Heavyweight PCE growth did not exceed expectations, US bonds surged, US stocks rebounded, SPDR S&P 500 achieved its best start in five years, and Bitcoin saw its largest monthly increase in over three years.

The final heavyweight PCE inflation report before the Fed's monetary policy meeting next month has temporarily eased market concerns. The Fed favors inflation indicators not exceeding expected growth released on Thursday showed that the January core PCE price index in the U.S. increased from 0.2% in December to 0.4% on a MoM basis, marking the largest increase in nearly a year, which still meets market expectations.

Compared to the unexpectedly high U.S. CPI and PPI growth reported two weeks ago, this PCE report, although also above the Fed's inflation target of 2%, did not show a further unexpected increase in inflation. This proves that the Fed's wait-and-see attitude is reasonable, easing investors' concerns about the Fed maintaining high interest rates for longer or even raising them again, maintaining the possibility of a rate cut in June.

After the PCE announcement, U.S. Treasury bond prices surged intraday, with yields generally giving back their earlier gains and declining. The yield on the two-year U.S. Treasury bond, sensitive to interest rates, fell below 4.60% for the first time in a week, with a significant rebound in monthly yields, reflecting that market expectations have aligned with the Fed's rate cuts this year after the Fed repeatedly poured cold water on recent rate cuts and the number of rate cuts in December last year.

For over a month, the market's expected total number of rate cuts by the Fed this year has halved from six to three! The probability of a rate cut in March has dropped from 60% to almost zero in over a month, shifting from an expected rate cut in May to an 18% probability of a rate cut.

After the PCE announcement, the U.S. dollar index accelerated its decline, hitting a daily low, but U.S. stocks turned higher intraday, approaching the high set on Wednesday, maintaining the upward momentum in February; U.S. stocks opened higher, with chip stocks like NVIDIA rebounding, supporting the market, and the Nasdaq closing at a record high for the first time in over two years, led by C3.ai, whose revenue in the last quarter exceeded expectations and accelerated growth, driving a major rebound in AI concept stocks. Major stock indices continued to rise in February, with the S&P and Dow posting their best two-month performance in five years. Chinese concept stocks rebounded significantly in February, with related indices posting double-digit gains.

Media reports revealed that senior executives of the world's largest cryptocurrency exchange Binance have been detained by the Nigerian government, causing Bitcoin, which had been rising for days, to briefly fall below $61,000 intraday, dropping over $3,000 from the daily high, failing to continue approaching the high set over two years ago after breaking through the $60,000 mark on Wednesday. Bitcoin has risen by over 40% in February, marking the largest monthly gain in over three years.

Multiple cryptocurrencies surged by double digits in February, with the second largest cryptocurrency Ethereum rising by nearly 50%, following only Bitcoin in market value.

In the commodity market, after the release of the US PCE data, gold rebounded from losses and jumped in price. Both spot gold and gold futures broke through $2050 during trading, reaching a high not seen in nearly a month. However, gold futures have yet to fully recover from the losses incurred earlier in the month. International crude oil failed to rebound successfully, with US oil continuing to fall from the high seen over a week ago, and Brent crude temporarily bidding farewell to the high seen in the past three months. Analysts pointed out that a recent survey showed that OPEC's total oil production in February increased by 900,000 barrels per day compared to January, with Libya's output increasing by 150,000 barrels per day. The increase in OPEC production and the weak US economy may dampen demand and impact oil prices. Unlike gold, which has been declining since the beginning of the year, crude oil has maintained monthly gains into 2024, with tensions in the Middle East in February continuing to support rising oil prices.

S&P 500 rebounds to a historic high, the three major US stock indices have risen for four consecutive months, with chip stocks and Nvidia hitting new highs, and Chinese concept stocks rising by over 10% in February.

The three major US stock indices opened high collectively, with mixed performance during trading. The Nasdaq Composite Index rose nearly 1% in early trading, then turned lower towards the end of the morning session, approaching the daily high again towards the end of the session. The S&P 500 Index initially rose by over 0.5%, but turned lower towards the end of the morning session, reaching a new daily high towards the end of the session. The Dow Jones Industrial Average rose by over 120 points, up over 0.3% in the early session, but turned lower less than an hour after opening. It fluctuated during the morning session, dropping nearly 140 points towards the end of the morning session, a decrease of nearly 0.4%, before rebounding towards the end of the session.

Ultimately, the three major indices closed higher for the first time this week, with the Nasdaq rising by 0.9% to 16091.92 points, setting a new closing historical high since November 19, 2021. The S&P rose by 0.52% to 5096.27 points, surpassing the closing historical high set last Friday. The Dow rose by 47.37 points, an increase of 0.12%, to 38996.39 points, bidding farewell to the three-day decline and the closing low seen since February 21.

