European and American stocks and bonds rise together, S&P breaks through 5600 points for the first time in history, Tesla rises for the eleventh consecutive time, Taiwan Semiconductor, Apple, and Google hit new highs

Federal Reserve Chairman Powell attended the second day of congressional hearings, continuing to "dovish" by stating that the Fed does not need to wait for inflation to drop below 2% before cutting interest rates, as delaying or insufficient rate cuts may weaken economic activity and employment. The labor market has clearly cooled, and Powell did not make any hawkish comments as expected, leading to an increase in market expectations for a rate cut in September.

Commentators noted that the key point of Powell's testimony is that the Fed's assessment of risk balance is changing, and if supported by future data, the Fed will cut rates in September. Fedwatch shows a 73.3% probability of a rate cut in September, with the market expecting rate cuts in both September and December.

Powell's comments boosted U.S. stocks to new highs, with all three major indices rising by over 1%, led by chip stocks. U.S. bond yields fell across the board, the dollar weakened, and precious metals and London metals rose. Oil prices stopped their three-day decline due to tensions in the Middle East and a significant decrease in crude oil and gasoline inventories according to the weekly report from the U.S. Department of Energy.

Market expectations for a rate cut continue to rise

Traders are focusing on Thursday's CPI data, with U.S. June CPI expected to decrease from 3.3% in May to 3.1% year-on-year, with a slight 0.1% increase month-on-month. Core CPI year-on-year remains at 3.4%, with a 0.2% increase month-on-month. U.S. PPI inflation will be announced on Friday.

Internationally, tension in the French market eased, with market attention shifting to U.S. data, leading to a general rise in European stocks. The Chief Economist of the Bank of England stated that despite moving towards a rate cut, service price inflation and wage growth remain strong, leading to a cooling of rate cut expectations in August, and the pound strengthened to a one-month high.

S&P Nasdaq hits seven consecutive highs, Apple, Google, Taiwan Semiconductor U.S. stocks hit new highs

On Wednesday, July 10th, the tech-heavy Nasdaq hit a new high above 18,600 points, rising over 1.2%; the S&P 500 also hit a new high, breaking above 5,600 points for the first time and rising over 1%, marking a seven-day consecutive rise, the longest this year; the Dow, which gathers blue-chip stocks, rose over 1.1%.

At the close, the S&P and Nasdaq 100 hit new highs for six consecutive days, with the Nasdaq hitting a new closing high for seven consecutive days, the S&P marking the longest consecutive rise this year, and the Dow rising nearly 430 points to its highest level in seven weeks since May 21st, with the Russell small-cap stocks hitting their highest level in nearly a month since June 12th:

The S&P 500 index rose by 56.93 points, or 1.02%, to 5633.91 points. The Dow rose by 429.39 points, or 1.09%, to 39721.36 points. The Nasdaq rose by 218.16 points, or 1.18%, to 18647.45 points.

The Nasdaq 100 rose by 1.09% to a new high, the Nasdaq Technology Market Cap Weighted Index (NDXTMC), which measures the performance of Nasdaq 100 tech sector components, rose by 1.46% to a new high, the Russell 2000 small-cap stocks rose by 1.10%, and the "fear index" VIX rose by 2.72% to 12.85

Major U.S. indices all rose, with rapid expansion in the final trading session

All 11 sectors of the S&P 500 index closed higher, with the S&P Information Technology/Technology sector rising by 1.63%, hitting a new closing high for the fifth consecutive trading day since June 24th, accumulating an 8.11% increase. The Materials sector rose by 1.34%, the Healthcare sector by about 1%, and the Real Estate, Energy, and Telecommunications sectors by around 0.7%. The Consumer Discretionary sector rose by over 0.6%, while the Financial sector rose by 0.42%, being the "worst performer".

Scott Welch, Chief Investment Officer of Certuity, pointed out that some stocks may seem a bit bubbly, but there are currently no signs indicating that the earnings of large tech companies cannot support their high valuations. "The key is that 7 to 10 stocks account for 30% to 40% of the market value of the S&P 500 index. If there is any decline, it will have a magnifying effect."

"Big Tech Seven Sisters" mostly rose by over 1% and closed at daily highs. NVIDIA led the gains, rising by 2.7% to approach its historical high, ranking third in market value in the U.S. stock market; Apple rose by 1.88%, hitting a new closing high for seven consecutive days, maintaining its position as the largest market value; Tesla rose by 0.35%, marking eleven consecutive gains and a cumulative increase of nearly 44.2%, setting a record for the longest continuous gain in a year; Google Class A rose by 1.16%, hitting a new closing high again after two days; Microsoft rose by 1.46%, Meta by 0.88%, and Amazon by 0.23%.

