CPI fell sharply in anticipation of interest rate cuts, U.S. stocks fell, and the Nasdaq fell more than 2% intraday

According to data released on Tuesday, the US CPI cooling in January was less than expected, the year-on-year growth rate slowed to 3.1% from 3.4% in December, and the market expected to slow to 2.9%, and the month-on-month growth did not slow down to 0.2% as expected, but stabilized at 0.3% in December;

CPI inflation started the year on signs of a solid high, and the data hit the market's expectation of a continued cooling inflation, which may prompt the Federal Reserve to delay the start of interest rate cuts. After the CPI release, swap contract pricing showed that traders' expectations of a Fed rate cut in May had shrunk sharply, halving from about 64% before the CPI release to about 32%, and the first rate cut that was fully priced in was delayed from June to July. The market is currently pricing in only about a 50% probability of four 25 basis point rate cuts and a 100 basis point cut this year, compared to a total of about 170 basis points this year a month ago in mid-January.

The market is pricing in a 50% chance of a 100-quarter rate cut this year, compared to a 170 basis point cut a month ago

After the release of the CPI, U.S. stocks and bonds fell sharply. U.S. Treasury prices dived, yields jumped more than 10 basis points intraday, the yield on the benchmark 10-year U.S. Treasury rose above 4.30% for the first time in two months, the yield on interest-sensitive two-year U.S. Treasury bonds hit a new high since the Federal Reserve's interest rate meeting in December last year after last Friday, and the intraday rise expanded to nearly 20 basis points; the U.S. dollar index hit a new high since November last year after a week; the three major U.S. stock indexes almost all recorded the biggest daily decline in a year, and the S&P 500 recorded the largest daily decline in CPI release in more than a year.

The U.S. dollar strengthened as non-U.S. currencies fell, with the yen falling below the 150.00 mark against the U.S. dollar for the first time in nearly three months, and speculation that the Japanese government might intervene in the foreign exchange market was rekindled, while Bitcoin, which hit a new high of more than two years after breaking through the $50,000 mark on Monday, fell nearly $2,000 at one point, ending the longest winning streak in a year after seven consecutive days.

Among the commodities, the dollar jumped, the U.S. Treasury yields rose under the blow, gold dived, quickly stopped rising and fell, spot gold since the December Federal Reserve meeting for the first time intraday fell below the $2,000 mark, and futures were once from the CPI release before the intraday high fell more than 2%, gold futures fell to $2,000 important support, the worst single-day performance since early January.

Although the U.S. CPI gave up most of the intraday gains after the announcement, international crude oil finally maintained its intraday rally, standing at a high level in more than two weeks, and U.S. oil continued to rise for more than a week. Geopolitical tensions and OPEC's bullish outlook on oil demand have both contributed to the upside of oil prices, the commentary said. Negotiations between the United States, Egypt, Israel and Qatar on a ceasefire in the Gaza Strip failed to reach a breakthrough on Tuesday, Yemen's Houthi rebels continued to launch attacks in Red Sea waters, and OPEC's monthly report continued to forecast relatively strong global oil demand growth in 2024 and 2025 and raised its economic growth forecast for the two years as having the potential for further upside. ‘

U.S. natural gas inventories remain well above the five-year average, but a storm at the end of winter could quickly change market sentiment, with U.S. natural gas inventories still well above the five-year average, as comments said.

The three major U.S. stock indexes almost hit the biggest daily drop in a year, the Dow Jones posted the biggest drop in five months, small-cap stocks and bank stocks underperformed the broader market, and Nvidia once turned up

The three major U.S. stock indexes collectively opened lower and maintained a downward trend throughout the day. The Dow Jones Industrial Average fell more than 700 points at midday, falling nearly 760 points or nearly 2% at one point, and the S&P 500 fell more than 1% in early trading and fell slightly more than 2% at midday to refresh its daily low. The Nasdaq Composite Index fell more than 2.2% at the beginning of the session, narrowed its decline to less than 2% in early trading, and expanded its decline to more than 2% at midday, falling nearly 2.5% when it refreshed its daily low. If the midday decline continues, the three major indexes may all record their biggest daily losses since February 21, 2023, but the losses have narrowed at the end of the session.

