Powell hints at rate cut in September, global assets in a frenzy, stocks, bonds, commodities, and digital currencies all rise, US dollar hits a one-year low

Federal Reserve Chairman Powell issued the clearest signal to date at the Jackson Hole Global Central Bank Annual Meeting, hinting that the Fed will begin cutting interest rates in September. He also believes that the U.S. economy is growing at a "healthy pace," easing concerns about an economic recession. His confidence in inflation falling to 2% has strengthened, without mentioning "gradual" rate cuts, leaving room for more significant policy adjustments.

Some analysts suggest that the Fed will assess the upcoming economic data, and if the August non-farm payroll data shows a greater weakness in the labor market than previously expected, it should stimulate the Fed to cut rates faster and by a larger magnitude. Fed officials are also dovish, with FOMC voter and Atlanta Fed President Bostic stating that there may now be a preference for cutting rates more than once this year. Philadelphia Fed President Harker stated that it is time to start cutting rates, and this process should be "orderly."

Expectations for rate cuts are heating up, with the CME FedWatch Tool showing the probability of a 50 basis point rate cut in September rising from 24% on Thursday to 36.5%. Derivatives traders currently expect rate cuts this year to exceed 100 basis points, meaning that by December, there will be rate cuts at every remaining FOMC policy meeting, including a significant 50 basis point cut.

After Powell's speech was released, risk appetite increased, with the U.S. stock market opening high and rising, the U.S. dollar index plunging significantly, and U.S. bond yields falling across the board, with the 2-year U.S. bond yield falling more than 10 basis points intraday. The commodity market was also boosted, with gold prices hitting a daily high and oil prices rising in sync.

The European Central Bank also shows a tendency to cut rates, with Bank of Finland Governor Rehn supporting a rate cut in September. Economists predict that Eurozone inflation is expected to fall to 2.2% in August, providing support for further rate cuts. In addition, U.S. new home sales in July hit a year-long high.

Expectations for rate cuts in 2024 have risen to 104 basis points, and by the end of 2025, it will be 213 basis points.

Small-cap stocks rose by 3.19%, leading the gains, with the Dow rising nearly 500 points at one point, breaking through 41,000 points, the S&P approaching its historical high, the Nasdaq rising by 1.8%, chip stocks up by 2.8%, and Tesla and Nvidia both rising by over 4.5%:

• U.S. stock indices rose across the board and closed near daily highs: The S&P 500 rose by 1.15% to 5634.61 points, up 1.45% for the week. The Dow, closely related to the economic cycle, rose by 1.14% or 462.3 points to 41,175.08 points, up 1.27% for the week. The tech-heavy Nasdaq rose by 1.47% to 17,877.79 points, up 1.38% for the week. The Nasdaq 100 rose by 1.18%. The Nasdaq Technology Market Cap Weighted Index (NDXTMC), which measures the performance of Nasdaq 100 tech sector stocks, rose by 1.37%. The Russell 2000 index, more sensitive to the economic cycle, rose by 3.19%, up 3.54% for the week. The VIX fear index fell by 9.63% to 15.86

