The minutes of the Federal Reserve's December monetary policy meeting, released on Wednesday, failed to bolster expectations of a rate cut that drove U.S. stocks soaring last year.
Ahead of the Fed minutes, Richmond Fed President Barkin said that the possibility of further interest rate hikes still exists, weighing on stock market bulls. Major U.S. stock indexes collectively opened lower. Most analysts believe that the minutes of this meeting are likely to pour cold water on investors who are expecting a sharp interest rate cut this year, and do not want the results of curbing inflation to be stifled by long-term interest rates that fall too quickly. Some analysts believe that the Fed may send a signal through the minutes that it is not in a hurry to cut interest rates.
The U.S. ISM manufacturing index for December rebounded slightly higher than expected to 47.4 in early trading, but it was below the boom-bust watershed of 60 for 14 consecutive months, indicating that manufacturing factory activity is still contracting. Major stock indices maintained their downward trend after the release of the data.
The minutes of the Fed meeting released at midday showed that Fed policymakers believe that the upside risk to inflation has declined, and 2024 is suitable for interest rate cuts, but did not provide a signal of when to cut interest rates, saying that the path of interest rates is very uncertain and further rate hikes may still be due to economic needs, and many policymakers also expect that high interest rates may remain higher than expected. There are comments that the minutes are far less dovish than the dovish leanings revealed after Fed Chairman Powell's meeting last month, and some comments bluntly say that this is the new hawkish news.
Ahead of the release of the Fed minutes, the frenzy of interest rate cut expectations in the market continued to "subside", while investors worried that increased geopolitical risks could affect supply chains and new upward inflationary pressures, which also hit the bond market. U.S. Treasury intraday prices extended Tuesday's losses, with yields refreshing daily highs after the release of manufacturing data and the number of job openings, but yields retreated. The yield on the benchmark 10-year Treasury note regained 4.0% intraday for the first time in nearly three weeks, before giving up gains and turning lower. After the release of the minutes, the U.S. stock index extended its decline and refreshed its daily low, while the U.S. Treasury yield fell.
The U.S. dollar index, which rose sharply on Tuesday, rose further and stood at a nearly three-week high before the release of the Federal Reserve minutes, which narrowed gains after the release of the minutes, and the first two trading days of 2024 were the best start to the year since 1997. A number of non-US currencies continued to decline. Cryptocurrencies failed to extend Tuesday's rally. Bitcoin dived intraday, falling below $41,000 from above $45,000 at one point, falling more than 10% intraday, giving up all the gains that forced $46,000 on Tuesday to fall to a low of at least two weeks. The report by cryptocurrency industry firm Matrixport poured cold water on market expectations that the US Securities and Exchange Commission (SEC) approved the listing of bitcoin spot ETFs this month, and the SEC is not expected to approve until the second quarter, and warned that if the SEC refuses to approve the ETF, the price of bitcoin could fall as quickly as 20%, falling back to $36,000 to $38,000.
Among commodities, gold extended its intraday decline to more than 1% amid the strengthening of the dollar, its worst performance in more than three weeks, and tensions in the Middle East helped international crude oil rebound strongly, rising more than 3% in one day for the first time in nearly three weeks. According to CCTV reports, hundreds of people were killed in the explosion in Kerman City on the 3rd, and Iran's interior minister said that the Iranian government would respond strongly to the terrorist attack, and Iranian President Raisi said that the perpetrators would pay a heavy price. On Wednesday, media said that the closure of Sharara, Libya's largest oil field with a capacity of 300,000 barrels per day, was also driven by protests.
The Nasdaq fell to a three-week low for four consecutive days, Tesla led the decline in blue-chip technology stocks, the chip stock index underperformed the market for two days, and the Chinese concept stock index turned up intraday
The three major U.S. stock indexes collectively opened lower for the second consecutive day and maintained a downward trend throughout the trading day. The Nasdaq Composite Index fell more than 1% intraday for two consecutive days. The Nasdaq fell nearly 1.3%, the S&P 500 fell more than 0.9%, and the Dow Jones Industrial Average fell more than 310 points, or more than 0.8%, in early trading. In the end, the three major indexes collectively closed down, the Nasdaq closed down for four consecutive trading days, and the S&P fell for three consecutive days.
