidential debate between Biden and Trump. The first round of voting in the French parliamentary elections will be held on Sunday, both of which may trigger defensive early positioning by investors.
The Nasdaq and S&P have fallen for three consecutive days, while the Dow has risen for five consecutive days. Google and Microsoft have left the highest point, and Nvidia has fallen by nearly 13% in three days.
On Monday, June 24th, US stocks only opened high in the Dow, and the Dow rose more than 1% at one point, up 421 points, with component stock Walmart hitting a new high and cyclical stocks such as energy and banks showing strong gains. The Russell small-cap stocks that are closely related to the economy also rose by as much as 1%.
The S&P 500 index stopped falling and turned up at the beginning of the day, with a maximum increase of 0.5% in the day, approaching the highest point set last Tuesday, and then fell back at the end of the day. Before noon, the Nasdaq, which is dominated by tech stocks, briefly turned upward, but both it and the chip stock index fell sharply towards the end of the day and closed at a new low.
At the close, the S&P 500 index fell for three consecutive days to a one-week low, the Nasdaq and Nasdaq 100 fell away from the historical high for three consecutive days, which had broken the record for seven consecutive days, and the Nasdaq hit a two-week low. The Dow rose for five consecutive days to a near five-week high:
The S&P 500 index fell 16.75 points, or 0.31%, to 5,447.87. The Dow rose 260.88 points, or 0.67%, to 39,411.21. The Nasdaq fell 192.54 points, or 1.09%, to 17,496.82.
The Nasdaq 100 fell 1.2%, and the Nasdaq Technology Market Value-Weighted Index (NDXTMC), which measures the performance of Nasdaq's 100 technology component stocks, fell 1.8%, both of which are off their new highs for three consecutive days. The Russell 2000 small-cap stocks rose by 0.4%, and the "panic index" VIX rose 1%, stabilizing above 13.
The Nasdaq and S&P have fallen for three consecutive days, while the Dow has risen for five consecutive days.
Eleven sectors of the S&P 500 index generally rose, but Super Micro Computer, Nvidia, Qualcomm and other technology stocks dragged down the technology sector by more than 2%, and the technology sector has fallen by 4.44% in the past three trading days. The energy sector rose 2.73% to lead the gains.
The energy sector and regional bank stocks performed best, while large technology stocks collectively fell.
Bank of America pointed out that trend-following CTA (commodity trading advisor) is a large participant in the futures contract market, which may make the sell-off of technology stocks more intense. CTA holds excessive long positions of Nasdaq 100 futures, which may trigger collective top escapes in the near future.
Star tech stocks saw mixed gains and losses. 'Metaverse' Meta rose 0.8% to leave its two-week low, Google A fell 0.2% to leave its historical high, Amazon fell nearly 2% to leave its six-week high, Tesla rose more than 3% before falling 0.2%, Netflix fell 2.5% to a one-week low; Apple rose 2.5% before closing up 0.3%, halting its three-day consecutive decline, with a market cap of $3.19 trillion, ranking second in the US stock market; Microsoft fell 0.5% and also left its new high, with a market value of $3.33 trillion, still the largest in the US stock market.
Chip stocks have fallen significantly for three consecutive days. The Philadelphia semiconductor index fell 3%, leaving its historical high for three consecutive days, and the SOXX ETF fell 2.9% further from its peak. Nvidia fell 6.7%, hitting its largest decline in two months and leaving its new high for three consecutive days, with a market value of less than $3 trillion and ranking third in the US stock market. The leveraged ETF for Nvidia fell 14%; Broadcom fell 3.7%, falling from its highest level for four consecutive days; ARM fell 5.8%, Qualcomm fell 5.5%, Taiwan Semiconductor American Stock fell 3.5%, Lam Research fell 2.5%, Applied Materials fell 2.4%, and Micron Technology fell 0.4%, all leaving their new highs for three consecutive days; Intel fell 1.7%, leaving its high for four weeks, and AMD fell 0.6% at the beginning of the day.
AI concept stocks fell more than they rose. CrowdStrike fell 0.7%, leaving its new high for four consecutive days. Oracle fell 1% and left its new high for three consecutive days. SoundHound.ai fell 0.5%, BigBear.ai fell 1.6%, C3.ai rose 2%, Snowflake fell 2.4%, refreshing its lowest level in 17 months, Palantir rose more than 1%, Adobe fell 1.7%, leaving its high for three months, Dell fell more than 5%, Supermicro fell 8.7%, and IBM rose 1.5%.
