U.S. Bond Yields Hit Stocks; Dow Dips, Nvidia Rises, Gold & Oil Fall

On Wednesday, European and American bond prices generally fell, with rising yields collectively pressuring the stock market. Germany's harmonized CPI for May was slightly higher than expected, accelerating to 2.8%, raising concerns about high inflation stickiness in the eurozone's largest economy, and the benchmark ten-year German bond yield rose by more than 10 basis points during the session. Following the poor demand for two-year and five-year Treasury auctions on Tuesday, Wednesday's $44 billion seven-year U.S. Treasury auction remained weak, with U.S. Treasury yields continuing to rise during the session. The ten-year U.S. Treasury yield broke through 4.60% for the first time in nearly four weeks, and the two-year U.S. Treasury yield approached 5.0%, reaching a four-week high.

Commentators stated that investors are worried that the U.S.'s substantial debt issuance and increased bond market supply will push up yields. The impact of U.S. Treasury auctions on the U.S. stock market is growing, highlighting the ongoing uncertainty surrounding the Federal Reserve's interest rate outlook, which continues to trouble the market. The general rise in bond yields in the U.S. and other global regions is not good news for the stock market, which has a price-to-earnings ratio of 22 times.

Advertisement

European and American stock indices fell in unison on Wednesday, with the pan-European stock index performing at its worst in over a month, and the Dow Jones index falling towards a near one-month low. American Airlines, which lowered its second-quarter sales forecast and announced the CEO's departure next month, plummeted nearly 16% during the session, marking the largest drop in nearly four years, dragging down airline stocks. However, some tech giants showed resilience during the session: Nvidia erased an initial loss of over 2% and turned positive, maintaining the momentum of consecutive historical highs following last week's earnings report; Apple, which announced the schedule for the Worldwide Developers Conference (WWDC) in two weeks, rose by more than 1% at one point. Resource stocks involved in merger and acquisition activities performed differently: Anglo American Resources fell by over 3% after BHP abandoned its nearly $50 billion acquisition efforts, while Marathon Oil, which agreed to a $22.5 billion premium acquisition by ConocoPhillips, once rose by over 10%.

In the foreign exchange market, the U.S. dollar index continued to rise with U.S. Treasury yields, erasing the losses since the release of the U.S. April CPI inflation cooling over two weeks ago. The yen fell to a one-month low against the U.S. dollar, further boosting the strength of the dollar. Cryptocurrencies continued to decline, with Bitcoin falling nearly $2,000 from its daily high, dropping below $68,000, and Ethereum once fell nearly 4% during the session, continuing to fall from the two-month high set on Monday.

In commodities, China's energy-saving and carbon reduction plan proposed strict control over the new capacity of copper and alumina smelting, causing London copper to retreat, while most London industrial metals led by aluminum continued to rise. Amid a strong dollar, gold fell, and New York futures gold just reversed a four-day losing streak and returned to a decline, heading towards a low not seen in over two weeks. International crude oil turned bearish during the session, with Brent crude falling from the monthly high set on Tuesday.

Commentators stated that investors' concerns about weak U.S. gasoline demand and economic data that may lead the Federal Reserve to maintain high interest rates for longer outweighed the impact of tensions in the Middle East. The crack spread of petroleum products such as crude oil and gasoline hit a five-month low, and the spread between the spot month and the next month's gasoline contracts continued to narrow, sending a negative signal about demand. In addition, industry insiders speculated that Saudi Arabia may lower the main crude oil prices for sales to Asia in July, partially hitting oil prices.

The Dow Jones index fell for two consecutive days, Nvidia set a historical high for four days, American Airlines experienced the largest drop in nearly four years, Salesforce plunged after earnings, and C3.ai soared.

The three major U.S. stock indices opened lower collectively, with the morning decline easing somewhat. The Dow Jones Industrial Average fell nearly 440 points, or more than 1.1%, at the start of the session, then narrowed the loss to over 300 points, and the loss expanded again to over 400 points at the end of the session. The S&P 500 index fell by more than 0.8% in the morning, less than 0.6% in the early session, and approached the daily low at the end of the session. The Nasdaq Composite Index fell by nearly 0.9% at the start of the session, more than half of the loss was reduced in the morning, and it fell by less than 0.2% at noon, with the loss expanding somewhat at the end of the session.