The Nasdaq, which closed down 1.63% on Tuesday, closed down 1.18% at 14,592.21 points, updating its lowest closing level since Dec. 12. The S&P closed down 0.8% at 4,704.81, its lowest level since Dec. 20. The Dow closed down 284.85 points, or 0.76%, at 37,430.19, falling to a closing all-time high set by Tuesday's rally.
The Russell 2000, a small-cap index dominated by value stocks, closed down 3.35%, underperforming the broader market and falling for four consecutive days, refreshing its lowest closing level since December 13. The tech-heavy Nasdaq 100 index closed down 1.06%, falling more than 1% for two straight days and falling for four consecutive days to its lowest closing since Dec. 12 after both Tuesday and the Nasdaq posted their biggest losses since Oct. 3. The Nasdaq Technology Market Cap Weighted Index (NDXTMC), which measures the performance of technology constituents in the Nasdaq 100 index, fell more than 1% at the beginning of the session to close down 0.92%, falling for three consecutive days to close at its lowest level since December 11.
Among the major S&P 500 sectors, only three closed higher on Wednesday, with energy, which rebounded strongly, rising more than 1.5%, utilities up about 0.4%, and Google's communication services up 0.1%. Among the eight sectors that closed lower, interest-rate sensitive real estate fell nearly 2.4% to lead the decline, Tesla's consumer discretionary fell nearly 1.9%, industrials fell 1.5%, and chip stocks IT fell 1%.
Leading technology stocks fell at the beginning of the session, and then some rose. Tesla, the worst performer, fell nearly 4.9% in early trading and closed down 4%, falling for four consecutive days and refreshing the low closing level since December 12. Among the six major technology stocks of FAANMG, Apple, which fell more than 3% on Tuesday after being downgraded to underweight by Barclays, fell more than 1% in early trading and closed down nearly 0.8%, falling for three consecutive days and continuing to refresh its closing low since November 9; Amazon closed down nearly 1%, falling for three consecutive days, and refreshing its low since December 14 on two days; and Meta, the parent company of Facebook, closed down 0.5% Microsoft, which fell for three consecutive days to its lowest level since December 15 on Tuesday, turned up at the beginning of the session and closed slightly higher; Netflix, which fell for three consecutive days on Tuesday to its lowest level since December 12, rose more than 1% in early trading and closed up nearly 0.4%; Google's parent company Alphabet, which fell for four consecutive days on Tuesday and fell for four consecutive days on Tuesday to the lowest level since December 19, closed up more than 0.5%.
Chip stocks fell for two consecutive days, underperforming the market for two days. The Philadelphia Semiconductor Index and the Semiconductor Industry ETF SOXX closed down more than 2%, updating their lowest levels since December 11. Among individual stocks, by the close, AMD fell more than 2%, Qualcomm fell nearly 2%, Nvidia and Intel fell more than 1%, Samsung and Micron reportedly planned to raise DRAM prices by 15%-20%, and American discs fell more than 2% at the beginning, and they turned up in early trading, closing down less than 0.1%.
Seven major technology stocks, including Apple, Microsoft, Alphabet, Meta, Amazon, Nvidia and Tesla, continued to fall on Wednesday.
AI概念股齐跌，总体跑输大盘。 收盘时，C3.ai（AI）跌近4%， SoundHound.ai（SOUN）跌4.8%，BigBear.ai（BBAI）跌6%，Palantir（PLTR）跌近3%，Adobe（ADBE）跌超1.4%。
Most of the popular Chinese concept stocks rebounded and outperformed the market. The Nasdaq Golden Dragon China Index (HXC) fell 1% at the beginning of the session before turning higher in early trading, closing up 1.5%. Among the Chinese ETFs, KWEB rose more than 1% in early trading after turning up at the beginning of the session, and CQQQ narrowed its decline by more than half after falling more than 1% at the beginning of the session. The three new car-making forces rebounded together, with Li Auto closing up more than 3%, Xpeng Motors closing up more than 1%, and NIO closing up nearly 1%. Among other stocks, at the close, Station B and NetEase rose about 4%, Tencent rose more than 3%, Alibaba, Pinduoduo rose more than 2%, Baidu rose about 2%, JD.com rose about 1%, and Canaan Technology, a bitcoin mining machine giant affected by Bitcoin's intraday plunge, fell nearly 14% at the beginning of the session and closed down about 5.6%.
