- The Fed kept rates at 4.5%, in line with market expectations. It changed the communication minimally in its statement, but at the same time Powell during the conference emphasized that this was not meant to send a signal to the market
- The market initially reacted to the hawkish change by removing statements about achieving progress in the decline in inflation
- Powell indicates during the conference that the Fed does not need to rush into further reductions. He indicates that there must be a clear decline in inflation and an improvement in the context of achieving the target in the medium term or weakness in the labor market for another cut to occur
- Initially, we saw a clear strengthening of the dollar and declines in index contracts. After 20 minutes of Powell's speech, the US500 clearly rebounds and loses less than 0.2%, also the Nasdaq 100 makes up for the declines
- Nvidia shares continue to lose nearly 5% after Bloomberg citing sources indicated that the US administration is considering new restrictions on sales of Nvidia chips to China.
- Over the past four quarters, sales to China accounted for about 12% of Nvidia's revenue; the company was also developing special H20 chips dedicated to China
- Yields on 10-year U.S. Treasury bonds are trading flat, at around 4.55%. EURUSD tries to make up for initial losses, but still loses 0.15%
- During the European session, we saw sharp increases, driven by ASML's results. The Dutch semiconductor company showed results well above expectations, leading to near double-digit growth.
- Leading the gains on Wall Street today are shares of T-Mobile USA and Starbucks; both stocks gained nearly 10%, following financial results.
- After the U.S. session, Microsoft, Meta Platforms, Tesla and IBM will report results, so volatility in the major benchmarks overseas could still rise, in post-market close trading
- DE40 rose 0.7% today, while the strongest gains were seen in Spain, where intraday gains on the IBEX exceeded 1%
- U.S. crude inventories rose by nearly 3.5 million barrels, gasoline inventories also rose, but distillate inventories fell sharply. Oil is falling to nearly its lowest level this year. Brent is near the $75 per barrel level
- Agricultural commodities are posting sharp increases today. Wheat is the strongest gainer, trading 2.5% higher on the CBOT; coffee futures are also gaining more than 2%
- Bitcoin is gaining nearly 2.5% and approaching $104,000 as Nasdaq contracts erased some of the initial declines, which at one point were up nearly 0.9%
- New U.S. Commerce Secretary Howard Lutnick indicated that tariffs on China should be raised as much as possible, while Mexico and Canada can still avoid high tariffs by meeting restrictions on smuggling fentanyl into the U.S.
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