In the end, the three major indexes collectively closed lower, with the S&P and Nasdaq falling for two consecutive days, both of which were the biggest declines since January 31, the day Fed Chair Jerome Powell signaled that there would be no interest rate cuts in the short term after the Fed meeting. The S&P closed down 1.37%, its biggest drop on the monthly CPI release day since September 2022, at 4,953.17 points, the lowest since last Monday, Feb. 5. The Nasdaq closed down 1.8% at 15,655.60, its lowest level since Feb. 6. The Dow closed down 524.63 points, or 1.35%, the biggest closing decline since March 9, 2023, at 38,272.75 points, the lowest since January 31.

The Russell 2000, a small-cap index dominated by value stocks, closed down 3.96%, its biggest drop since June 2020, underperforming the broader market and retreating sharply after rising for three consecutive days to close highs since December 28, 2023. The tech-heavy Nasdaq 100 index fell about 2% at the beginning of the session and closed down 1.58%, falling for two consecutive days to its lowest level since February 6, while the Nasdaq Technology Market Cap Weighted Index (NDXTMC), which measures the performance of technology constituents in the Nasdaq 100 index, fell 2.6% at the beginning of the session and fell less than 2% in early trading, both continuing to fall from the all-time high of last Friday's close.

The S&P 500 posted its biggest CPI drop since September 2022, while the small-cap index posted its biggest drop since June 2020

All major S&P 500 sectors were wiped out, with the exception of consumer staples, which fell nearly 1%, and healthcare, which fell nearly 0.9%, at least about 1%. Consumer discretionary fell about 2% in the sector led by Amazon and Tesla, interest rate-sensitive properties fell 1.8% and utilities fell nearly 1.7%.

Leading technology stocks all fell, and some narrowed their losses intraday. Tesla, which raised prices for a number of Model Ys in Germany, closed down nearly 2.2%, falling for two consecutive days after four consecutive gains to its lowest level since Feb. 5.

Among the six major technology stocks of FAANMG, Amazon fell more than 3.8% at the beginning of the session and closed down nearly 2.2%, falling for two consecutive days to the lowest level since February 1, Facebook's parent company Meta fell nearly 3% at the beginning of the session and closed down nearly 1.9%, Microsoft fell nearly 2.9% at the beginning of the session and closed down nearly 2.2%, Google's parent company Alphabet fell 2.2% at the beginning of the session and closed down 1.6%, all falling for two consecutive days to the lowest level since February 6, and Apple closed down 1.1% , fell for two consecutive days to the lowest level since January 31, and Netfline, which fell 1.6% at the beginning, turned higher in early and midday trading, closing down 0.6%, falling for two consecutive days to the lowest level since January 24.

Seven major technology stocks, including Microsoft and Nvidia, collectively recorded the second-largest daily decline since October last year

Chip stocks generally fell for two consecutive days, and the decline narrowed in early trading. The Philadelphia Semiconductor Index and the Semiconductor Industry ETF SOXX fell more than 3% at the beginning of the session, closing down about 2% and nearly 2.1%, respectively, before continuing to retreat after hitting a record closing high on Friday. Despite UBS's sharp increase in price target from $580 to $850, an increase of 46.6%, Nvidia still fell more than 3.6% at the beginning of the session, leading the decline among the seven major technology stocks, including Apple, Microsoft, Alphabet, Meta, Amazon, Nvidia, and Tesla, rising more than 1% after turning higher in early trading, and then turning down at midday, closing down nearly 0.2% after hitting a record closing high for two consecutive trading days, and Arm, which had risen more than 90% in three days as of Monday, closed down nearly 19.5% AMD fell more than 4% at the beginning of the session and closed down 0.2%, and by the close, Micron Technology fell nearly 5%, onsemi fell nearly 3%, Qualcomm fell 2%, Intel fell nearly 2%, and Broadcom fell more than 1%.

Nvidia fell more than 3% in early trading and rose more than 1% in early trading

Arm fell more than 10% on Tuesday, and rose more than 90% in the previous three days, that is, after the release of the earnings report

AI concept stocks generally followed the decline of the broader market and underperformed the broader market. At the close, BigBear.ai (BBAI) fell more than 8%, C3.ai (AI) fell nearly 8%, Palantir (PLTR) fell more than 4%, SoundHound.ai (SOUN) fell more than 3%, and Adobe (ADBE) fell 1.6%, but the ultra-micro computer (SMCI) fell nearly 3.6% at the beginning of the session and then turned up in early trading, closing up 2.4%, which will rise for seven consecutive days and hit a record closing record high for seven days.