Among the more volatile stocks, cryptocurrency stocks fell intraday, including Coinbase (COIN), the largest cryptocurrency exchange in the United States, which fell more than 8% at the beginning of the session and closed down about 3%, MicroStrategy (MSTR), which disclosed that its co-founders would sell $216 million worth of shares, fell more than 8% intraday and closed down 7.9%, and electric vehicle maker Rivian (RIVN), which fell 10% on Tuesday after announcing fourth-quarter deliveries that were lower than expected, fell 6.8% in early trading , down 3.7%, and used car e-commerce platform Carvana (CVNA), which fell more than 6% in early trading, closed down 4.4%.
In European stocks, the pan-European stock index fell for two consecutive days. The Euro Stoxx 600 index posted its biggest daily decline since November 10, continuing to fall from the closing high since January 20, 2022 set last Friday, and updating the closing low since December 13. Stock indexes of major European countries fell on Wednesday, with the exception of British stocks falling more than 1%, German and Italian stocks that rose twice in a row retreated, and French stocks and British stocks fell for two consecutive days
Among the STOXX 600 sectors, engineering closed down nearly 2.8%, the biggest decline in nearly six months, financial services fell more than 2.4%, and basic resources, where mining stocks are located, also fell more than 2%, while the medical sector closed up nearly 0.9% against the market, rising for four consecutive days.
Among individual stocks, a number of luxury giants fell sharply, LVMH closed down 3.8%, Richemont fell 3.2%, and Kering fell 3%; French-listed rail giant Alstom fell nearly 10%, leading the decline in the Stoke 600 constituents, and luxury stocks together caused French stocks to fall the most in various countries' stock indexes; while shipping giant Maersk continued to rise against the market, closing up 5.1% after Goldman Sachs upgraded its rating from sell to neutral.
The yield on the 10-year Treasury bond rose above 4.0%, hitting a new high in nearly three weeks, and then turned lower to a new daily low after the Fed minutes
The performance of European government bond prices was mixed, with German bond prices rebounding and yields falling, and British bond yields not yet falling. By the end of the bond market, the UK 10-year benchmark government bond yield closed at 3.63%, unchanged from the same period on Tuesday and still close to the high since December 19 when Wednesday's intraday rise of 3.70%, the 2-year British bond yield closed at 4.07%, up about 4 basis points during the day, and was close to 4.15% intraday to refresh the high since December 21, and the benchmark 10-year German bund yield closed at 2.02%, down about 4 basis points during the day, breaking above 2.11% on Wednesday's intraday The 2-year German bond yield, which rose above 2.47% on Wednesday and refreshed its more than one-week high, closed at 2.41%, down about 3 basis points on the day.
The yield on the U.S. 10-year benchmark Treasury bond was tested at 3.93% in early Asian trading, and then continued to rise, after the release of the U.S. job vacancies and ISM manufacturing index, U.S. stocks rose above 4.0% in early trading, re-trading the 4.0% mark for the first time since December 14, rising nearly 8 basis points in the day, and then quickly returned to below 4.0%, narrowing the rally, U.S. stocks fell below 3.96% at the end of early trading, and fell below 3.90% after the release of the Federal Reserve meeting minutes Refreshed the daily low, down nearly 4 basis points in the day, and about 3.92% at the end of the bond market, down nearly 1 basis point in the day, and fell back after rising for three consecutive days.
The yield on the 2-year Treasury note, which is more sensitive to the outlook for interest rates, rose above 4.38% to 4.3803% in early trading in U.S. stocks, refreshing its high since last Tuesday for two consecutive days, rising about 6 basis points during the day, and then falling back, and the U.S. stock market has fallen below 4.34% before the release of the Fed meeting minutes at midday, and fell below 4.31% after the release of the minutes to refresh the daily low, falling about 1 basis point during the day, and then rebounding again, to about 4.33% at the end of the bond market, up about 1 basis point in the day, and rising for two consecutive days.
The U.S. dollar index rose for four consecutive days, hitting a new high in nearly three weeks, the yen fell more than 1% intraday, and Bitcoin dived more than 10% intraday
The ICE U.S. Dollar Index (DXY), which tracks a basket of six major currencies such as the U.S. dollar against the euro, fell below 102.10 when it refreshed its daily low in the Asian market, down more than 0.1% during the day, and European stocks maintained their gains after turning higher before the market, and U.S. stocks rose above 102.70 in early trading, refreshing the high since December 14, up 0.5% on the day, and the gains narrowed after the release of the Federal Reserve minutes, which was close to 102.40.
