Financial Daily: Higher-than-expected US PPI fuels inflation concerns; Fed's inaction causes all three major US stock indexes to close down over 1.3%.

- Focus

– The US February PPI index rose more than expected, and the situation in the Middle East may lead to accelerating inflation.

– The Federal Reserve kept interest rates unchanged, with Powell stating that uncertainty about the US outlook is rising; several Fed officials lean toward reducing future rate cuts.

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- Stock Market

[US Market] All three major US stock indexes closed lower

Geopolitical conflict in the Middle East escalated further, with multiple energy infrastructures in the region attacked and damaged. Iran stated it would expand its strikes to all energy infrastructures of US and Israeli allies, compounded by significantly higher-than-expected US February PPI data, fueling market concerns about inflation. The US stock market came under pressure and declined, with the Fed maintaining interest rates unchanged during the US stock market close; all three major US indexes closed down, with losses exceeding 1.3%.

At the close, the S&P 500 Index fell 1.36% to 6,624.70 points; the Nasdaq Index dropped 1.46% to 22,152.421 points; and the Dow Jones Industrial Average declined 1.63% to 46,225.15 points. The VIX panic index rose 12.16% to 25.09 points. U.S. sector ETFs generally declined, with consumer discretionary and consumer staples ETFs falling more than 2%. Only the oil and gas sector ETF gained strength, rising nearly 2%.

The U.S. tech seven giants index fell 1.47%, with Amazon dropping nearly 2.5%, Microsoft down 1.91%, Apple and Tesla both falling over 1.6%, and Meta and Google A both dropping more than 1%. The Nasdaq Golden Dragon China Index fell 2.06% to 7,015.70 points. Among popular Chinese stocks, Tencent Music continued its slump with a drop of over 9%, Li Auto fell over 5%, Tencent Holdings dropped 4.7%, and Kingsoft Cloud surged over 12%. In individual stock performances, Taiwan Semiconductor fell 1.8%, Micron Technology's shares initially dropped nearly 6% after announcing its earnings but later returned to the previous trading day’s level.

[European Market] Major European national indices were generally weak on Wednesday.

Major European national indices were generally weak on Wednesday. At the close, the pan-European STOXX 600 Index fell 0.70% to 598.25 points, and the pan-European STOXX 50 Index dropped 0.56% to 5,736.85 points.

The German DAX 30 Index fell 0.86% to 23,527.63 points; the French CAC 40 Index dropped 0.06% to 7,969.88 points; and the UK FTSE 100 Index declined 0.94% to 10,305.29 points.

[Asian Market] Asian stock markets showed mixed performance on Tuesday, with South Korea's index rising over 1.5%

Asian markets performed strongly on Wednesday, with Japanese indices rising over 2% and South Korean indices gaining more than 5%. At the close, the Nikkei 225 Index rose 2.87% to 55,239.40 points, and the Japan TOPIX Index climbed 2.49% to 3,717.41 points. The South Korean KOSPI Index surged 5.04% to 5,925.03 points.

[Hong Kong Market] Hong Kong's three major indices all closed higher.

Hong Kong stocks strengthened in the afternoon on Wednesday, with all three major indices turning from losses to gains. At the close, the Hang Seng Index rose 0.61% to 26,025.42 points; the Hang Seng Tech Index gained 0.01% to 5,108.30 points; and the Hang Seng China Enterprises Index increased 0.10% to 8,835.50 points. Sector-wise, AI application stocks performed well, with MiniMax seeing a significant rise of nearly 20% due to its sandbox deployment collaboration with Tencent Cloud and new generation Agent large model. Zhipu and Kingsoft Cloud both surged over 18%. Storage concept stocks broadly rose amid concerns over Samsung's possible insufficient supply capacity, with Gigadevice rising 11.5% and Montage Technology climbing nearly 8.6%. Individual stock performances included Alibaba and Baidu Group rising over 2%, Huahong Semiconductor gaining nearly 4%, while Li Auto fell over 6% and Tencent Music plummeted over 20%.

A-Share Market: The three major A-share indices closed higher, with the ChiNext Index gaining over 2%.