Ultimately, all three indices closed lower. The Dow Jones index fell 411.32 points, or 1.06%, to 38,441.54 points, falling for two consecutive days and刷新ing the closing low since May 2. The S&P, which had risen for two consecutive days, fell 0.74% to 5,266.95 points,刷新ing the closing low since last Thursday's 5,214.54 points on May 14. The Nasdaq fell 0.58% to 16,920.58 points, retreating after two consecutive trading days of setting closing historical highs.

The S&P and Dow-related ETFs, SPDR S&P 500 ETF (SPY) and SPDR Dow Jones Industrial Average ETF (DIA), fell 0.7% and 1% respectively, with the latter setting a new low since May 2.The small-cap index dominated by value stocks, the Russell 2000, closed down 1.48%, underperforming the broader market and falling for two consecutive days to its lowest level since May 3rd. The technology-heavy Nasdaq 100 index closed down 0.7%, with the related ETF Invesco QQQ Trust Series 1 (QQQ) also down 0.7%. The Nasdaq Technology Market Value-Weighted Index (NDXTMC), which measures the performance of technology sector components in the Nasdaq 100 index, closed down 0.58%, all falling from their respective historical closing highs set on Tuesday.

Among the Dow Jones components, only Apple, Johnson & Johnson, and Salesforce did not close lower on Wednesday. UnitedHealth (UNH), which closed down nearly 3.8%, led the decline, while Salesforce (CRM), a cloud software giant that closed up nearly 0.7%, announced after the market that its first-quarter revenue and annual guidance were both below expectations, causing its stock to plunge, with a nearly 18% drop in after-hours trading. All sectors of the S&P 500 were down, with energy, which closed down nearly 1.8%, leading the decline, followed by industrials, materials, and utilities, all down more than 1%, and IT, where Nvidia is located, down nearly 0.4%, with the smallest decline.

Including Microsoft, Apple, Nvidia, Google's parent Alphabet, Amazon, Facebook's parent Meta, and Tesla, the "Seven Sisters" of tech giants all fell at the start of trading, with mixed gains and losses throughout the session. Tesla, which fell back on Tuesday, fell nearly 1.6% at the start of trading, briefly turned positive at noon, and closed down 0.3%, approaching the lowest closing level since May 13th set last Thursday.

Among the FAANMG group of six major tech stocks, Meta, which rebounded to its highest closing level since May 15th on Tuesday, closed down nearly 1.2%; Microsoft, which had two consecutive days of gains, fell nearly 1.1% at the start of trading, briefly turned positive during the session, and closed down nearly 0.3%, failing to continue approaching the record closing high set last Wednesday; Alphabet, which had two consecutive days of gains, fell 1% at the start of trading and fluctuated between gains and losses, closing down nearly 0.4%, not continuing to move away from the lowest closing level since May 15th set last Thursday; Amazon, which rebounded on Tuesday, turned positive at the start of trading and rose 1% in the morning, but turned negative at the end of the day, closing down less than 0.1%; Apple, which turned positive at the start of trading and rose 1.1% in the morning, closed up nearly 0.2%, marking three consecutive days of gains, approaching the highest closing level since January 26th set last Tuesday; Evercore ISI, which is optimistic about the potential of new revenue sources such as live events, raised its target price by 7.7% to $700 and maintained its outperform rating, causing Netflix to turn positive at the start of trading and rise more than 2% in the morning, closing up nearly 0.9%, marking three consecutive days of gains and刷新ing the highest closing level since November 2021 set last Tuesday.

Overall, chip stocks fell back, with the Philadelphia Semiconductor Index and the semiconductor industry ETF SOXX both falling more than 2% at the start of trading, narrowing the decline to less than 2% during the morning, and then expanding again at the end of the day, closing down nearly 1.9% and nearly 2.1% respectively, falling from the historical closing highs set over the previous two trading days. Among chip stocks, Nvidia fell more than 2.6% at the start of trading, turned positive with a nearly 0.9% gain in the morning, fluctuated between gains and losses several times, and then turned positive again in the afternoon, closing up 0.8%, marking four consecutive trading days of record closing highs and a cumulative increase of more than 20% since its earnings report last week; at the close, AMD fell nearly 3.8%, Arm and TSMC's US-listed stocks fell more than 3%, Intel fell 3%, Qualcomm fell more than 2%, and Broadcom fell more than 1%.