Popular Chinese concept stocks generally retreated. The Nasdaq Golden Dragon China Index (HXC) closed down 2.7%, falling to its highest closing level since January 12, after rising for two consecutive days. Chinese ETFs KWEB and CQQQ closed down 2.8% and 2.2%, respectively. The two bitcoin mining giants that followed Bitcoin's surge on Monday tumbled, with Canaan Technology and Ebang International closing down 7.5% and 13.9%, respectively. Among other stocks, by the close, Weilai Automobile fell more than 6%, Station B, Dada fell more than 5%, Kingsoft Cloud fell more than 4%, JD.com, NetEase, Xiaopeng Motors fell more than 3%, Baidu fell nearly 3%, Alibaba fell more than 2%, and Li Auto, Pinduoduo, and Tencent fell nearly 2%.

The bank stock index, which has risen for several days, fell and underperformed the market. The overall banking sector benchmark KBW Bank Index (BKX) closed down nearly 3% and will fall back to its lowest closing level since January 18 after two consecutive days of gains, while the regional banking index KBW Nasdaq Regional Banking Index (KRX) closed down 4.5% and the regional bank stock ETF SPDR S&P Regional Bank ETF (KRE) closed down 4.2%, both falling to their lowest closing levels since November 30, 2023 after two consecutive days of gains.

Among regional banks, New York Community Bank (NYCB), which closed slightly lower after surging more than 10% in intraday trading on Monday, fell more than 8% in early trading and closed down more than 6%, while at the close, Allians Bank of the West (WAL) fell nearly 5.8%, Keycorp (KEY) and Zions Bancorporation (ZION) fell more than 4%.

Among the stocks that reported their earnings reports, e-commerce Shopify (SHOP), which reported better-than-expected fourth-quarter results but lower-than-expected free cash flow profit in the first quarter, closed down 13.4%, biotech company Biogen (BIIB), which saw a larger-than-expected decline in revenue and profit in the fourth quarter, closed down 7.4%, hotel chain Marriott International (MAR), which missed its fourth-quarter revenue and first-quarter and full-year earnings guidance, closed down 5.6%, and Hasbro (HAS), which had lower-than-expected fourth-quarter earnings and revenue, fell 10% at the beginning of the session , closing down nearly 1.4%, while software and data services company ZoomInfo Technologies (ZI), which had higher-than-expected fourth-quarter earnings and slightly stronger-than-expected first-quarter guidance, closed up 14.4%, biotech company Bruker (BRKR), which had better-than-expected fourth-quarter revenue and full-year organic growth guidance, closed up 8.8%, and Kellogg's divested WK last year after reporting fourth-quarter earnings and revenue that were higher than expected and raised its 2024 guidance Kellogg (KLG) closed up 8.1%, and ride-hailing giant Lyft (LYFT), which closed down more than 2%, jumped after hours after reporting fourth-quarter EPS earnings and higher-than-expected first-quarter order guidance, with after-hours gains of more than 60% before quickly narrowing to less than 20%.

Among other volatile stocks, a number of cryptocurrency stocks led by Bitcoin fell sharply on Monday, with MicroStrategy (MSTR), Marathon Digital (MARA), and Coinbase (COIN) falling nearly 9%, 11.7%, and 7% respectively in early trading, closing down 4.4%, 5.7%, and 4.7%, respectively, in order to assess possible "potential transactions" After proposing the creation of a special committee, TripAdvisor closed up 13.8%.

In European stocks, the pan-European stock index retreated sharply. The Euro Stoxx 600 index, which updated its closing high since January 6, 2022, fell nearly 1% on Monday, its biggest closing loss since January 17 and refreshed its closing low since January 25. Stock indexes of major European countries fell together, with the Italian stock index, which had risen for three consecutive days, falling about 1% to lead the decline, and German, French, British and Spanish stocks that rebounded on Monday retreated, and German stocks fell from the all-time high of closing on Monday.

Among the sectors, the technology sector, which rose for eight consecutive days to a 23-year high on Monday, closed down 2.7% to lead the decline, affected by the German chip equipment supplier Siltronic reported a 16% decline in sales in 2023 and expected a sharp decline in EBIT earnings in 2024, Siltronic closed down 4.1%, among the constituents of the technology sector, Germany-listed Infineon fell nearly 5%, and Europe's most valuable chip stock, Netherlands-listed ASML, closed down nearly 3.1% , ending an eight-day streak of record highs, and the rate-sensitive property sector fell 2.4% to a more than two-month low since Dec. 1.