On the news front, Nvidia has fallen for three consecutive days and cumulatively fallen nearly 13%, entering a technical pullback. It has fallen 16% from its historical high in the intraday market, marking the largest single-day decline since April and evaporating more than $400 billion in market value during the period. Although brokerage firm Jefferies has raised its target price, claiming that it can rise another 19%, Nvidia's stock price is 100% higher than its 200-day moving average, and its technical position is bearish in the near term. The holdings of Huang Renxun and other executives have also dealt a heavy blow to the stock price. The European Union will take measures against Apple to ensure that its app store fees for developers acquiring new customers comply with the Digital Markets Act. Foxconn Industrial Internet Chairman Zheng Hongmeng said its new generation AI server GB200 is expected to be launched this year. Goldman Sachs is bullish on IBM's AI business.
Chinese concept stocks outperformed the US stock market. The KWEB ETF rose 0.4%, the CQQQ fell 1%, but then approached a turnaround in the intraday market. The Nasdaq Golden Dragon China Index (HXC) rose 1.9% and closed up 1.3%, once again breaking through the 6,000 mark, stopping its five-day consecutive decline and leaving its lowest point in two months.
Popular stocks rose generally, JD.com rose nearly 1%, Baidu rose 0.2%, PDD Holdings fell 1.6%. Alibaba rose 1.5%, Tencent ADR rose 0.5%, Bilibili fell 1.9%, NIO rose more than 3%, Xpeng rose more than 1%, and Li Auto Inc rose 3.6%.
Among other stocks with significant changes:
Logistics giant RXO rose 23% to its historical high and the best single-day performance since its listing, with more than $1 billion in acquisition of UPS's light-asset freight brokerage business Coyote Logistics, making it the third largest freight brokerage firm in the world.
Financial technology company Affirm rose nearly 13% to regain its decline since June 13th. Goldman Sachs rated it 'buy' and predicted a further 40% rise. Affirm's buy-now-pay-later loan service will be integrated into Apple Pay later this year. PayPal, which was downgraded to neutral by Goldman Sachs, fell nearly 2%.
The Nasdaq biotechnology index rose more than 2%, and Alnylam, a conceptual stock of heart disease treatment data breakthrough, rose more than 34%, the largest increase in nearly two years.
Ventilator medical equipment company ResMed fell more than 11% to a two-month low, obstructive sleep apnea treatment company Inspire Medical Systems fell 16% to a seven-month low, and competitors Eli Lilly once rose more than 2% and approached a historic high. Lilly's weight loss drug Tirzepatide can reduce the severity of obstructive sleep apnea.
Bitcoin fell below the psychological integers of $59,000 and $60,000, and blockchain concept stocks fell across the board. The global cryptocurrency mining machine stock No.1 Canaan Cryptos fell more than 7%, and the first US stock cryptocurrency trading platform Coinbase fell 6%.
European stocks rose in general, with Italian and French stock indices leading major national indices, up more than 1%, and German stocks also rising nearly 1%. Despite the poor performance of the technology sector, the pan-European Stoxx 600 rose 0.73%, approaching a two-week high, and rose for the fourth consecutive day in six days. The Italian bank index rose more than 3%. Danish weight-loss drug manufacturer Zealand continued to hit a historical high, rising by about 5.7%, while ASM International fell 2.7% and ASML Holding fell more than 1.5%.
After a slight increase, the yield on US Treasuries fell in the last quarter of trading, not far from lows since early April, while French bond prices rose.
In anticipation of Friday's high-profile inflation data, US Treasury yields rose slightly before falling at the end of the session. The two-year US Treasury yields, which are more sensitive to monetary policy, rose by nearly 2 basis points and approached 4.75%, and US stocks fell to 4.72% at the end of the session. The 10-year basic bond yield rose by as much as 2 basis points to approach 4.28%, falling 2 basis points to 4.23% at the end of the session. More than a week ago, US Treasury yields fell to lows in ten weeks since early April.
The ten-year German benchmark bond yield rose by less than 1 basis point at the end of the trading day, and the two-year yield rose by nearly 2 basis points. The 10-year French bond yield fell by more than 2 basis points. Basic bond yields for heavily indebted peripheral countries such as Italy, Spain, and Greece also fell. The two-year UK bond yield rose by about 2 basis points, and the medium- to long-term UK bond yield fell by less than 1 basis point.
Oil prices rose by 1%, hovering at the eight-week high since the end of April. Brent crude oil closed above $86, and US natural gas rose 4%.
After rising sharply and then falling back on Friday, oil prices rose again at the start of the last trading week of the first half of the year.
WTI August crude oil futures rose by $0.90, up more than 1.1%, to $81.63 per barrel, approaching the seven-week high set last week. Brent August crude oil futures rose by $0.77, up more than 0.90%, to $86.01 per barrel, the highest in eight weeks since April 30.
US oil WTI rose more than $1 or 1.3% during the session, returned to above $81, and had hit a seven-week high for three consecutive trading days last week. More actively traded international Brent September futures also rose by about $1 or 1.1%, breaking through the integer level of $85.