Chip stocks rose across the board, with most rising by over 2%. The Philadelphia Semiconductor Index rose by 2.42%, breaking through 5900 points to set a new high, while the industry ETF SOXX rose by 2.32%. NVIDIA's double long ETF rose by 5.22%; KLA, Applied Materials, Taiwan Semiconductor Manufacturing Company (TSMC), and Arm Holdings all hit historical highs. TSMC ADR rose by 3.54%, refreshing its closing historical high to $191.05, with a closing market value of $990.97635 billion; KLA rose by 1.99%, Applied Materials by 1.39%, Arm Holdings by 2.29%, AMD by 3.87%, Micron Technology by 4%, Qualcomm by 0.81%, Broadcom by 0.66%, and Intel by 0.81%.

Most AI concept stocks rose. SoundHound.ai rose by 22.46%, BigBear.ai by 6.9%, Palantir by 3.76% to a new high, AMD by 0.49%, C3.ai by 1.77%, Snowflake by 0.03%, Dell Technologies by 0.02%, Oracle by 0.99%, while CrowdStrike fell by 2.96% On the news front:

Apple: Apple hopes AI services will drive consumer demand, and plans to increase iPhone shipments by 10% in 2024, with at least 90 million units of iPhone 16 shipped.

SoundHound.ai: On Wednesday, SoundHound announced that its SoundHound Chat AI voice assistant, combined with ChatGPT, has been launched in 11 European markets including Peugeot, Opel, and Vauxhall car brands in Austria, France, Germany, Italy, Spain, and the UK, and is in production. By the end of July, the voice assistant's service will expand to 17 markets, offering 12 different language versions.

Taiwan Semiconductor: Taiwan Semiconductor's June sales surged by 32.9% year-on-year, with second-quarter sales exceeding market expectations. Analysts predict that its second-quarter report to be released on July 18 will show a 30% year-on-year increase in net profit for the quarter.

In response to antitrust investigations by the EU, UK, and US, Microsoft has given up its non-voting observer seat on the OpenAI board, but may not dispel US regulatory concerns. There are reports that Apple will also not serve as an observer on the OpenAI board.

Due to better-than-expected delivery volumes in the second quarter, Goldman Sachs raised Tesla's target price to $248, but maintained a neutral rating and predicted a 5% drop in stock price.

AMD will acquire Europe's largest private AI lab SILO AI in an all-cash deal worth about $6.65 billion, aiming to narrow the gap with Nvidia.

Chinese concept stocks weakened at the close. The KraneShares CSI China Internet ETF (KWEB) reversed to a 0.2% decline, the Invesco China Technology ETF (CQQQ) rose by 0.2%, the Nasdaq Golden Dragon China Index (HXC) rose by 1% before a slight decline, failing to reach 6000 points but hovering at a one-week high.

Among popular stocks, new energy vehicle companies performed strongly, with Li Auto rising by over 3%, XPeng rising by over 7.4%, ZEEKR rising by about 2.3%, and Nio rising by about 2.6%; Baidu rose by 2.66%, Pinduoduo rose by 0.26%, Alibaba rose by 0.41%, while Tencent Holdings (ADR) fell by 0.88%, JD.com fell by 0.22%, NetEase fell by over 3%, TAL Education fell by over 2.1%, Sohu.com fell by 5.71%, and Trip.com fell by 3.77%.

Other stocks with significant fluctuations include:

Eli Lilly rose by 0.78%, continuing to reach a new closing high

Financial and tax software giant Intuit fell more than 4% and plans to lay off 1,800 people, accounting for 10% to increase AI investment.

The world's largest retailer Walmart rose 0.7% to a historic high. Brokerage Jefferies stated that Walmart remains the top stock in terms of AI progress, with a new target price of $77 implying a further 10% increase.

Volkswagen's US stocks rose nearly 3%, while European stocks fell over 2% before closing down 0.3%. The company issued a profit warning and is considering closing its Audi factory in Brussels due to sluggish demand for electric vehicles, which would be the first factory closure in nearly forty years.

Tension in the French market eased, attention shifted to US inflation data, and European stocks rose and closed at daily highs, with the French stock index rising over 0.8%:

The European STOXX 600 index closed up 0.91% at 516.42 points, with almost all sectors rising. The Eurozone STOXX 50 index closed up 1.13% at 4958.86 points, with Bayer in Germany leading the gains with over 3% increase.