Most AI concept stocks fell. The AI and robotics ETF Glb X Robotics & Artificial Intelligence ETF (BOTZ) closed down 1.6%. By the close, SoundHound.ai (SOUN) and BigBear.ai (BBAI) fell more than 4%, Super Micro Computer (SMCI) fell 4%, Astera Labs (ALAB) fell more than 2%, Oracle (ORCL) fell 0.6%, Palantir (PLTR) fell 0.5%, while Dell (DELL) rose nearly 8%. After announcing that its first-quarter loss was lower than expected and its revenue and full-year guidance were both higher than expected, C3.ai, which closed down nearly 0.8%, rose more than 10% in after-hours trading.

Popular Chinese concept stocks generally fell back. The Nasdaq Golden Dragon China Index (HXC) fell 1.7% at the start of trading and, along with the related ETF Invesco Golden Dragon China ETF (PGJ), closed down nearly 0.9% and about 0.8% respectively,刷新ing the lowest closing level since May 1st set last Friday after ending a five-day losing streak on Tuesday. Chinese concept ETFs KWEB and CQQQ closed down 1.4% and 0.7% respectively. New forces in car manufacturing generally fell, with Zeekr falling 4.5%, Xiaopeng Motors falling 2.7%, Li Auto falling more than 1%, and NIO, which turned positive at the start of trading, rising 0.6%. Among other stocks, Bilibili fell 2% at the close, Alibaba, JD.com, and Tencent's pink sheet stocks fell nearly 2%, NetEase fell 1.8%, Baidu fell more than 1%, while Pinduoduo, which turned positive at the start of trading, rose 1%.

Bank stock indices fell for two consecutive days. The overall banking industry indicator KBW Bank Index (BKX) closed down nearly 1.2%,刷新ing the lowest level since May 2nd; the regional bank index KBW Nasdaq Regional Banking Index (KRX) closed down 2.1%,刷新ing the lowest level since April 18th, and the regional bank stock ETF SPDR S&P Regional Banking ETF (KRE) closed down 2.4%,刷新ing the lowest level since April 30th.

Among more volatile stocks, after announcing that it expects second-quarter unit revenue to decline by up to 6% year-over-year, American Airlines (AAL) fell more than 15.8% in the morning, marking the largest intraday drop since June 2020, and closed down 13.5%, dragging down other airlines. By the close, Southwest Airlines (LUV) fell 3.8%, JetBlue Airways (JBLU) fell 3.5%, Delta Air Lines (DAL) fell nearly 0.8%, the global airline industry ETF JETS fell 2.3%, and United Airlines (UAL), which fell 4.7% at the start of trading, turned positive in the afternoon and closed up nearly 2.4%; after announcing a 2023 operating loss of $286 million and withdrawing its 2024 production guidance, Faraday Future (FFIE) closed down 62%; GameStop (GME), which raised more than $900 million in a secondary offering last Friday and rose 25% on Tuesday, fell back, closing down 10.7%; after announcing that its CEO will resign and step down from the board on June 1st, software company UiPath (PATH) fell more than 30% in after-hours trading.

After ConocoPhillips agreed to acquire it in a $17.1 billion all-stock deal, Marathon Oil (MRO) rose nearly 11% at the start of trading and closed up 8.4%, while ConocoPhillips (COP) closed down 3.1%; after announcing that its first-quarter same-store sales rose 5.3%, far exceeding expectations, and raising its full-year earnings guidance, the athletic footwear and apparel retailer DICK'S Sporting Goods (DKS) closed up 15.9%; after announcing that its second-quarter earnings and revenue exceeded expectations, HP (HPQ) rose more than 5% in after-hours trading.In terms of European stocks, Germany's May CPI accelerated growth, causing market concerns that the central bank's high interest rates will be maintained for longer, leading to a two-day consecutive decline in the pan-European stock index with a significantly larger drop than Tuesday. The Stoxx Europe 600 Index closed down by 1.08%, marking the largest closing drop since April 16th and hitting a new low since May 6th. Major European national stock indices fell for two consecutive days, with German, French, Italian, and Spanish stocks falling by more than 1%, and the UK stocks, which were closed on Monday, fell for six consecutive trading days.