Mainstream investment banks such as Goldman Sachs, JPMorgan, and Citigroup are bullish on the fuel demand from the peak summer season and indoor cooling in the northern hemisphere, and expect to boost oil prices and significantly reduce inventories in the third quarter. Tudor, Pickering, Holt & Co. points out that with the escalating tension on the Israel-Lebanon border, the supply risk in the Middle East has once again become a focus, and the monthly gains of WTI and Brent may be 6% and 5.4%, respectively.
The TTF Dutch natural gas futures benchmark in Europe and the ICE UK futures rose by about 1% at the end of the session, which had previously traded near the lowest level in nearly two weeks. US natural gas futures for August contracts rose by nearly 4%, departing from a two-week low and the annual increase rose to 9%.
The US dollar has come off its nearly eight-week high, with the yen once approaching 160, and the offshore renminbi once rising above 7.28, while Bitcoin fell below $60,000.
The US dollar index DXY, which measures against six major currencies, fell the deepest by 0.4%, and once lost 105.40. Last Friday, it rose above 105.90 to a high of more than seven weeks since May 1, and rose 0.2% for the whole week and rose for three consecutive weeks.
The euro rose 0.4% against the USD and returned to above 1.07, breaking away from the seven-week low since the end of April, but it has accumulated a 1% decline in June. The GBP rose 0.3% against the USD and tried to rise above 1.27, breaking away from the five-week low since mid-May. After the extreme right-wing party alliance won in France, the candidate for finance minister said that it would comply with EU fiscal rules, easing the downward trend of French stocks and bonds and the drop of the euro in a risk-off environment.
The JPY fell to 159.93 against the USD, approaching the psychological level of 160, while US stocks stopped falling and turned to rise, still hovering near the near eight-week low since April 29, the lowest level in 34 years. It is speculated that the 160 mark is a warning line for Japanese government intervention in the foreign exchange market. The huge gap in interest rates between Japan and the US has led to a cumulative decline of 1.5% for the JPY in June, and a decline of more than 10% against the USD since the beginning of the year.
The offshore RMB rose to a daily high in early US stock trading, rising by 130 points or 0.2%, breaking through 7.28, and then the increase narrowed, still standing above 7.29, slightly away from the seven-month low.
Mainstream cryptocurrencies have been falling for many days. The largest market-cap leader, bitcoin, fell by 7% during the US stock market close, not only breaking through the $60,000 mark but also falling below $59,000, reaching its near eight-week low since May 1. The second-largest cryptocurrency, Ethereum, fell 4% and fell below $3,300, reaching its lowest level in five weeks since mid-May.
Bitcoin fell by about 10% in June. Last week, it fell by more than 8%, the second worst weekly performance this year, but it still rose more than 40% since the beginning of the year. Some analysts believe that only a Fed rate cut can be a real boost to cryptocurrencies, which are also risky assets. The bitcoin fund saw the largest two-week outflow of funds since the approval of the ETF in the US in January this year, with $1.2 billion flowing out during this period, especially after the Fed's FOMC meeting.
Spot gold rose above $2,330, approaching a two-week high, while New York cocoa futures fell 11% to nearly a one-month low.
The fall in the USD supports precious metal prices. COMEX August gold futures rose 0.7% to $2,346.40 per ounce, while COMEX July silver futures fell slightly to $29.60 per ounce.
Spot gold rose more than $12 or 0.5%, returning to above the integer level of $2,330. Last week, it approached $2,370, the two-week high, but fell sharply during last Friday's trading and fell during the week. Spot silver oscillated and rose, still hovering at the low of the week.
Analysis shows that the cooling economic data supports the US's imminent rate cuts. The rate cuts will be good news for precious metals that do not provide fixed-income returns. The uncertainty of various elections around the world and the escalation of conflicts in the Middle East provide support for safe-haven assets. Bank of America and Citigroup both issued reports forecasting that the long-term price of gold will reach $3,000 per ounce, and on May 20, gold rose to a historical high of $2,450 per ounce.
London industrial basic metals fluctuated slightly, with little change. The copper doctor, a benchmark of the economy, fell by $22 or 0.2%, still less than the integer level of $9,700, approaching a two-month low. London aluminum also fell slightly and hovered near a two-month low. London zinc rose slightly, London lead fell slightly, and London nickel rose 0.6%, but is not far from its low since early April. London tin closed slightly higher.
New York cocoa futures fell more than 11% and fell below $7,900 per ton, reaching its near one-month low since May 27. Some analysts worry that the record high prices will undermine demand when the global report for the second quarter is released next month. This year, the cocoa price has risen by 88%, and is on track for its best performance since 1980. Last week, cocoa futures fell by more than 11.6%.
Edited by Jeffrey