• Throughout the week, the Dow rose nearly 1.3%, the S&P 500 rose 1.5%, the Nasdaq rose 1.4%, small-cap indices rose 3.6%, and chip stocks rose 1.1%.
• As Powell "shifts," U.S. bank stocks rose across the board, with regional bank indices performing well, marking the largest intraday gain in eight months. The SPDR S&P Regional Banking ETF (KRE) rose 6.4% before closing up 5.1%, with a weekly gain of over 5%.
• U.S. industry ETFs closed higher across the board. Regional bank ETFs rose over 5%, banking industry ETFs rose over 4%, global aviation industry ETFs rose over 3%, semiconductor ETFs and consumer discretionary ETFs each rose around 2%, and global technology stock ETFs, technology industry ETFs, energy industry ETFs, internet stock index ETFs, and biotechnology index ETFs all rose by over 1%.
• All 11 sectors of the S&P 500 index closed higher, with the real estate sector up 2%, consumer discretionary sector up 1.7%, information technology/tech sector up 1.66%, energy sector up 1.48%, and telecom sector up 0.5%, ranking third from the bottom. Throughout the week, the interest rate-sensitive real estate sector led the gains.
• The "Tech Seven Sisters" saw only Meta decline. Tesla rose 4.59%, with a weekly cumulative increase of 1.94%, continuing the 8.06% rebound from last week; Nvidia rose 4.55%, with a weekly gain of 3.84%, continuing the 18.93% increase from last week; Google Class A rose 1.11%, with a weekly gain of 1.63%; Apple rose 1.03%, with a weekly gain of 0.35%, continuing the 4.66% increase from last week. Amazon rose 0.52%, with a weekly cumulative decline of 0.01%, rebounding 6.06% last week; Microsoft rose 0.3%, with a weekly cumulative decline of 0.4%; while Meta fell 0.74%, with a weekly cumulative increase of 0.11%, previously rising 4.82%, 6.07%, and 1.86% in the past three weeks.
• Apple plans to hold its autumn new product launch event on September 10, unveiling new iPhones, AirPods, and Watches. Meta has canceled its plan to launch high-end mixed reality headsets in 2027.
• Chip stocks collectively rose. The Philadelphia Semiconductor Index rose 2.79%; the industry ETF SOXX rose 2.68%; the Nvidia double long ETF rose 8.7%. Applied Materials rose 4.08%, Qualcomm rose 2.66%, KLA rose 2.42%, Arm Holdings rose 4.56%, Intel rose 2.19%. AMD rose 2.16%, with a weekly gain of 4.32%. Applied Materials rose 1.23% Broadcom rose 2.48%. TSMC ADR rose 2.91%, with a cumulative decline of 1.87% this week. Meanwhile, ASML ADR fell by 0.05%, and Micron Technology fell by 1.35%.

• AI concept stocks generally rose. Snowflake rose by 0.56%, BigBear.ai rose by 6.17%, SoundHound AI, an AI voice company held by NVIDIA, rose by 2.03%, Dell Technologies rose by 2.78%, CrowdStrike rose by 1.46%, C3.ai rose by 1.74%, "AI demon stock" AMD rose by 1.39%, Oracle rose by 0.8%, Serve Robotics rose by 0.94%, while Palantir fell by 0.44%, and BullFrog AI fell by 5.19%.

• Chinese concept stocks showed mixed performance. The Nasdaq Golden Dragon China Index rose by 0.28%, with a weekly decline of 1.5%. In ETFs, the China Technology Index ETF (CQQQ) rose by 1.37%. The Chinese Internet Index ETF (KWEB) rose by 0.88%.

• Among popular Chinese concept stocks, Alibaba's total market value exceeded Pinduoduo. Bilibili rose by 15.28%, Canadian Solar rose by over 9.8%, EHang Holdings rose by approximately 5.4%, JinkoSolar rose by over 4.8%, Alibaba rose by over 2.9%, RDY Medicine rose by approximately 2.7%, Wanguo Data rose by approximately 2.4%, Nio and DouYu rose by over 2.2%, Beike rose by approximately 1.5%, XPeng rose by over 1.4%, Vipshop rose by over 1.3%, Daqo New Energy, JD.com, Yado, TAL Education, Boss Zhipin rose by up to 0.8%, Tencent Music, Baidu, Huazhu, Autohome, NetEase, Li Auto, Qutoutiao, Shengda Technology, Ctrip fell by up to 0.99%, Miniso, Yum China, ZTO Express fell by over 1.9%, New Oriental fell by approximately 2.2%, iQIYI, Baijiayun, Allmed Medical fell by at least 10%.

• Weight loss drug concept stocks generally rose, with Ventyx Biosciences rising by 14.72%, "affordable weight loss drug" supplier Hims, SD Bio ADR, and Arena Pharmaceuticals rising by at least 1.6%, Novo Nordisk ADR rising by less than 0.1%, and Eli Lilly falling by over 0.1% from its all-time high, with a weekly increase of 3.32%, following increases of 10.85% and 3.56% in the previous two weeks.

• Among stocks with significant fluctuations, Jiabao Insurance fell by 92.63%. As of Thursday's close, the stock has risen over 500% since its listing in March. Sequans Communications rose by 111.71%, with its 4G IoT technology acquired by Qualcomm. WOK Medical Technology Group's U.S. IPO opened below the IPO price, dropping by 64% to $3.60 on the first day, compared to the previously announced IPO price of $10.00 per share.