Among the sectors, basic resources, where mining stocks are located, closed down by 2%, leading the decline with utilities down by 1.8%. In individual stocks, after BHP Billiton abandoned a nearly $50 billion acquisition and stated it would not make a formal acquisition offer, Anglo American Resources, listed in London, closed down by nearly 3.1%, while BHP Billiton closed up by more than 0.1%. After media reports that a judge asked government prosecutors to investigate suspected fraudulent behavior related to the 2017 bailout of the bank, Italian bank Monte dei Paschi di Siena (BNPS) fell by 5.4%.

The yield on 10-year German bonds rose by 10 basis points, and the yield on 10-year US Treasury bonds reached a nearly four-week high.

After the release of Germany's May CPI, European government bond prices accelerated their decline, and yields continued to climb, with Eurozone government bond yields rising for two consecutive days. By the end of the bond market, the UK's 10-year benchmark government bond yield was about 4.40%, up by about 12 basis points during the day; the 2-year UK bond yield was about 4.54%, up by about 5 basis points during the day; the benchmark 10-year German government bond yield was about 2.69%, up by about 10 basis points during the day, reaching a high for the same period since November last year, approaching 2.70% at one point, and the 2-year German bond yield was about 3.09%, up by about 4 basis points during the day.

The US Treasury Bond ETF, iShares US Treasury Bond ETF (GOVT), closed down by 0.38%, falling for two consecutive days to a low not seen since May 2nd. The yield on the 10-year US benchmark Treasury bond was on the rise throughout the day, hitting a daily low of 4.54% in the Asian morning session, accelerating its climb before the US stock market opened, breaking through 4.60% in the early US stock market session, and reaching above 4.63% after the seven-year US Treasury bond auction during the midday session, reaching a high not seen since May 2nd. By the end of the bond market, it was about 4.61%, up by about 6 basis points during the day, marking two consecutive days of increases.

The 2-year US Treasury bond yield, which is more sensitive to interest rate prospects, once fell below 4.95% before the US stock market opened, hitting a daily low, down by about 3 basis points during the day. It erased its decline and turned positive in the early US stock market session, approaching 5.0% after the seven-year US Treasury bond auction during the midday session,刷新ing a high not seen since May 1st for two consecutive days, up by more than 2 basis points during the day, and then gradually giving up its gains. By the end of the bond market, it was about 4.97%, down by less than 1 basis point during the day, falling after four consecutive days of increases.

The US Dollar Index hit a two-week high, the Japanese yen a four-week low, and offshore renminbi briefly broke through 7.27 during the session.

The ICE US Dollar Index (DXY), which tracks a basket of exchange rates of the US dollar against the euro and five other major currencies, basically maintained its upward trend throughout Wednesday, only briefly turning down and falling below 104.60 to hit a daily low before the European stock market session. It then accelerated its upward trend before the US stock market session, breaking through 105.00 in the early US stock market session, and rising above 105.10 during the midday session, up by 0.5% during the day, reaching a high not seen since last Thursday since May 13th, surpassing the level before the release of the US April CPI on May 15th.

By the end of the Wednesday foreign exchange market, the US Dollar Index was above 105.10, up by nearly 0.5% during the day, rising after roughly closing flat on Tuesday; the Bloomberg Dollar Spot Index, which tracks the exchange rates of the US dollar against ten other currencies, was up by nearly 0.5% during the day, marking two consecutive days of increases, reaching a high for the same period since May 8th.

Among non-US currencies, the Japanese yen fell for two consecutive days to a four-week low, with the US dollar against the Japanese yen once rising above 157.70 during the US stock market midday session, reaching a high not seen since May 1st, up by more than 0.3% during the day; the euro against the US dollar tested 1.2800 during the late US stock market session, falling away from the high of nearly 1.0890 on Tuesday,刷新ing a high not seen since May 16th, the British pound against the US dollar touched 1.2700 during the late US stock market session, falling away from the high of 1.2800 on Tuesday,刷新ing a high not seen since March 21st, both falling by nearly 0.5% during the day.Offshore Renminbi (CNH) against the US dollar refreshed its daily high to 7.2632 in the early Asian market, quickly turned down and maintained its downward trend. In the early US stock market, it fell to 7.2758, refreshing its intraday low since April 16th. At 4:59 AM Beijing time on May 30th, the offshore Renminbi against the US dollar was reported at 7.2735 yuan, down 99 points from Tuesday's New York closing, marking two consecutive days of decline.

