The Federal Reserve raised interest rates, and the Dow Jones Industrial Average has risen for 13 consecutive days. The S&P 500 Index turned lower from its daily high, while the Chinese concept stocks index reached its highest level in over four months.

The Federal Reserve raised interest rates by 25 basis points as scheduled, with the benchmark interest rate range reaching 5.25%-5.5%, the highest since January 2001. The market speculates that there is only a 38% chance of another rate hike before the end of the year, which means that July may be the last rate hike in this cycle.

Powell stated that if the data allows, there may be a rate hike in September, but he is willing to stop raising rates before inflation falls to 2%. There will be no interest rate cuts this year, but several committee members support multiple rate cuts next year. The two-year US Treasury yield briefly fell to a daily low of 4.82%, and US stocks reached new highs.

US new home sales in June fell to 697,000 households, the first decline since February this year, indicating that rising borrowing costs are curbing momentum in the US housing market. New home sales fell by 2.5% month-on-month, better than the expected 5% decline. The previous value was significantly revised down from 763,000 to 715,000.

The market is waiting for the interest rate decisions of the European Central Bank and the Bank of Japan on Thursday and Friday, with the general expectation that the European Central Bank will raise interest rates by 25 basis points and the Bank of Japan will maintain its ultra-loose monetary policy and yield curve control. The US core PCE inflation for June will be released on Friday.

Gurpreet Gill, Global Macro Strategy Analyst at Goldman Sachs Asset Management, pointed out that recent data is consistent with US interest rates peaking in July. However, if any new signs of inflationary strength are revealed in key data such as the Employment Cost Index and PCE on Friday, it may prolong the rate hike path.

The S&P 500 Index turned from a daily high to a decline in the closing session, while the Dow Jones Industrial Average continued to rise for the 13th consecutive day, marking the longest streak in 36 years. Xpeng Motors surged nearly 27%.

On Wednesday, July 26, US stocks opened lower, with the Dow Jones Industrial Average falling nearly 100 points at the opening, but rebounding one hour later. The tech-heavy Nasdaq hit a daily low and fell the deepest by 0.7% before noon, while the S&P 500 Index fell the deepest by 0.3%. The Russell small-cap stocks outperformed the major indices throughout the day.

During Powell's press conference, US stocks turned higher and reached a daily high, but the S&P 500 Index fell to a daily low towards the end of the conference. In the end, both the S&P 500 and the Nasdaq closed lower, with the S&P 500 falling from its highest level since April last year, and the Nasdaq further away from the high set last Wednesday, which was the highest since April last year.

The Dow Jones Industrial Average continued to rise for the 13th consecutive trading day, reaching the highest level in over 17 months since February 9 last year, and marking the longest streak since January 1987. If it rises for 14 consecutive days, it will be the longest record since June 1897, one year after the creation of the Dow Jones. The Russell small-cap stocks remained close to the high set last Wednesday, which was the highest in over five months:

The S&P 500 Index closed down 0.71 points, or 0.02%, at 4,566.75. The Dow Jones Industrial Average closed up 82.05 points, or 0.23%, at 35,520.12. The Nasdaq closed down 17.27 points, or 0.12%, at 14,127.28. The Nasdaq 100 fell 0.40%, while the Russell 2000 small-cap stocks closed up 0.7%. The VIX fear index fell 4.91% to 13.18.

The 11 sectors of the S&P showed mixed performance. The information technology/technology sector fell by 1.3%, materials fell by 0.3%, energy and consumer discretionary sectors fell by less than 0.1%, while finance and industrial sectors rose by more than 0.6%, and telecommunications services rose by 2.7%. All sectors have seen cumulative gains this month, with energy and finance leading the way.

The Dow has risen for 13 consecutive trading days, marking the longest streak since January 1987.

Most popular tech stocks declined. Apple rose by 0.5%, approaching the all-time high set last Wednesday; Google Class A shares rose nearly 6% to the highest level in over 15 months since April last year, and the largest increase since February 2; Amazon fell by 0.8%, Microsoft fell by nearly 4%, both reaching a two-week low; Netflix fell by over 1% to a one-month low, and Tesla fell by 0.3%, hovering near the monthly low.