Powell boosts market expectations of Fed rate cuts, European stocks rebound for the third consecutive day, with a weekly increase of 1.3%, marking the longest streak of weekly gains since the end of March : "Powell Pivot Day" U.S. Treasury yields plummeted. Short-term U.S. Treasury yields saw significant declines, with both 2-year and 10-year yields falling by over 10 basis points and 6 basis points respectively after Powell's speech. Eurozone bond yields followed suit with significant declines:

• U.S. Bonds: By the closing bell, the more sensitive 2-year U.S. Treasury yield dropped by 9.46 basis points to 3.9090%, falling nearly 11 basis points at one point and breaking below the 3.90% mark. This week, it fell by 13.86 basis points, dropping below the 4% threshold. The U.S. 10-year benchmark Treasury yield fell by 5.50 basis points to 3.7971%, accumulating an 8.55 basis point decline this week, almost erasing all gains since August 5th.
• Eurozone Bonds: The 10-year German bund yield, a Eurozone benchmark, fell by 2.0 basis points, with a weekly decline of 2.2 basis points, showing a V-shaped trend overall. The 2-year German bund yield fell by 2.4 basis points, with a weekly decline of 5.9 basis points. The French 10-year bond yield fell by 2.6 basis points, with a weekly decline of 4.8 basis points. The Italian 10-year bond yield fell by 5.0 basis points, with a weekly decline of 6.5 basis points. The Spanish 10-year bond yield fell by 3.5 basis points, with a weekly decline of 7.0 basis points. The Greek 10-year bond yield fell by 4.5 basis points, with a weekly decline of 6.0 basis points. The 2-year UK bond yield fell by 4.4 basis points, with a weekly decline of 0.4 basis points. The UK 10-year bond yield fell by 4.8 basis points, with a weekly decline of 1.4 basis points.

U.S. Treasury yields saw a significant decline, with short-term bond yields leading the way (2-year yields down 10 bps on Friday, 14 bps for the week, 30-year yields down 2 bps on Friday) The US Dollar Index fell by more than 0.8%, hitting a 13-month low, while non-US currencies strengthened on "Powell Pivot Day". The British pound reached its highest level in nearly two and a half years, the Japanese yen rose by over 1% to approach 144, and offshore RMB surged by 305 points:

• US Dollar: The DXY, which measures against a basket of six major currencies, fell by 0.82% to 100.678 points. After the release of Fed Chairman Powell's speech at 22:00 Beijing time, it significantly plunged, dropping to 100.602 points at one point, falling below the bottom of 100.617 points on December 28, 2023, and approaching the bottom of 99.578 points on July 14, 2023. It fell by 1.74% this week, showing an overall volatile downward trend.
• The Bloomberg Dollar Index fell by 0.97% to 1223.14 points. At 02:16, it dropped to 1222.53 points, approaching the bottom of 1206.93 points on December 28, 2023. It fell by 1.24% this week, with the overall decline significantly expanding after Powell's speech.