Among other stocks, Novo Nordisk, Europe's most valuable pharmaceutical company listed in Denmark, fell nearly 0.5% intraday before turning higher and closing up 0.2%, after retreating on Monday, refreshing the closing record high set by last Friday's rebound.

U.S. Treasury yields rose after CPI, the 10-year yield hit a two-month high, and the two-year yield rose nearly 20 basis points

The US CPI data also dampened investors' confidence in the European Central Bank and the Bank of England to cut interest rates, and European government bond prices fell together, and yields followed the intraday rise of US Treasuries.

By the end of the bond market, the UK 10-year benchmark government bond yield closed at 4.14%, up about 9 basis points during the day, the US CPI was close to 4.17% after the release, refreshing the high since December 4, 2023, the 2-year UK bond yield closed at 4.65%, up about 13 basis points during the day, the US CPI quickly rushed to 4.70% after the release, and then rose above 4.71%, refreshing the high since the end of November 2023, and the benchmark 10-year German bund yield closed at 2.39% , rose about 3 basis points in the day, the US CPI was close to 2.42% after the announcement, refreshing the high since December 1 set last Friday, the 2-year German bond yield closed at 2.75%, up about 7 basis points in the day, and the US CPI rose above 2.78% after the announcement, refreshing the high since December 1.

The U.S. 10-year benchmark Treasury yield fell below 4.13% to refresh the daily low before the release of the U.S. CPI, fell more than 5 basis points during the day, quickly rose above 4.30% after the announcement, and then quickly returned to below 4.30%, and the U.S. stock market regained 4.30% at midday and tested 4.32%, rising nearly 14 basis points in the day, refreshing the high since December 1, 2023, and about 4.31% at the end of the bond market, up about 13 basis points in the day, and rose sharply after roughly closing flat on Monday.

After the release of the CPI, the yield on the 10-year Treasury note rose by more than 10 basis points to above 4.30%

The 2-year U.S. Treasury yield, which is more sensitive to the outlook for interest rates, fell below 4.45% before the CPI was announced, refreshed the daily low, fell about 3 basis points during the day, and quickly rose above 4.60% after the announcement, and the U.S. stock rose above 4.66% at midday, refreshing the high since the first day of the Federal Reserve's interest rate meeting on December 13 set last Friday, and about 4.66% at the end of the bond market, rising nearly 19 basis points in the day, and rebounding sharply after stopping the three-day winning streak on Monday.

U.S. Treasury yields of all maturities rose intraday after the CPI announcement, and short-term bond yields rose first

After the CPI, the dollar index jumped to a three-month high, the yen fell below 150, and Bitcoin fell by $50,000, falling back to $2,000 at one point

The ICE U.S. Dollar Index (DXY), which tracks a basket of six major currencies including the U.S. dollar against the euro, fell below 104.00 before the US CPI was announced, falling nearly 0.2% during the day, and quickly turned up after the CPI was released, regaining 104.00, and the U.S. stock market had risen to 104.90 before the market, updating the high since November 14, 2023, set last week, and rising nearly 0.7% during the day.

By the close of trading on Tuesday, the dollar index was above 104.80, up more than 0.6% on the day, and the Bloomberg dollar spot index, which tracks the exchange rate of the greenback against 10 other currencies, rose more than 0.6%, the highest level in the same period since November 16 last year, and the dollar index rose for two consecutive days.

The U.S. dollar index broke above its 100-day moving average, hitting its highest level since mid-November last year

Among non-U.S. currencies, the yen fell below the 150.00 mark for the first time since November 2023, the U.S. dollar rose against the yen after the U.S. CPI was announced, and U.S. stocks rose above 150.00 before the market, and U.S. stocks approached 150.90 at midday, refreshing the high since November 2023, up about 1% during the day, and U.S. stocks closed above 150.80, up nearly 1% during the day; The euro quickly turned lower against the dollar after the US CPI was announced, and the US stock market had tested 1.0700 before the market, refreshing the low since November 2023, falling more than 0.6% in the day, and the pound fell quickly below 1.2600 against the US dollar after the US CPI was announced, and the US stock market was close to 1.2570 at midday, down more than 0.4% during the day, refreshing the low since February 8, and not approaching the low since December 23, which fell below 1.2520 last Monday.