"Metaverse" company Meta rose by more than 1%, beating expectations in the second quarter with monthly active users surpassing 3 billion. After-hours trading saw an increase of over 7%. However, concerns remain about the expanding losses of Reality Labs, which will continue to invest in the metaverse.

Chip stocks declined across the board. The Philadelphia Semiconductor Index fell by 1.5% from its one-week high, but remained close to the 18-month high. AMD fell by 2.6% to a one-month low, Intel rose by 0.8% approaching the monthly high, and Nvidia fell by 0.5% from the all-time high set last Tuesday. Texas Instruments fell by over 5% to a two-week low.

Most AI concept stocks rose. C3.ai fell by 3% before rebounding by over 2%, Palantir Technologies hovered near a two-week low with a 0.7% decline, SoundHound.ai, which fell by over 20% yesterday, rebounded by over 5% from a two-month low, and BigBear.ai rose by over 3% from a four-month low.

In terms of news, Alphabet, the parent company of Google, saw accelerated growth in search revenue in the second quarter, and its cloud business unexpectedly did not slow down. Wall Street is optimistic about the integration potential of AI products. Microsoft's cloud business growth rate continued to slow down, and its third-quarter revenue guidance was not favorable, but analysts maintained a buy rating. Google, Microsoft, OpenAI, and other companies jointly launched the Frontier Models Forum, dedicated to ensuring the safe and responsible development of cutting-edge AI models. Texas Instruments' second-quarter financial report exceeded expectations, but weak demand led to unfavorable profit guidance for the third quarter.

Popular Chinese concept stocks showed strong performance at the beginning of trading. The KWEB ETF rose by over 2%, CQQQ rose by 0.5%, and the Nasdaq Golden Dragon China Index (HXC) rose by nearly 3%, approaching 7400 points, the highest level in over four months since March 6, with a three-day consecutive increase and a cumulative gain of 7.6%. In the Nasdaq 100 constituents, JD.com and Pinduoduo rose more than 1%, while Baidu rose 0.6%. Among other stocks, Alibaba and Bilibili rose more than 2%, Tencent ADR rose more than 1%, NIO Inc. rose nearly 11%, Xiaopeng Motors closed up nearly 27%, and Li Auto rose more than 3%.

Xiaopeng Motors once rose more than 42% to its highest level in nearly a year. Volkswagen Group invested $700 million to become the third largest shareholder, planning to jointly develop electric vehicles in China and explore cooperation in the supply chain and other areas. New Oriental rose more than 3%. Although its fourth-quarter revenue exceeded expectations, its EPS was not satisfactory. However, it is expected to turn losses into profits in the fiscal year 2023. Huirong Technology soared nearly 83% after the State Administration for Market Regulation announced the approval of Meiling's acquisition of Huirong Technology's equity with additional conditions. NetEase Youdao rose nearly 6% as it launched the first vertical AI model "Ziyue" in the education field in China.

Banking stocks are approaching recovery from the decline since March 8. The industry benchmark, the KBW Bank Index (BKX) on the Philadelphia Stock Exchange, rose nearly 2% to its highest level since March 10, having hit the lowest point since October 2020 on May 4. The KBW Nasdaq Regional Banking Index (KRX) rose more than 4% to its highest level since March 9, having hit the lowest point since November 2020 on May 11. The SPDR S&P Regional Banking ETF (KRE) rose 4.7% to its highest level since March 10, having hit the lowest point since October 2020 on May 4.

The "Big Four" banks in the United States all rose, with Wells Fargo leading the way with a gain of more than 2%, and Goldman Sachs rising nearly 1%. Regional banks have shown significant upward momentum, with PacWest Bancorp rising 27%, Western Alliance Bancorp rising nearly 12%, and Zions Bancorporation and Keycorp rising about 7%.

In terms of news, Banc of California will acquire PacWest Bancorp to create a new company called Pacific Western. Wells Fargo announced a $30 million stock repurchase plan, and the board of directors approved an increase in dividend payouts.

Other stocks with significant changes include:

Boeing, a component of the Dow Jones Industrial Average, rose nearly 9% to its highest level in 20 months since November 2021. Its second-quarter revenue and free cash flow exceeded expectations, and the loss per share was smaller than expected, benefiting from increased commercial aircraft deliveries.