Bitcoin (BTC) fell for two consecutive days. It once broke through $68,800 during the Asian market and tested $69,000 on some platforms to refresh its daily high, then continued to decline. During the US stock market, it broke through $67,200, and some platforms fell below $67,300, refreshing its low since last Friday, May 24th. It fell more than $1,700 from its daily high, a drop of over 2%. At the close of the US stock market, it was above $67,300, with a drop of over 1% in the last 24 hours.

Ethereum (ETH), the second-largest cryptocurrency by market value after Bitcoin, once broke through $3,880 during the Asian market to refresh its daily high. It once fell below $3,750 during the US stock market lunch break, a drop of nearly 4% from its daily high. At the close of the US stock market, it hovered around $3,750, with a drop of over 2% in the last 24 hours, continuing to fall away from the high of $3,970 on Monday, which was the highest since March 14th.

Brent crude oil stopped its two-day rise and fell from its monthly high. International crude oil futures turned down on Wednesday. When European stocks refreshed their daily high, US WTI crude oil broke through $80.60, with a daily increase of nearly 1%, and Brent crude oil rose above $85, with a daily increase of more than 0.9%. It then continued to fall, turned down in the early US stock market, and refreshed its daily low at the end of the market. US oil tested $79, with a daily drop of slightly more than 1%, and Brent oil broke through $83.30, with a daily drop of 1.1%.

In the end, both crude oils fell back. WTI July crude oil futures closed down 0.75%, at $79.23 per barrel, bidding farewell to the closing high since May 17th on Tuesday; Brent July crude oil futures, which had risen for two consecutive days to the highest since April 30th on Tuesday, closed down 0.73%, at $83.60 per barrel.

US oil ETF United States Oil Fund LP (USO) and Brent oil ETF United Sttes Brent Oil Fund LP (BNO) both closed down 1.4% and 1.3%, respectively, after rising for two consecutive days to the closing high since April 30th.

US gasoline and natural gas futures both fell back. NYMEX June gasoline futures closed down about 1.8%, at $2.4644 per gallon, refreshing the low since May 14th last Wednesday; NYMEX June natural gas futures closed down more than 3.74%, at $2.4930 per million British thermal units, refreshing the low since May 15th.

London basic metal futures mostly continued to rise on Wednesday. Leading伦铝 rose more than 1%, marking three consecutive trading days of gains and two consecutive days of new highs since June 2022.伦镍 rose for three consecutive days, and伦锡 rose for two consecutive days, both hitting weekly highs.伦锌 rose slightly, continuing to move away from the weekly low set last Friday. However,伦铜 fell back after just stopping its four-day decline on Tuesday, failing to approach the historical high set on Monday last week.伦铅 fell 1%, giving up half of Monday's rebound, and fell towards the weekly low set last Friday.New York copper futures fell back, with the COMEX July copper contract, which had hit a low not seen since May 10th last Friday, closing down 1.3% on Tuesday at $4.791 per pound, having fallen nearly 2.2% at one point during the session. The U.S. Copper Index Fund (CPER), which rebounded by over 2% on Tuesday, closed down 1.84%, nearing the low point it reached on Friday since May 10th.

As the Asian market opened and hit a daily high, New York gold futures rose to $2,363.7, with spot gold trading above $2,362, before generally trending downward. When U.S. stocks opened and hit a daily low, gold futures fell to $2,334.2, down more than 0.9% for the day, while spot gold fell below $2,335, down 1.1%, heading towards the lows since May 9th that were broken on Friday after both broke below $2,330.

By the close of gold futures during the U.S. stock market lunchtime, the COMEX June gold futures, which reversed the four-day losing streak from last Friday, closed down 0.65% on Tuesday, at $2,341.2 per ounce, starting to fall towards the closing low it hit on Friday since May 8th. The SPDR Gold Trust (GLD), which had risen for two consecutive days, closed down 0.93%, beginning to approach the low it hit on last Thursday since May 8th. At the close of the U.S. stock market, spot gold was trading below $2,340, down nearly 1% for the day.

New York silver futures closed higher for three consecutive trading sessions, with the COMEX July silver futures closing up 0.73%, at $32.373 per ounce, hitting a high not seen since May 20th for two consecutive days. The iShares Silver Trust SLV, which had risen for two days in a row, closed down 0.24%.