By the close of trading on Wednesday, the U.S. dollar index was just below 102.50, up nearly 0.3% on the day, while the Bloomberg dollar spot index, which tracks the greenback against 10 other currencies, rose more than 0.2%, continuing to refresh its highest level since December 20, and the U.S. dollar index rose for four consecutive days.
Among the non-U.S. currencies, the yen fell for two consecutive days, falling to a two-week intraday low, the dollar against the yen in the U.S. stock market rose above 143.70, a new high since December 20, up more than 1% in the day, the Fed minutes after the release of the gains narrowed, back to below 143.30, the euro against the dollar in the U.S. stock market at midday fell below 1.0900, a new low since December 17, down more than 0.4% in the day The British pound fell below 1.2620 in early U.S. trading, approaching Tuesday's low since December 21, and the Fed minutes were close to 1.2680 to refresh the daily high, up nearly 0.5% on the day.
The offshore yuan (CNH) against the US dollar turned higher in early trading on Wednesday and before the European stock market, and the European stock market refreshed the daily high of 7.1427 before the market, and continued to decline after turning down again, and the US stock market fell to 7.1726 in early trading, refreshing the low since December 13, and falling 235 points in the day. At 5:59 on January 4, Beijing time, the offshore yuan was quoted at 7.1663 yuan against the US dollar, down 172 points from the end of New York on Tuesday, falling for three consecutive trading days.
Bitcoin (BTC), which had risen more than $2,700 and rose more than 6% on Tuesday, fell sharply on Wednesday, and European stocks rose above $45,500 in early trading, close to the 21-month high set by $46,000 on Tuesday, but dived intraday, U.S. stocks fell below $41,000 before trading, refreshing the low since at least December 18, and the currency price of some platforms fell below $40,400, refreshing a one-month low, down more than $5,000 and more than 11% from the daily high. Then, the currency price quickly regained $42,000 and the decline narrowed, the U.S. stock market rose above $43,600 intraday, and the U.S. stock closed above $42,800, down more than 5% in the last 24 hours.
Crude oil ended a four-day losing streak and rose more than 3% in a day for the first time in nearly three weeks, breaking from a more than two-week low
International crude oil futures rebounded strongly. Oil prices turned lower in pre-market trading on Wednesday, and European stocks continued to rise after intraday gains, with U.S. stocks refreshing their daily highs at midday, with U.S. West Texas Intermediate (WTI) crude oil approaching $73.20, up about 4% on the day, and Brent crude oil rising above $78.60, up nearly 3.7% on the day.
By the close, crude oil ended a four-day losing streak and closed up more than 3% in one day for the first time since December 14. WTI crude oil futures for February delivery closed up $2.32, or 3.296%, at $72.70 a barrel, while Brent crude futures for March delivery closed up $2.36, or about 3.11%, at $78.25 a barrel, and U.S. oil both moved off Tuesday's lows since closing on December 13.
U.S. gasoline and natural gas futures rose together. NYMEX February gasoline futures that retreated on Tuesday closed up about 3% at $2.1581/gallon, not continuing to approach their lowest level since December 13 last Thursday, while NYMEX February natural gas futures closed up 3.89% at $2.6680/MMBtu, the highest since December 1, up for two consecutive days.
London copper hit a new two-week low for four consecutive days, and gold hit the biggest decline in more than three weeks, falling back to a low level in more than two weeks
London base metals futures mostly continued to fall on Wednesday. London copper fell for four consecutive trading days and continued to refresh its two-week low. London nickel also fell for four consecutive days, falling to a four-week low. London lead fell to a three-week low for three consecutive years, and London aluminum and London zinc fell twice in a row, falling to a low level in the past two weeks. Lunxi rebounded, bidding farewell to the week-long low set by two consecutive declines.
New York gold futures, which barely halted two consecutive losses on Tuesday, fell sharply, rose slightly in the intraday session on Wednesday, and then fell overall, with U.S. stocks falling to $2,038.3 when they refreshed their intraday lows, down about 1.7% on the day.
Finally, COMEX gold futures for February delivery closed down 1.48%, the biggest drop since December 8, at $2,042.8 an ounce, refreshing the closing low since December 18.
Spot gold fell below $2,031 in midday trading, down nearly 1.4% during the day, and the decline narrowed after the release of the Federal Reserve minutes, and the U.S. stock regained $2,040 in late trading.
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