The US Dollar falls to a yearly low

• Non-US currencies rose across the board: The Euro against the US Dollar rose by 0.75% to 1.1193, with a weekly increase of 1.54%; the British Pound against the US Dollar rose by 0.95% to 1.3216, reaching the highest level since March 2022, with a weekly increase of 2.10%; the US Dollar against the Swiss Franc fell by 0.54% to 0.8477, with a weekly decline of 2.18%; among commodity currencies, the Australian Dollar against the US Dollar rose by 1.37% to 0.6797, with a weekly increase of 1.90%; the New Zealand Dollar against the US Dollar rose by 1.61% to 0.6236, with a weekly increase of 3.01%; the US Dollar against the Canadian Dollar fell by 0.79% to 1.3510, with a weekly decline of 1.24%.
• Analysts believe that the relative resilience of UK PMI data indicates a very low possibility of consecutive rate cuts. In the coming weeks, the British Pound still has room for further support. The British Pound is currently the preferred currency for expressing a bearish view on the US Dollar.
• Japanese Yen: The Japanese Yen against the US Dollar rose by 1.31% to 144.37 yen. At 03:36, it hit a high of 144.05 yen, with a weekly increase of 2.21%. The Japanese Yen against the Euro rose by 0.57% to 161.60 yen, with a weekly increase of 0.74%; the Japanese Yen against the British Pound rose by 0.35% to 190.786 yen, with a weekly increase of 0.15%.
• On the news front, Bank of Japan Governor Haruhiko Kuroda spoke for the first time after "Black Monday," stating that the BOJ does not intend to hastily raise interest rates, but will continue to adjust monetary policy if the economic outlook meets expectations. Analysts believe that Kuroda's remarks maintain a neutral and cautious stance to avoid disturbing the market. Japanese Finance Minister Toshimitsu Motegi stated that there will be conditional foreign exchange interventions in response to sudden exchange rate fluctuations
• Offshore Renminbi: The offshore Renminbi (CNH) rose by 305 basis points against the US dollar at the close, reaching 7.1162 yuan. It traded within a range of 7.1488-7.1132 yuan during the day, with a cumulative increase of approximately 470 basis points this week.
• Most Cryptocurrencies Rise: The largest cryptocurrency leader Bitcoin rose by 5.91% at the close, reaching $63,915.00. Powell's speech broke the market silence, leading to a rapid expansion in gains. It has risen by 6.54% this week, showing overall upward volatility. Spot Bitcoin has risen by over 8.5% in the past seven natural days (since the end of trading last Friday), surpassing $64,300, with significant gains overall after Powell's speech. The second-largest Ethereum rose by 5.50% at the close, reaching $2,760.50, with a weekly increase of 4.74%.

Bitcoin has been soaring all the way, approaching $64,000.

Rate cuts can stimulate economic growth and benefit oil demand. US oil and Brent oil rebounded for the second consecutive day on Friday, rising by over 2.3%, but both fell this week. Progress in the previous ceasefire agreement helped alleviate supply concerns and the slowdown in oil demand prospects. European natural gas futures fell by over 7% this week:

• US Oil: WTI October crude oil futures closed up $1.82, a 2.49% increase, at $74.83 per barrel. It fell by 2.37% this week. US stocks rose by over 2.8% to $75.06 per barrel after midday, hitting a new intraday high since August 19.
• Brent Oil: Brent October crude oil futures closed up $1.80, a 2.33% increase, at $79.02 per barrel. It fell by 0.83% this week. US stocks rose by nearly 2.7% to $79.27 per barrel after midday.
• Wall Street Bank Views: ING analysts pointed out that OPEC+ still has concerns about the recent weakness in the oil market and may have to abandon plans to increase crude oil supply starting in October, depending on the trading situation at the end of September. Morgan Stanley stated on Friday that the decline in oil inventories supported oil prices. Oil inventories have decreased by about 1.2 million barrels per day over the past four weeks, and this trend is expected to continue in the third quarter. Some analysts believe that the previous decline has brought the oil market close to oversold territory. The US CFTC stated that bullish sentiment for WTI crude oil hit an eleven-week low.
• Natural Gas: US September natural gas futures fell by nearly 1.51%, reaching $2.0220 per million British thermal units. It fell by 4.76% this week. The European benchmark TTF Dutch natural gas futures fell by 0.34%, reaching 36.700 euros per megawatt-hour, with a weekly decline of 7.15%, showing overall downward volatility. ICE UK natural gas futures rose by 0.55%, reaching 88.000 pence per kilocalorie, with a weekly decline of 7.64%, showing an overall downward trend Oil prices have also risen significantly, further rebounding from the low point in early August.

The weakening of the US dollar and US bond yields supported the rise of precious metals. Spot gold rose nearly 1.4% during the day, while silver rose more than 3.1%. London industrial base metals collectively rose, with copper closing up 1.73% and zinc posting its best weekly gain since April:

• Gold: COMEX December gold futures rose 1.20% at the close, to $2546.80 per ounce, with a weekly gain of 0.39%. After Powell's speech was released, spot gold rose nearly 1.4%, hitting a daily high of $2518.36 per ounce, approaching the historical high of $2531.75 set on August 20, with a weekly gain of 2.27%.
• Silver: COMEX September silver futures rose 2.78% at the close, to $29.855 per ounce, with a weekly gain of 3.50%. After Powell's speech was released, spot silver rose in the short term, with US stocks hitting a daily high of over 3.1% and approaching the $30 mark, ultimately closing up 2.86% at $29.8157 per ounce, with a weekly gain of 2.89%.
• Analysis points out that Powell's dovish signal has triggered another surge in gold prices, and it is expected that gold will continue to rise before the September Fed meeting. Driven by rate cut expectations, gold is expected to climb to the $2550 to $2600 range. US CFTC data shows that bullish sentiment for gold has reached a four-year high.
• London industrial base metals collectively rose. Dr. Copper, a barometer of the economy, closed up 1.73% at $9288 per ton, with a weekly gain of over 1.88%. Lead rose by about 3.12%, with a weekly gain of about 3.98%. Zinc rose by over 1.84%, with a weekly gain of over 3.16%. Aluminum rose by 2.50%, with a weekly gain of about 7.44%. Zinc rose by about 1.89%, with a weekly gain of 5.43%. Nickel rose by over 0.93%, with a weekly gain of 2.35%. Cobalt remained flat, with a weekly decline of about 2.41%.

[Content updated before 23:00 on August 23rd]

On Friday, August 23rd, at the Jackson Hole Global Central Bank Annual Meeting, Federal Reserve Chairman Powell "turned dovish," stating that it is time to adjust policies and that he does not seek or welcome further cooling of the job market. He expressed confidence that inflation will fall to 2%, confirming market expectations for a "dovish" speech from Powell.

Analysts believe that Federal Reserve Chairman Powell's policy shift is complete. In his speech, Powell showed a comprehensive dovish stance, whereas two years ago during the same period, he stated that the Fed would accept an economic downturn as the cost of restoring inflation After the release of Powell's speech, the expectation of a rate cut has significantly increased, boosting risk appetite and pushing up the stock market. The US stock market opened higher and accelerated its rise, while the US dollar index plummeted, and US bond yields fell across the board, driving up commodity prices. Spot gold hit a new high, and oil prices also rose.

US Stocks Accelerate Rise After Opening High:

• The tech-heavy Nasdaq opened 153.37 points higher, up 0.87%, with the gain expanding to over 1.8% at one point; the S&P 500 opened 31.85 points higher, up 0.57%, with the gain expanding to over 1.2% at one point; the Dow Jones, closely related to the economic cycle, opened 166.34 points higher, up 0.41%, with the gain expanding to over 1%; the Russell 2000 small-cap index rose over 2.7% at one point.

• In the early trading of US stocks, most industry ETFs rose, with regional bank ETFs, semiconductor ETFs, and global technology stock index ETFs all up over 1%.
• "Big Tech Seven" collectively rose. NVIDIA's gain expanded by over 4.6%, Tesla rose over 5% at one point, Apple rose over 1.6% at one point, Amazon rose over 1.5% at one point, "metaverse" Meta rose over 1.4% before halving its gain, Google A rose over 1.3% at one point, and Microsoft rose over 0.8% at one point before giving back most of the gain.

• Chip stocks accelerated their rise. The Philadelphia Semiconductor Index rose over 3.5% at one point. Qualcomm rose over 3.1%, Broadcom rose over 3.6%, Intel rose over 3.9%, TSMC ADR rose over 4%, while Micron Technology fell over 2.4% at one point, now halving its decline.
• Most AI concept stocks rose. BullFrog AI fell over 2.9% at one point, Oracle fell over 0.3%, while SoundHound AI, an AI voice company held by NVIDIA, rose over 3.6%, and "AI demon stock" AMD rose over 3.3% before giving back most of the gain.
• Chinese concept stocks mostly rose. The Nasdaq Golden Dragon China Index rose over 0.7% at one point. Among popular Chinese concept stocks, Bilibili rose over 14% at one point, Alibaba rose over 3.3%, while Pinduoduo fell over 6.1% at one point.
• It is worth noting that Alibaba's total market value exceeds that of Pinduoduo.
• After Powell's speech was released, the US dollar index plummeted, benefiting G10 currencies. The ICE US Dollar Index plunged from above 101.50 to below 100.90, with an overall intraday decline of over 0.6%, approaching the December 28, 2023 low, and the Bloomberg Dollar Index fell by about 0.8%. Non-US currencies rose, with the yen against the dollar rising over 0.7% to break 145. The pound against the dollar rose over 0.6% to 1.32, hitting a new high since March 2022

• Bull market intensifies in US Treasuries, yields across the board plummet. After Powell's speech, the yield on the 10-year US Treasury bond plunged from 3.8350% to nearly 3.8%, with an overall intraday decline of over 5 basis points. The 2-year US Treasury yield dropped from above the 4% integer mark to below 3.9450%, with an intraday decline of about 6 basis points.
• USD and US Treasury yields weakening together boost commodity prices, gold prices rise in the short term. Spot gold rose by over 1.2%, hitting a daily high of $2515.55 per ounce, rising over $15 after Powell's speech. Silver approached the $30 mark. Oil prices also rose, with US oil briefly rising by over 2%.