Germany's DAX 30 index closed up 0.94%, France's CAC 40 index closed up 0.86%, Italy's FTSE MIB index closed up 1.30%, the UK's FTSE 100 index closed up 0.66%, the Netherlands' AEX index closed up 0.96% to a historic high, and Spain's IBEX 35 index rose 1.59%.

Among the stocks with significant fluctuations, defense stock Kongsberg Gruppen announced a 21% increase in revenue, with its stock price rising by 11.07% to a historic high.

In the "Eleven Arhats" of European stocks, ASM Holding rose over 1.9%, reaching a record high at the close, while Novo Nordisk closed up 1.06%.

BlackRock analysis stated that the UK stock market is likely to attract overseas investors back, as the overwhelming victory of the Labour Party in the election indicates a period of stability in the country's political situation. "We are now overweight on the UK stock market, as the valuation is very attractive."

US bond yields fell slightly by 1-2 basis points, but rose to daily highs during Powell's congressional testimony, while European bond yields fell overall

At the close, the more interest rate-sensitive two-year US Treasury yield fell by 0.43 basis points to 4.6221%, trading in the range of 4.6347%-4.6011% during the session. The benchmark 10-year US Treasury yield fell by 1.57 basis points to 4.2802%, trading in the range of 4.3096%-4.2646% during the session.

US bond yields fell slightly by 1-2 basis points, with long-term bonds outperforming other bonds The two-year US Treasury yield, which is more sensitive to monetary policy, briefly fell more than 2 basis points to a daily low of 4.603% in pre-market trading in the US stock market. During Powell's congressional testimony, the yield climbed continuously and eventually turned positive during the day, trading around 4.63%, but still hovering near the low since April 1.

The 10-year Treasury yield fell more than 3 basis points to a daily low of 4.26% in pre-market trading, rose to near the daily high of 4.30% during Powell's speech, but continued to decline after the midday trading session in the US stock market, eventually dropping 2 basis points to trade below the two-week low of 4.28%.

At midday, the US Treasury auctioned $39 billion in 10-year Treasury notes, with a bid yield of 4.276% (compared to 4.438% on June 11), and a bid-to-cover ratio weakened to 2.58 (from 2.67 previously), causing the 10-year yield to briefly decline by about 1 basis point, falling back to 4.2760%.

The benchmark 10-year German bund yield in the Eurozone fell by 4.7 basis points to 2.533% at the close, trading in the range of 2.552%-2.514% during the day. The two-year German bund yield fell by 2.7 basis points to 2.897%.

The French 10-year bond yield fell by 5.9 basis points, the Italian 10-year bond yield fell by 8.7 basis points, the Spanish 10-year bond yield fell by 6.1 basis points, and the Greek 10-year bond yield fell by 8.4 basis points. The UK 10-year bond yield fell by 3.4 basis points to 4.126%, hitting a daily low of 4.090%.

US EIA: Unexpected Decrease in Oil Inventories, Oil Prices Stop Three-Day Decline and Move Away from Monthly Lows, European and American Natural Gas Pressured to Seven-Week Lows

The decrease in US crude oil and gasoline inventories exceeded expectations, indicating a turnaround in demand, leading to a halt in the three-day decline in oil prices. WTI August crude oil futures closed up $0.69, an increase of nearly 0.85%, at $82.10 per barrel. Brent September crude oil futures closed up $0.42, up more than 0.49%, at $85.08 per barrel.

WTI crude oil in the US rose by $1.25 or 1.5% at one point, breaking through the $82 mark, with the increase narrowing towards the end of the trading session, moving away from the monthly low since July 1, reaching as high as $84.53 last Friday, the highest since April 19. International Brent crude rose by $1 or 1.2%, surpassing $85, reaching as high as $88 last Friday, the highest since April 30.

According to data released by the US Energy Information Administration (EIA), the Independence Day holiday in the US brought an expected boost in demand for aviation fuel, with the four-week seasonal average reaching the highest level since 2019. At the same time, the four-week seasonal average for US gasoline demand also reached the highest level since 2021, while gasoline inventories fell to the lowest level since May. Analysts suggest that the data indicates a strengthening in finished oil demand after the US Independence Day holiday, overshadowing the uncertainty surrounding the timing of the Fed's interest rate cuts U.S. crude oil inventories hit a new low since mid-March last week, decreasing by 3.34 million barrels, exceeding the market's expected decrease of 3 million barrels and analysts' expectations of an increase of 442,000 barrels, with the previous value decreasing by 12.157 million barrels.