Nasdaq achieves historic high for the first time in over two years

The small-cap Russell 2000 index, which is dominated by value stocks, rose by over 1% in early trading and closed up by 0.71%, approaching the closing high seen on February 15 since last Tuesday. The tech-heavy Nasdaq 100 index rose by 0.95%, while the Nasdaq Technology Market Cap Weighted Index (NDXTMC), which measures the performance of technology stocks in the Nasdaq 100, rose by 1.47%. Both indices set new closing historical highs on February 22, surpassing the levels seen last Thursday. In February, major stock indices all saw cumulative gains, with the S&P up 5.17%, the Dow up 2.22%, the Nasdaq up 6.12%, and the Nasdaq 100 up 5.29%. After three consecutive months of decline, they all rose for four consecutive months. Both the S&P and the Dow achieved their largest two-month gains since 2019, while the Russell 2000 rose by 5.52%, rebounding after two months of consecutive gains ending in January.

In the S&P 500, only three sectors closed lower on Thursday, with healthcare down over 0.7%, consumer staples down nearly 0.3%, and a slight decline in financials. Communication services, including Meta and Google, rose by 1.2%, the IT sector, where chip stocks are located, rose by nearly 1.2%, and non-essential consumer goods, including Amazon, rose by 0.9%. In February, all sectors saw gains, with non-essential consumer goods leading at 8.6%, followed by a nearly 7% rise in industrials and over 6% in IT.

Among the seven major tech stocks including Microsoft, Apple, Nvidia, Google's parent company Alphabet, Amazon, Meta, and Tesla, all saw gains on Thursday. However, Tesla, which rose more than 1% against the market on Wednesday, turned lower in early trading on Thursday, falling by nearly 1.8%. It narrowed its losses by midday, closing down by less than 0.1%. With a cumulative gain of 7.8% in February, it rebounded after a sharp 24.6% decline in January.

Among the FAANMG six major tech stocks, Amazon rose by nearly 2.1%, hitting a high not seen since November 2021 last Thursday; Alphabet rose by over 1.5% after falling to a low not seen since January 5; Microsoft rose by over 1.4%, hitting a high not seen since February 12 after two consecutive days of gains; Meta rose by 1.3%, setting a new closing high from last Thursday; Netflix rose by nearly 1.1%, rebounding to a high not seen since December 2021; while Apple turned lower in early trading and closed down by nearly 0.4%, hitting a low not seen since November 6, 2023, set on Monday. The six major tech stocks did not collectively rise in February. Meta rose by 25.6%, Amazon by nearly 14%, Netflix by nearly 7%, Microsoft by about 4%, while Apple fell by nearly 2%, and Alphabet dropped by over 1%.

After several days of overall decline, chip stocks rebounded, outperforming the market. The Philadelphia Semiconductor Index and the Semiconductor Industry ETF SOXX both closed up by 2.7%, hitting record highs. In February, they rose by approximately 10.9% and 11.3% respectively. Nvidia rose by over 2% during trading and closed up by nearly 1.9%, breaking the closing high set on Monday, with a cumulative increase of 28.6% in February, marking the second consecutive month of over 20% increase.

The seven major tech stocks did not collectively rise in February. Nvidia led the gains, while Apple and Google experienced cumulative declines.

On Wednesday, AI concept stocks rebounded significantly. By the closing bell, C3.ai (AI), which reported lower-than-expected losses for the third quarter and revenue growth exceeding expectations by 18%, rose by 24.5%. SoundHound.ai (SOUN) rose by 17%, BigBear.ai (BBAI) by 7%, Super Micro Computer (SMCI) by about 6%, Palantir (PLTR) by 2.7%, and Adobe (ADBE) by 1.5%.

Most popular Chinese concept stocks continued to decline. The Nasdaq Golden Dragon China Index (HXC) initially rose by over 1%, then turned lower, closing down by 0.2%, moving further away from the closing high since December 29, 2023, reached on Tuesday. In February, it rose by 12.3%, offsetting most of the approximately 14% decline in January. The Chinese concept ETFs KWEB and CQQQ closed slightly up and up by over 2% respectively. Among individual stocks, Netease, which announced fourth-quarter revenue and profits below expectations, fell by about 3.9% at the close. Baidu, which fell by 8% after announcing its financial report on Wednesday, dropped by nearly 2%. Pinduoduo fell by nearly 0.4%, JD.com by over 0.8%, Alibaba by over 0.7%, Tencent by 0.1%, while Bilibili rose by 0.1%. The three new forces in the car-making industry all rose: after announcing a cooperation agreement with Volkswagen and accelerating joint development of models, XPeng rose by 8%, Nio by 5.9%, and Li Auto by over 1%.

