"Good news is bad news"! Overnight, investors "sell everything" except for NVIDIA

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 "double blow" to stocks and bonds, with commodities and cryptocurrencies both plummeting.

All three major indices closed lower. The Dow fell over 1% to a two-week low, the Nasdaq fell 0.39%, and the S&P 500 fell below 5300 points, hitting its lowest closing level since May 14.

Under the pressure of the S&P index, almost all large-cap stocks except NVIDIA were "wiped out", 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.

Boosted by NVIDIA, the "Seven Sisters" of tech stocks initially rose collectively, but lost momentum during the day and gave back all gains by the close.

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.

Pricing in the swap market shows that expectations for a Fed rate cut have been pushed back from November to December.

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

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.

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%.

However, Ethereum's upward momentum continued due to the announcement by the Securities and Exchange Commission (SEC) of the Ethereum spot ETF trading plan.

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.

How will the market perform next?

Considering the "hawkish" 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:

"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."

However, Nvidia's strong earnings momentum and solid economic growth may also provide upward momentum for the S&P.

Andrew Tyler of JP Morgan's trading department commented:

"With the continued impact of the AI theme and sound fundamentals, we may continue to set new historical highs."