May PMI hits US stocks and bonds hard, while NVIDIA shines alone.
Overnight, due to the better-than-expected preliminary value of the US May Composite PMI, rising to a two-year high, showing a rapid increase in the price index, indicating stubborn inflation, once again crushing rate cut expectations, the market suffered a &#34;double blow&#34; to stocks and bonds, with commodities and cryptocurrencies both plummeting.
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All three major indices closed lower. The Dow fell over 1% to a two-week low, the Nasdaq fell 0.39%, and the S&amp;P 500 fell below 5300 points, hitting its lowest closing level since May 14.
Under the pressure of the S&amp;P index, almost all large-cap stocks except NVIDIA were &#34;wiped out&#34;, with only the IT sector where NVIDIA is located barely up 0.6%.
NVIDIA rose by 12% at one point during the trading day, hitting an intraday historical high, closing up 9.3%, breaking the $1000 mark for the first time in history, and the company's market value also surpassed $2.5 trillion for the first time.
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Boosted by NVIDIA, the &#34;Seven Sisters&#34; of tech stocks initially rose collectively, but lost momentum during the day and gave back all gains by the close.
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US bond yields rose collectively. After the PMI data was released, the two-year US bond yield, which is more sensitive to interest rate policies, rose by nearly 10 basis points to a two-week high, climbing 7 basis points to 4.94% during the day; the 10-year US bond yield approached 4.50% at one point, rising by about 6 basis points during the day.
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Pricing in the swap market shows that expectations for a Fed rate cut have been pushed back from November to December.
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In terms of commodities and cryptocurrencies, oil, gold, and Bitcoin all plummeted.
Crude oil plummeted, falling for four consecutive days, with US oil closing down 0.9% at $76.87 per barrel; Brent crude fell 0.66% to $81.36 per barrel, both hitting a three-month low
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Spot gold opened low and continued to decline after the PMI data was released, dropping nearly 2% or about $50 intraday, closing at around $2328.55 per ounce.
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Bitcoin experienced accelerated selling pressure when it approached $70,000, plunging over $3000 in the short term, hovering around $66,800 at the close, with a daily decline of over 4%.
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However, Ethereum's upward momentum continued due to the announcement by the Securities and Exchange Commission (SEC) of the Ethereum spot ETF trading plan.
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The US dollar also slightly strengthened. With the decline in rate cut expectations, the Federal Reserve may maintain interest rates at the current high levels for a longer period, prompting a rebound in the US dollar, rising 0.09% intraday and closing above 105.1.
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How will the market perform next?
Considering the &#34;hawkish&#34; tone of the Federal Reserve meeting minutes released the previous day, coupled with recent statements from several Federal Reserve officials indicating a reluctance to cut rates, market confidence may remain weak.
Chris Low of FHN Financial stated:
<blockquote>
&#34;The meeting minutes remind people that although the Federal Reserve is unlikely to raise rates again, if inflation performs poorly, a rate hike is not ruled out.&#34;
</blockquote>
However, Nvidia's strong earnings momentum and solid economic growth may also provide upward momentum for the S&amp;P.
Andrew Tyler of JP Morgan's trading department commented:
<blockquote>
&#34;With the continued impact of the AI theme and sound fundamentals, we may continue to set new historical highs.&#34;
</blockquote>

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