In Europe, the pan-European stock index stabilized on Wednesday after a decline. The STOXX 600 index closed roughly flat, stabilizing around the closing low since February 21. Major European stock indices continued to fluctuate, with the German stock market hitting a record high for seven consecutive trading days, the UK stock market slightly down for the third consecutive day, and the French stock market falling after several days of rebound, failing to approach the closing high set last Friday. The Spanish and Italian stock indices fell for three and two consecutive days respectively.

In various sectors, insurance led the gains, rising by nearly 1%. Benefiting from the announcement of higher-than-expected operating capital for 2023 and an upward revision of targets for 2025, the Dutch-listed insurance company NN Group surged by 8.1%. The healthcare sector fell by nearly 0.8%, with the Danish-listed European pharmaceutical giant Novo Nordisk dropping by 1.7%; although the European semiconductor stock ASML, listed in the Netherlands, rebounded slightly, closing up by 0.1%. The technology sector still fell by over 0.2%.

The Euro Stoxx 600 index has risen for four consecutive months in February. Stock indexes of various countries did not collectively rise. German, French, and Italian stocks have risen for four consecutive months, while British stocks have slightly declined. The Spanish stock index failed to rebound after two months of consecutive gains in January. Among various sectors, the automotive sector performed the best in February with a cumulative increase of nearly 13%, followed by a 4% increase in the technology sector, insurance and tourism sectors each rising by nearly 4%. Conversely, real estate, sensitive to interest rates, fell by nearly 8%, and the basic resources sector, where mining stocks are located, fell by over 6%.

Post-PCE, U.S. Treasury yields turned lower, with the 2-year yield hitting a one-week low, still up over 40 basis points in February

Before the release of the U.S. PCE data, the yield on the 10-year benchmark U.S. Treasury bond had briefly touched 4.32%, hitting a daily high and rising over 5 basis points intraday. After the PCE data was released, the gains were quickly reversed, and U.S. stocks continued to decline after the market opened, breaking below 4.23% during the session, falling over 9 basis points from the daily high. The yield did not approach the high of 4.35% reached last Friday, the highest since December 1, 2023. By the end of the bond market session, the yield was around 4.25%, down over 1 basis point intraday, after rising for two consecutive days and falling back. In February, the yield rose by approximately 34 basis points, after falling for two consecutive months and rising for two consecutive months.

Before the release of the PCE data, the 2-year U.S. Treasury yield, more sensitive to interest rate expectations, had approached 4.70%, hitting a daily high and rising over 6 basis points intraday. After the PCE data was released, it quickly fell below 4.65%, with U.S. stocks breaking below 4.61% intraday, hitting a low not seen since February 21. By the end of the bond market session, the yield was around 4.62%, down nearly 2 basis points intraday, falling for three consecutive days. In February, the yield rose by approximately 41 basis points, rebounding after falling for three consecutive months.

In February, yields on U.S. Treasury bonds of various maturities generally rose, with short-term yields rising by over 40 basis points, leading the increase, while long-term yields rose by over 20 basis points.

Post-PCE, the U.S. dollar index hit a daily low, rebounding intraday, while Bitcoin fell by over $3000 intraday, with a cumulative increase of over 40% in February

The ICE U.S. Dollar Index (DXY), which tracks the U.S. dollar against a basket of six major currencies including the euro, briefly turned higher during European stock trading. After the release of the U.S. PCE data, the intraday decline widened, with U.S. stocks falling below 103.70 in pre-market trading, approaching the low of February 2 below 103.50. The index fell by 0.3% intraday before rebounding. U.S. stocks turned higher in early trading, reaching 104.20 at midday, approaching the high since February 20 on Wednesday. The US dollar rose by 0.2% during the day.

By the time the US stock market closed on Thursday, the US dollar index was above 104.10, rising nearly 0.2% during the day and more than 0.8% in February; the Bloomberg Dollar Spot Index, which tracks the US dollar against ten other major currencies, edged up, continuing to hit a high since February 19, with a monthly increase of over 0.4%. Both the US dollar index and the Bloomberg Dollar Spot Index have risen for two consecutive months after two months of decline.

Among non-US currencies, the Japanese yen rebounded, hitting a two-week high after the US PCE was announced. The US dollar against the yen continued to fall after the PCE announcement, with US stocks testing 149.20 in early trading, hitting a low since February 12 and rising nearly 1% during the day; the euro against the US dollar rebounded after the US PCE announcement, with pre-market US stocks turning higher. However, after rising above 1.0850, US stocks fell back, dropping below 1.0800 during the session, hitting a low since February 21 and falling nearly 0.4% during the day; the British pound against the US dollar rose above 1.2680 in early US stock trading, hitting a daily high. US stocks fell to 1.2610 at midday, hitting a one-week low and falling nearly 0.4% during the day.