A-shares steadily recovered after an initial drop at the open, with all three major indices closing higher, and the ChiNext Index surging over 2%. At the close, the Shanghai Composite Index rose 0.32% to 4,062.98 points; the Shenzhen Component Index climbed 1.05% to 14,187.80 points; and the ChiNext Index gained 2.02% to 3,346.37 points. Sector-wise, storage chip stocks broadly rose amid expectations that a planned May strike by Samsung Electronics' union could lead to a shortage of memory chips. Tongyou Technology, Shenke Technology, and West Test closed up 20%, while Guanghe Technology and Chengbang Shares hit their daily limits. CPO-related concepts saw strong gains, with Zhongbei Communications and Riscom Technology hitting their daily limit. Computing power leasing concept stocks also performed well, with Oriental Guoxin, Halo New Media, and other stocks rising over 10%.

– Bonds

[U.S. Bonds] U.S. Treasury yields turned positive.

U.S. Treasury yields turned positive, with the U.S. 10-year Treasury yield rising 6.65 basis points to 4.2650%, and the U.S. two-year Treasury yield increasing 9.93 basis points to 3.7729% in late New York trading.

[Non-US Bonds] Yields on 10-year European government bonds generally rose

Yields on 10-year European government bonds generally rose on Wednesday. At the close of European trading, Germany's 10-year bond yield rose 3.4 basis points to 2.940%, the UK 10-year bond yield increased by 4.8 basis points to 4.742%, and France's 10-year bond yield rose 5.1 basis points to 3.607%.

[China Bond Market] Government bond futures moved higher across the board on Wednesday

Government bond futures moved higher across the board on Wednesday. At the close, the 30-year main contract rose 0.23%, the 10-year main contract rose 0.12%, the 5-year main contract increased by 0.08%, and the 2-year main contract gained 0.04%.

– Foreign exchange

[US Dollar] The US dollar rose, with the ICE US Dollar Index up 0.72%

The US dollar gradually strengthened after the Federal Reserve kept interest rates unchanged, partially recovering from its losses over the previous two days. At the New York close, the ICE US Dollar Index rose 0.72% to 100.04, while the Bloomberg Dollar Index climbed to 1,212.68.

[Non-US Currencies] The US dollar strengthened against most major currencies, with the yen falling more than 0.5%

The US dollar strengthened against most major global currencies, with the yen falling more than 0.5%. At the New York close, the dollar fell 0.54% against the yen to 159.80 yen. The euro dropped 0.75% against the dollar, the pound fell 0.74% against the dollar, and the Australian dollar declined more than 1.1% against the dollar.

[Chinese Yuan] The offshore yuan traded at 6.9004 per US dollar

At the New York close, the offshore yuan rose 174 points against the US dollar compared to the previous trading day’s close, trading at 6.9004 per dollar. The onshore yuan fell 29 points against the US dollar from the previous trading day’s closing price, ending at 6.8879 per dollar.

[Cryptocurrency] Cryptocurrency market declines, Bitcoin falls by approximately 4.6%

Panic sentiment spread across the market on Wednesday, and a decline in investors' risk appetite led to a drop in the cryptocurrency market, with Bitcoin experiencing a sharp plunge. Bitcoin fell by about 4.6%, with prices dropping to the $71,000 level; Ethereum fell by around 6%.

– Product

[Energy] Escalation of Middle East conflict causes wide fluctuations in crude oil futures prices

Due to multiple energy infrastructures being attacked and damaged as a result of the Middle East conflict, oil prices fluctuated widely. US crude oil futures rose by 0.11%, settling at $96.32 per barrel.

[Precious Metals] Precious metals tumble, spot gold price drops below the $5,000 mark

Precious Metals:Gold prices plunged over 3.5%, with spot gold falling below the $5,000 mark. In New York trading late hours, spot gold dropped by 3.67% to $4,822.05 per ounce; US gold futures declined by 3.72% to $4,821.90 per ounce.

Metals Futures Market:Precious metals prices fell broadly, with spot silver down 4.83% to $75.46 per ounce; US silver futures dropped by 5.53% to $75.515 per ounce. US copper futures fell approximately 4.8% to $5.4930 per pound; spot platinum dropped by 4.92%, and spot palladium fell by 7.53%.

[Disclaimer]

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