Another constituent stock, Coca-Cola, rose more than 1% to its highest level in over two months. Its second-quarter revenue and profits exceeded expectations and raised its full-year guidance, benefiting from product price increases. However, it stated that it will not raise prices again this year in developed economies in Europe and America.

One of the largest clothing companies in the United States, Gap, rose nearly 8% to its highest level in three months. It appointed the president and chief operating officer of toy manufacturer Mattel as its CEO. The latter is known for boosting the Barbie brand.

Social media company Snap plunged 20% to a seven-week low. Its second-quarter loss per share was smaller than expected, and revenue exceeded expectations, but its third-quarter guidance was weak. Telecommunications giant AT&T initially fell nearly 2% but then rebounded. Its second-quarter profits and free cash flow exceeded expectations, but revenue was weak.

Satellite broadcasting service provider Dish Network rose more than 9% before falling more than 6%. Reports stated that it began selling its wireless phone service on e-commerce giant Amazon this week.

In European stocks, both the European and American stocks of Rolls-Royce, the British aerospace and defense company, rose more than 20% to their highest level since the outbreak of the COVID-19 pandemic in early 2020. It raised its full-year profit guidance and predicted that it would far exceed performance expectations in the first half of the year.

Except for the Italian stock index, European stocks fell across the board. The pan-European Stoxx 600 index fell by 0.53%, ending a six-day winning streak and falling below a two-month high. The basic resources and personal and household goods sectors fell by 1.8%, and technology stocks fell by more than 1%. The Euro Stoxx 50 index fell by 1%.

The French stock index fell by more than 1.3%, marking its worst single-day performance in nearly three weeks since July 6th. It has fallen for two consecutive days and once fell by nearly 2% during the trading session. Luxury stocks fell across the board, with LVMH, which unexpectedly slowed down its sales in the second quarter in the United States, falling by more than 5%, and Hermes and Kering Group falling by about 2%.

US Treasury yields hit daily lows as Powell's press conference widens the decline, European bond yields rise ahead of ECB rate hike

Short-term US Treasury yields stopped falling before the Fed's decision. The two-year yield, which is more sensitive to monetary policy, rose 1 basis point after midday and returned to 4.90%. The 10-year benchmark bond yield fell 6 basis points before halving its decline, falling below 3.90%, and remained at a two-week high.

Before Powell's press conference, the two-year US Treasury yield rose to a daily high of 4.92%, and during the press conference, it fell to a daily low of 4.82%, reversing intraday and reaching a maximum decline of 7 basis points. The 10-year yield also touched a daily low of 3.85%, and the daily decline expanded to 6.5 basis points.

US Treasury yields hit daily lows as Powell's press conference widens the decline. Market expectations for the European Central Bank to raise interest rates on Thursday also pushed up European bond yields. The yield on 10-year German bonds, the benchmark for the eurozone, rose 6 basis points to 2.49%, while the yield on 2-year bonds also increased slightly. The yield on 2-year UK bonds also rose more than 6 basis points and broke through the 5% level.

Oil prices fall by about 1%, ending a four-day rally and giving up a three-month high, European natural gas prices also fall by about 11%

International oil prices rose and then fell back, giving up a three-month high since April 19. Some analysts believe that the oil market will continue to be trapped in a tug-of-war between global supply tightening and concerns about sluggish demand due to economic slowdown.

WTI September crude oil futures fell $0.85, or 1.07%, to $78.78 per barrel. Brent September futures fell $0.72, or 0.86%, to $82.92 per barrel.

US WTI crude oil fell the most by $1 or 1.3%, falling below $79, while international Brent crude fell the most by $1.31 or 1.6%, briefly falling below $82, ending a four-day rally.

In terms of news, US EIA inventories decreased by 600,000 barrels last week, less than the expected decrease of 2.25 million barrels, and the previous value decreased by nearly 710,000 barrels. Gasoline inventories decreased by nearly 790,000 barrels, also lower than the expected decrease of 1.37 million barrels and the previous value decrease of 1.07 million barrels.

European natural gas, which rose more than 7% for two consecutive days, saw a sharp correction. The regional benchmark TTF Netherlands futures fell nearly 11%, falling below the 30 euro/megawatt-hour integer level again, and ICE UK natural gas also fell nearly 11%, approaching the lowest level in nearly two years since September 2021.