The offshore yuan (CNH) rose to a daily high of 7.2116 against the US dollar in early European trading, and the US CPI quickly turned down and fell to 7.22 after the release of the US CPI, and the US stock market fell to 7.23 for the first time in early trading since November 17, 2023, and fell to 7.2333 at midday, continuing to refresh the low since November 17, down 207 points from the daily high. At 5:59 on February 14, Beijing time, the offshore yuan was quoted at 7.2314 yuan against the US dollar, down 162 points from the end of New York on Monday, and returned to decline after ending three consecutive losses on Monday.

Bitcoin (BTC) fell for the first time in the last eight days, and rose above $50,300 in European stocks on Tuesday, refreshing the high since December 2023 for two consecutive days, and then falling below the $50,000 mark, and the US CPI accelerated after the announcement, and the US stock market has fallen below $49,000 before the market, and the US stock fell below $48,400 at midday, down about $2,000 from the daily high, down about 4%, and then continued to rise, and the US stock closed above $49,600, down about 1% in the last 24 hours.

Bitcoin found support around $48,500 after falling $50,000 intraday

After the CPI, crude oil gave up most of its gains, U.S. oil rose for seven consecutive days, and U.S. natural gas fell for six consecutive years

International crude oil futures in the Asian market at the beginning of the rise after the basic to maintain a rally, European stocks before the short-term turn down, after the US CPI announcement, the United States WTI crude oil in the United States stocks before the market have been tested $77.00, the United States stocks in the morning had a short-term fall below $77.00, Brent crude oil has been forced down to $82.00, giving up most of the day's gains, after the morning gains expanded. At midday, U.S. oil was near $78.50, up about 2% on the day, and Brent oil rose above $83.20, up 1.5% on the day.

In the end, crude oil collectively closed higher. WTI crude oil futures for March closed up 1.23%, closing up for seven consecutive trading days since Feb. 5, continuing to record the longest consecutive day of gains since September 6, 2023, at $77.87 per barrel, up about 7.8% in seven trading days, and Brent April crude oil futures, which fell slightly on Monday to stop five consecutive days, closed up about 0.94% at $82.77 per barrel, and U.S. oil both refreshed their closing highs since January 26.

U.S. WTI crude oil broke above the 100-day and 200-day moving averages, rising above the 100-day moving average for the first time since July last year

U.S. gasoline and natural gas futures continue to be mixed. NYMEX March gasoline futures closed up nearly 1.2% at $2.3946 a gallon; NYMEX March natural gas futures closed down nearly 4.47% at $1.689/MMBtu, falling for six consecutive days, the longest losing streak since the eight-day losing streak on October 20, 2023, the lowest closing day since July 2020 for two consecutive days, and the lowest for more than three years since at least September 2020 for five consecutive days.

Lunxi rose for six consecutive years, London lead fell for five consecutive years, and gold fell more than 2% from the daily high after CPI, and spot gold fell below $2,000 for the first time in two months

Base metals futures in London were mixed on Tuesday. London nickel, which led the rally, rose more than 1%, rising for two consecutive days to a nearly two-week high since the end of January. Lunxi rose 1%, rising for six consecutive trading days, hitting a new half-year high since August last year for two consecutive days. London copper continues to walk out of the nearly three-month low set last Friday.

The lead fell more than 1%, falling for five consecutive years, and closed below the $2,000 mark, a new low since November 2022. On Monday, the three-day losing streak fell slightly and began to approach the low level set on Friday in more than five months. London aluminum also retreated, starting to fall to the two-week low set on Monday.

New York gold futures in the United States before the CPI was announced had refreshed the daily high of $2047.3, up more than 0.7% in the day, CPI quickly fell below $2030 after the announcement, erasing the gains and turned down, the US stock market in early trading had refreshed the daily low of $2002.8, down nearly 1.5% in the day, down nearly 2.2% from the daily high.

In the end, COMEX April gold futures closed down 1.27%, the biggest closing decline since January 3, at $2,007.2 an ounce, down for four consecutive trading days, refreshing the low closing level since January 17.

Spot gold was close to $2,033 before the announcement of the US CPI, refreshing the intraday high, up more than 0.6% during the day, and the CPI quickly fell below $2,020 after the announcement, the U.S. stock market at the beginning of the session, for the first time since December 13, fell below the $2,000 mark, and the morning had tested $1,990.20, continuing to refresh the low since December 13, falling nearly 1.5% during the day, down nearly 2.1% from the daily high, and the U.S. stock market closed slightly above $1,992, down more than 1% in the day.

Spot gold fell below $2,000 intraday for the first time since the Fed's meeting in December