Offshore Chinese Yuan (CNH) against the US dollar hit a daily low of 7.2143 in early Asian trading, then rose and maintained its upward trend. After the US PCE was announced, the increase expanded, with US stocks rising to 7.2035 in early trading, up 106 points during the day, pulling away from the low since February 16 after falling below 7.22 on Wednesday. At 5:59 am Beijing time on March 1, the offshore Chinese Yuan against the US dollar was reported at 7.2078, up 63 points from the New York closing on Wednesday, ending a five-day decline. It fell by 206 points in February after rising for two consecutive months and falling for two months.

Bitcoin (BTC) rose above $63,400 in early US stock trading, then fell below $63,000 and continued to decline, dropping below $61,000 at midday, falling by over $3,000 from the daily high, nearly 5%, and moving away from the intraday high since November 2021 of nearly $64,000. It returned to above $61,000 at the close, hovering around $61,000 at the close of US stocks, rising over 1% in the past 24 hours, with a monthly increase of over 40% in February, marking the largest monthly gain in over three years since 2021.

US oil fell for two consecutive days, with Brent crude futures temporarily departing from a three-month high, both rising for two consecutive months.

International crude oil futures rose in pre-European, intraday, and early US stock trading, but closed lower. In early US stock trading, US WTI crude oil approached $79.30, rising by over 0.9% during the day, while Brent crude's main contract rose above $82.80, up by over 0.8% during the day. After a turnaround in midday US stocks, the decline widened. At midday, U.S. oil fell below $78.00, dropping over 0.7% intraday, while Brent oil tested below $81.50, down nearly 0.8%.

In the end, crude oil collectively closed lower. WTI crude oil futures for April fell over 0.35%, at $78.26 per barrel, marking a two-day decline, moving further away from the closing high since February 16th; Brent crude oil futures for April, which rose for three consecutive days, closed down by $0.06, a decrease of 0.17%, at $83.62 per barrel, temporarily departing from the closing high since November 2023 set on Wednesday. The main contract for Brent crude oil futures for May fell by 0.29%, at $81.91 per barrel, marking a two-day decline.

The February U.S. oil spot contract rose by about 3.2%, while the Brent spot contract rose by about 2.3%, both marking two consecutive months of increase after three months of decline, continuing to rise in 2024.

U.S. WTI crude oil tested above $79 during Thursday's session, rebounding around the end-of-January levels for the fourth time in February.

U.S. gasoline and natural gas futures continued to fluctuate. NYMEX March gasoline futures, which fell on Wednesday, rose by about 1.5%, at $2.3043 per gallon, moving away from the closing low set on February 7th, with a cumulative increase of about 5.5% in February, marking two consecutive months of increase; NYMEX April natural gas futures, which rebounded on Wednesday, fell by 1.326%, at $1.86 per million British thermal units, dropping from the high set on February 9th, with a cumulative decline of about 11.4% in February, marking four consecutive months of decline.

London copper rebounds, London nickel surges 10% in February, PCE boosts gold, gold futures hit four-week high but mark two consecutive months of decline

Most London base metal futures rose on Thursday. Leading the gains, London aluminum rose by over 1.7%, rebounding to a two-week high. London nickel rose by nearly 1.7%, marking a three-day increase and continuing to hit a high not seen in over three months. London zinc, which fell for two consecutive days, rebounded to a three-week high. London copper, which fell to a low not seen in over a week on Wednesday, also rebounded, closing in on $8500. Meanwhile, London lead fell by over 1%, marking a three-day decline to a low not seen in over a week, and London tin, which rose for two consecutive days, temporarily departed from a high seen over a week ago.

Most base metals in February saw cumulative declines, with London aluminum falling by about 4.6%, London zinc by about 4%, marking two consecutive months of decline. London copper, which rose for three consecutive months prior, fell by over 1%, London lead, which rebounded in January, fell by over 2%, while London nickel surged by 10%, marking a significant rebound after five consecutive months of decline, and London tin rose by over 1%, marking three consecutive months of increase.

New York gold futures hit a daily low of $2036 during early European stock trading, quickly rebounding after the U.S. PCE release, surpassing $2050 before the U.S. stock market opened, hitting a daily high of $2059.4 during early U.S. trading, marking an intraday increase of 0.8%. In the end, COMEX April gold futures closed up by 0.59%, at $2054.7 per ounce, hitting a high since February 1st. February gold futures fell by 0.61%, marking the second consecutive monthly decline after three months of gains, continuing to decline since 2024.

Spot gold fell below $2028.20 in the US before the PCE announcement, dropping by about 0.3% intraday. After the PCE announcement, it quickly turned higher, with pre-market US stocks rising above $2050. In early trading, it approached $2050.80, hitting an intraday high since February 2nd, rising by 0.8% intraday. US stocks closed above $2040, up by about 0.4% intraday.

Among the five major commodities of gold, silver, copper, oil, and natural gas, natural gas performed the worst in February, with oil showing the best relative performance.