On Wednesday, May 1st, the Federal Reserve as scheduled did not raise interest rates, maintaining the policy rate in the range of 5.25% to 5.50% for the sixth consecutive meeting since July last year. Analysts had previously believed that Fed Chairman Powell would make hawkish remarks at the press conference.
The statement also confirmed market speculation that starting from June, the pace of balance sheet reduction (QT) will slow down, with monthly reduction of US Treasury holdings slowing to $250 billion, slightly higher than Wall Street's expectation of slowing to $300 billion or halving the previous amount.
After the Federal Reserve's decision was announced, U.S. stocks extended gains, bond yields and the U.S. dollar fell further, and gold rose by 1%:
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U.S. stocks extended gains, with the Dow rising over 170 points on the day, the Nasdaq turning from losses to gains, and the S&amp;P 500 index nearly erasing its intraday losses.
<img src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/fa7c8e61-7069-4308-913a-abdc4a08bb85.jpeg?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" alt="Image" original-src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/fa7c8e61-7069-4308-913a-abdc4a08bb85.jpeg"/>
The two-year U.S. Treasury yield fell by nearly 6 basis points and breached the 5% level. The 10-year benchmark bond yield's intraday decline deepened by over 5 basis points to 4.63%.
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The U.S. Dollar Index (DXY) reversed its intraday gains to 106.10. Spot gold's gain expanded to about 1% and rose back above $2300, with a short-term increase of about $6.
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<img src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/8c0adb6d-e490-42f2-9a02-8c8cfd3399be.jpeg?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" alt="Image" original-src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/8c0adb6d-e490-42f2-9a02-8c8cfd3399be.jpeg"/>
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Before Powell's press conference at 2:30 p.m. Eastern Time, U.S. stocks turned higher across the board, gold rose above $2310, and bond yields and the U.S. dollar fluctuated lower:
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The Nasdaq briefly turned lower before rising again, the Dow's gains expanded to 220 points or 0.6%, and the S&amp;P 500 index also turned higher.
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After falling to 4.97%, the two-year U.S. Treasury yield briefly returned above 5%, then the decline widened again to 5 basis points to 4.99%, while the 10-year benchmark bond yield briefly dropped below 4.62% before returning to 4.63%, also down 5 basis points intraday
The US dollar index narrowed its decline at one point, approaching 106.20 before the decision was announced, then stabilized at a 0.1% decline and fell below 106.10. Spot gold held above $2300, rising over 1% and breaking through $2310.
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During Powell's press conference, US stocks and gold saw rapid gains, while US bond yields and the US dollar's decline deepened. Powell mentioned that short-term inflation expectations have risen, and confidence in rate cuts is longer than expected:
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The Dow rose nearly 400 points or 1%, the S&amp;P expanded its gains to 0.6% and continued to hit daily highs, and the Nasdaq rose 150 points or about 1%.
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The 2-year US bond yield fell by 11 basis points to below 4.94%, falling below the 5% mark again. The 10-year bond yield fell by 10 basis points and dropped below 4.60%.
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The US dollar index (DXY) extended its decline to 0.4%, falling below 106 to 105.80. Spot gold's gain expanded to 1.7% and rose above $2320.
Before the Fed's monetary decision was announced, US stocks generally fell, US bond yields declined, gold rose, and the US dollar erased its losses:
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<li>Only the Dow rose among major US indices, with the S&amp;P 500 index and the tech-heavy Nasdaq opening lower and falling further to daily lows by midday. The S&amp;P fell by up to 0.4%, the Nasdaq by up to 0.6%, both hitting new lows for over a week since April 22, while the Dow rose by nearly 147 points or 0.4%, moving away from the near two-week lows set yesterday
Before the announcement of the decision, in the first 5 minutes, the short-term trend of US stocks rose, with the S&amp;P and Nasdaq narrowing their declines to 0.2%, while the Dow once again hit a daily high and maintained a rise of over 120 points. The Russell 2000 small-cap stock index reversed its decline and turned positive, erasing the earlier 0.3% drop.</li>
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The US bond yields collectively declined, moving away from the high levels of the past half year. The two-year yield, which is more sensitive to monetary policy, fell by 5 basis points and hovered around the 5% mark, having risen above 5.04% yesterday, the highest since mid-November last year. The 10-year Treasury yield saw the deepest decline of about 6 basis points to 4.63%, after rising to 4.69% yesterday, and briefly rising above 4.73% last Thursday, the highest since early November last year.
In the first 5 minutes before the decision was announced, the decline in US bond yields deepened again, with the two-year yield falling by over 3 basis points to 5.01% and the 10-year Treasury yield dropping by nearly 4 basis points to 4.64%.
The US Dollar Index (DXY), which measures against a basket of six major currencies, reversed its decline and rose back above 106.20. During the European stock market session, it rose to 106.49, hitting a two-week high since April 16. If it breaks above 106.51, it will reach the highest level since early November last year.
The decline in US bond yields and the initial drop in the US dollar led spot gold to rise above the $2300 mark, with US stocks rising to $2310 or up to 1% at the beginning of the session, breaking free from the four-week low set on April 5 after a 2% drop yesterday.
In the first 5 minutes before the decision was announced, the US Dollar Index was still trading at 106.22, hovering between gains and losses for the day. The increase in spot gold slightly narrowed, still trading around the $2300 mark

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After the Federal Reserve's decision was announced, the US stock market saw an expanded increase, with the Nasdaq turning positive. The US dollar and US bond yields deepened their declines, while gold's increase widened to 1% and broke through $2300, rising by about $6 in the short term. Powell's press conference accelerated the rise in US stocks and gold prices, with the Dow rising nearly 400 points, both the Nasdaq and S&P rising by 1%. The S&P also solidly turned positive, with the two-year US bond yield widening its decline to 11 basis points to less than 4.94%, breaking below the 5% mark, and the 10-year Treasury yield also dropping by 10 basis points

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The Fed's decision caused rapid expansion in US stocks and gold prices, with the Dow and Nasdaq rising by 1%, while US bond yields plummeted