The previous decline in oil prices was due to limited impact of Hurricane "Belial" on the refining, production, and export infrastructure along the Gulf Coast, with some oil and gas companies restarting operations on Tuesday. Additionally, the resumption of ceasefire negotiations in the Gaza conflict by Israel has eased concerns about supply disruptions, and OPEC data shows that countries failing to comply with production cuts are still exceeding their output quotas, putting pressure on oil prices.

After the official EIA inventory data was released, U.S. oil prices surged above $82.50.

European benchmark TTF Dutch natural gas futures and ICE UK futures both fell by about 2% at the close, hitting a seven-week low since late May for several consecutive days. The deepest drop in the U.S. natural gas August contract exceeded 2% and briefly fell below $2.30, approaching a seven-week low again.

The U.S. Dollar Approaches 105 Near Four-Week Lows, Pound at One-Month High, Yen Below 161 , Offshore Renminbi Below 7.29

The DXY, a basket of six major currencies against the U.S. dollar, fell slightly and hovered near a four-week low during Powell's testimony, dropping to the 105 level for the day, then narrowing the decline slightly, but stopping after two consecutive days of gains, heading back towards near four-week lows since mid-June.

The Bloomberg Dollar Index fell by 0.10% to 1259.89 points, with an intraday trading range of 1261.81-1259.71 points.

The euro rose slightly against the U.S. dollar, holding above 1.08 for several consecutive days, hovering near a four-week high. The British pound rose by 0.5% to near 1.2850 against the U.S. dollar, surpassing the 1.28 level and hitting the highest level since June 12th during intraday trading.

The Chief Economist of the Bank of England stated that some indicators show upward risks to inflation, leading to a reduction in market expectations of an interest rate cut in August to less than 50%, but a rate cut in September is almost certain, with the pound rising by 0.4% on a weekly basis, accumulating over 1% gains in July.

The Japanese yen fell by 0.3% to 161.85 against the U.S. dollar, remaining below the 161 level, hitting a new one-week low, and nearly reaching 162 last Wednesday, marking the lowest level in thirty-eight years since 1986. The offshore renminbi against the U.S. dollar fell back below 7.29 yuan, with the deepest intraday drop exceeding 50 points, having fallen below 7.31 yuan last week to an eight-month low Mainstream cryptocurrencies fluctuate. The largest market cap leader Bitcoin fell by 0.6%, falling below $58,000 again after briefly rising above $59,000, having dropped from $64,000 to the lowest since February last Friday. The second largest Ethereum rose by over 1% and surpassed $3,100, rising for three consecutive days and further distancing from the low since mid-May.

Bitcoin once rebounded above the 200-day moving average of $58,818, but then fell back again.

Powell's remarks boost September rate cut expectations, gold and silver rise, copper stops two days of decline, tin rises nearly 2% , while aluminum and nickel trade at three-month lows

The decline in U.S. bond yields and the U.S. dollar supported the rise in precious metals. COMEX August gold futures rose 0.42% to $2,377.9 per ounce at the close, while COMEX September silver futures rose slightly to $31.065 per ounce.

Before Powell's congressional testimony hit a daily high, spot gold rose nearly 1% and broke above $2,380, spot silver rose nearly 1.2% and briefly returned above $31; during the hearing, spot gold's gains halved, spot silver plunged and hit a daily low, dropping nearly 0.5%; after the hearing, both gold and silver rose slightly.

Other precious metals such as platinum and palladium rose by over 0.7%.

Gold prices rose in early U.S. trading, but gains were halved later.

Analysts said that Powell's speech in the Senate yesterday did not contain any unexpected hawkish remarks, which to some extent eased the market's view that the Fed will not cut rates this year, enhancing the attractiveness of interest-free gold. If Thursday's CPI and Friday's PPI data show that inflation is cooling, the gold and silver markets will continue to trade sideways.

In addition, the World Gold Council stated on Tuesday that global physically-backed gold exchange-traded funds saw inflows for the second consecutive month in June due to increased holdings by European and Asian listed funds.

London industrial metals fluctuate. The economic barometer "Dr. Copper" stopped two days of decline, rising back above $9,900 towards a three-week high, having risen for six consecutive trading days before Monday. London aluminum fell by 0.5% to trade near a three-month low. London zinc rose by over 1%, London lead fell by 0.6%, London nickel fell by 1.5% to a three-month low, and London tin rose by nearly 2% to the highest level in nearly three months since mid-April