During the press conference, the US dollar fell further and fell below 101, cryptocurrencies rebounded, and offshore renminbi briefly fell below 7.16 yuan

Before the announcement of the Federal Reserve's decision, the US dollar index DXY, which measures against six major currencies, turned from gains to losses, but still held above the 101 level. Although it ended a six-day rally, it hovered around the two-week high since July 11, and a week ago it fell below 100 to a 15-month low.

The euro against the US dollar rebounded slightly and held above the 1.10 level, moving away from the low set on July 12, ending a five-day decline, and rising nearly 1.6% this month. The British pound against the US dollar also rebounded slightly and held above 1.29, further moving away from the two-week low and rising for two consecutive days. Yesterday, it rose for the first time after a seven-day decline, breaking the longest consecutive decline period since March 2020.

The Japanese yen against the US dollar rose above the 141 level, recovering more than half of the decline since last Friday. The offshore renminbi briefly fell below 7.16 yuan, down nearly 270 points from the previous day's close, moving away from the highest level in over five weeks since mid-June. The Australian dollar against the US dollar fell by 0.6%, indicating that inflation in Australia slowed down for two consecutive quarters in the first half of the year, suggesting that the Reserve Bank of Australia may abandon further rate hikes next week. After the announcement of the Federal Reserve's decision, the US dollar index fell to a daily low of 100.863 and broke below the 101 level, with the deepest intraday decline of 0.5%. Non-US currencies extended their gains, with the euro rising above 1.11 against the US dollar, the yen rising above 140, and the offshore renminbi narrowing its decline and rising above 7.15 yuan.

During the press conference, the US dollar extended its decline and broke below 101.

Mainstream cryptocurrencies rose across the board after the Federal Reserve's decision. The largest cryptocurrency, Bitcoin, expanded its gains to 0.7% and reached $29,400, breaking away from the five-week low set on Monday. The second-largest cryptocurrency, Ethereum, rose 1% and approached the $1,880 level.

After the interest rate hike, gold's gains expanded to a near one-week high, while wheat futures fell 6.5%, reaching the deepest level in eight months, and cocoa futures hit a new high.

The weakening of the US dollar and long-term US bond yields boosted the price of gold, with COMEX August gold futures closing up 0.32% at $1,970.10 per ounce.

Before the announcement of the Federal Reserve's decision, spot gold rose by $10 or 0.5%, briefly surpassing the $1,970 level, the highest since July 20, and rising for two consecutive days after a four-day decline on Tuesday.

After the announcement of the Federal Reserve's decision, spot gold fell below $1,966, almost completely giving back its earlier gains. During Powell's press conference, the gains expanded again and reached a daily high of $1,978, refreshing the highest level since July 20.

Some analysts believe that in the medium term, as the Federal Reserve's tightening cycle nears its end, gold may continue to rise. JPMorgan believes that with the Federal Reserve cutting interest rates, gold prices are expected to reach a new historical high next year, and may break through the $2,000 level by the end of this year.

London industrial metals fell across the board, ending two consecutive days of gains:

The "Copper Doctor," which rose 1.8% yesterday, fell 0.6%, and London aluminum, which rose 1.4% yesterday, fell 1.2%, both breaking below the one-week high. London zinc, which rose nearly 3% yesterday, fell 0.6%, breaking away from the highest level in over two months, and London lead fell 1.3%, breaking below the one-month high. London nickel, which rose nearly 5% yesterday, fell nearly 4%, breaking away from the five-week high of $22,000. London tin rose another 0.4% and broke above $29,000, reaching a two-week high. Chicago wheat futures fell 5.3%, dropping 6.5% intraday, marking the largest decline since November last year and pulling away from a five-month high. The cumulative increase since July 13 narrowed to about 12%. Corn futures fell nearly 3%, while soybean futures rose 1.5%. A committee of NATO and Ukraine will discuss grain exports, and the report from the US crop inspection team exceeded expectations, drawing traders' attention to the supply side.

Heavy rain in the main cocoa-producing regions of West Africa is unfavorable for crop growth and threatens the production of chocolate raw materials. It is feared that a supply shortfall will occur for the third consecutive year in the 2023-24 season. London cocoa futures rose 1.5% to the highest level since the 1980s, with a cumulative increase of over 25% this year. New York cocoa futures also rose over 2% to a historic high.