【Updates before 21:50】

The Jackson Hole Global Central Bank Annual Meeting has opened, with several Federal Reserve officials supporting a rate cut in September. Powell will deliver a major speech today.

Awaiting Powell's signal on rate cuts, pre-market US stocks saw futures of the three major indices rise, with Chinese concept stocks generally up, Bilibili up nearly 6%, and chip stocks rising.

US stock indices collectively opened higher, Bilibili up 9%, NVIDIA up 2%.

European stocks opened slightly higher, with the German DAX index up 0.24%.

Most Asia-Pacific stock indices closed higher, with the Nikkei 225 index up 0.4% and the Vietnam VN index up 0.2%.

US Treasury yields edged lower, with Atlanta Fed President Bostic stating that the Fed is "close" to cutting rates.

Spot gold rose by 0.66% intraday, once again surpassing $2500.

Oil prices rose, with WTI crude oil briefly up by 2%.

【Updates before 21:30】

US stocks opened slightly higher, with the Nasdaq up 0.9%, the Dow up 0.4%, and the S&P 500 up 0.6%.

Semiconductor stocks and Chinese concept stocks rose, with Bilibili up about 9%, NVIDIA up about 2%, and JD.com up about 1%.

Some smallpox concept stocks rose, with GeoVax Labs up about 5%.

AIA Insurance fell by about 83%, closing on Thursday with a rise of over 500% since its listing in March.

Sequans Communications rose by over 210%, with its 4G IoT technology acquired by Qualcomm.

【Updates before 20:50】

US Treasury yields edged lower, with Atlanta Fed President Bostic previously stating that the Fed is "close" to cutting rates

Digital service provider Youjia Insurance plummeted 89% in pre-market trading, continuing the previous day's decline. The stock surged 396% in the 11 trading days leading up to Wednesday and hit a historical high. By Thursday's close, the stock had risen 538% since its listing in March.

WTI crude oil rose by 2% intraday, now trading at $74.25 per barrel; Brent crude oil is up 1.3% intraday, trading at $77.25 per barrel.

Spot gold rose by 0.66% intraday, once again surpassing $2500.

[Update at 16:10]

US stock index futures are up, with Nasdaq index futures rising by 0.6%.

Most semiconductor stocks are up, with Nvidia up over 1% and TSMC up 1.5%.

Chinese concept stocks are generally up, with Bilibili up nearly 6%, Alibaba up over 2%, and JD.com up nearly 2%. NetEase saw little pre-market volatility, with US stocks falling 11% after the release of the second-quarter report overnight.

Major European stock indices opened slightly higher, with the Euro Stoxx 50 index up 0.14%, the German DAX index up 0.24%, the UK FTSE 100 index up 0.27%, and the French CAC 40 index up 0.13%. Currently, European stocks maintain their opening gains.

Most Asia-Pacific stock indices closed higher, with the Nikkei 225 Index up 0.4% at the close, at 38,364.27 points. The Vietnam VN Index closed up 0.2% at 1,285.32 points. The KOSPI Index in Seoul, South Korea, closed down 0.2%.

Major commodities rose, with spot gold holding near $2,500. UBS expects that as the Fed begins to cut interest rates, the holding cost of gold will decrease, leading to further inflows into gold ETFs.

According to the event calendar, at 22:00 Beijing time today, Fed Chair Powell will speak on the economic outlook at the Jackson Hole Symposium, and US July new home sales data will be released. At 23:00, Bank of England Governor Bailey will speak at the Jackson Hole Symposium, and Philadelphia Fed President Patrick Harker will be interviewed by Bloomberg. At 00:30 the next day, Chicago Fed President Goolsbee will speak on CNBC