Stagflation threat and the Fed's hawkish stance suppress US stocks, Nasdaq falls back, Dow continues its eighth consecutive rise, ZEEKR makes a strong debut with a 35% surge, gold surges throughout the week

Recent data has sounded the alarm for stagflation: The University of Michigan in the United States announced that the preliminary consumer confidence index for May unexpectedly plummeted to 67.4, hitting a new low in half a year and the largest month-on-month decline in nearly three years; consumers' one-year inflation expectations unexpectedly did not stabilize in April, but instead rose by 0.3 percentage points to 3.5% compared to April, hitting a new high in half a year; five-year inflation expectations also did not remain stable in April, rising by 0.1 percentage points to 3.1% compared to the previous month.

The preliminary consumer confidence index for May from the University of Michigan in the United States hit the largest month-on-month decline since August 2021

At a time when consumer sentiment, often seen as a barometer of the U.S. economy, is being hit by high inflation stickiness, Federal Reserve officials are turning "hawkish" again. Fed Governor Bowman stated that she believes it is not appropriate for the Fed to cut interest rates this year, citing disappointing inflation data in the first few months of the year, and she needs more time to be confident that inflation will fall to the target; Dallas Fed President Kaplan stated that considering the lackluster inflation data in the first few months of the year, it is too early to consider cutting interest rates now.

After the release of consumer confidence and inflation expectations, U.S. Treasury prices fell, yields rose during the session, and the U.S. dollar index jumped. Following Bowman's speech, U.S. bond yields hit daily highs, with the benchmark 10-year Treasury yield no longer near the recent low set on Tuesday, and the yield on the two-year Treasury, sensitive to interest rates, erased its decline for the week and rose to a high within the week.

Expectations of the number of Fed rate cuts reflected in swap contract pricing fell from 1.77 times to 1.63 times during Friday's session, and Nasdaq futures fell in sync

The threat of stagflation suppressed the major U.S. stock indexes. Just as the Nasdaq halted its two-day decline on Thursday, it returned to a downward trend, the S&P fluctuated short-term during the session, and the Dow gave up most of its early gains, struggling to maintain its upward momentum of more than a week. Most tech giants fell, with Tesla leading the decline. Media reports indicated that the U.S. will impose new tariffs on industries such as electric vehicles and solar equipment, causing a decline in new energy vehicle stocks, while the debut of ZEEKR, the largest Chinese concept IPO in nearly three years, was stunning, rising by nearly 40% at one point. Chip stocks, which fell against the market on Thursday, rebounded overall, with Taiwan Semiconductor's U.S. stock rising by over 5% during the session after a nearly 60% year-on-year increase in sales in April, and Nvidia reversing its three-day decline After the announcement of US consumer confidence and inflation expectations, major US stock indexes may give back most of their gains or turn lower in early trading.

Meanwhile, the minutes of the European Central Bank meeting showed that central bank officials favored a rate cut in June. As a result, European stock indexes continued their upward trend for a week, with German and British stocks hitting record highs for several consecutive days. This week, several leading European stocks such as Infineon and UBS surged after announcing their financial reports, supporting a strong performance for European stock indexes in the past three months. The German stock index, where Infineon is listed, led the gains among various countries.

In the commodity market, after the announcement of US consumer inflation expectations, gold, which rose more than 1% intraday, gave back at least half of its gains but ultimately closed higher for two days, marking the largest weekly gain since early April when geopolitical risks increased. This was mainly due to Israel's decision to attack Gaza and favorable US unemployment data that supported rate cut prospects. After the release of US data, international crude oil, which hit a new high for over a week intraday, accelerated its decline, dropping more than 2% from the high of the day and moving away from the high point set in the past month after two consecutive days of gains.

Due to the weekly decline, Brent crude oil failed to reverse the sharp decline from the previous week, while US crude oil rebounded slightly. The market is focusing on the prospect of a ceasefire between Israel and Palestine. On Friday, CCTV cited media reports stating that the current ceasefire negotiations ended without progress on the Israeli side, but new talks may be held. The Hamas delegation leader stated that Hamas did not freeze or withdraw from the ceasefire negotiation process. The oil market is also monitoring US supply and demand signals. On Wednesday, when the US EIA crude oil inventories fell more than expected, oil prices surged, with US crude oil rising more than 3% intraday from the low of the day.

S&P Indexes Turn Lower Multiple Times in the Short Term, Dow Hits Largest Weekly Gain in Nearly Five Months, Nvidia Rebounds, TSMC Rises, Novavax Doubles, ZEEKR Surges Nearly 40%

The three major US stock indexes opened higher together but had mixed performances later on. The Nasdaq Composite Index, which rose nearly 0.6% in early trading, turned lower less than an hour after the opening, with a drop of over 0.3% in early trading. The Dow Jones Industrial Average initially rose over 190 points, nearly 0.5%, but later gave back more than half of the gains. By midday, the gains expanded to over 100 points. The S&P 500 Index, which rose nearly 0.5% in early trading, turned lower multiple times in the short term, with drops of less than 0.1%. In the end, only the Nasdaq closed lower.

The Nasdaq closed down 0.03% at 16,340.87 points, failing to continue the rebound from Thursday and still below the closing high since April 11 set on Monday. The S&P closed up 0.16% at 5,222.68 points, rising for two consecutive days and hitting a closing high since April 1 along with the Dow. The Dow closed up 125.08 points, a gain of 0.32%, at 39,512.84 points, rising for eight consecutive trading days and marking the longest streak since December 19, 2023 The small-cap stock index Russell 2000, which is mainly composed of value stocks, closed down 0.67%, underperforming the broader market, after rebounding on Thursday from the high since April 9 and then falling back. The tech-heavy Nasdaq 100 index closed up 0.26%, rising for two consecutive days and hitting a new closing high since April 11 for two days. The Nasdaq Technology Market Cap Weighted Index (NDXTMC), which measures the performance of tech stocks in the Nasdaq 100 index, closed up 0.38% after three consecutive days of decline, approaching the high since April 11 set on Monday, with a weekly gain of 1.55%.

The three major U.S. stock indexes only saw the Nasdaq closing down on Friday, with small-cap stocks underperforming the broader market.

Major U.S. stock indexes continued to rise this week. The S&P rose 1.85%, the Nasdaq rose 1.14%, the Nasdaq 100 rose 1.51%, and the Russell 2000 rose 1.18%, all rising for three consecutive weeks. The Dow rose 2.16%, marking the largest weekly gain since the week of December 15, 2023, rising for four consecutive weeks.

Among the Dow components, McDonald's led the gains with a 2.6% increase, while 3M, upgraded from hold to buy by HSBC, rose 1.6%, Procter & Gamble rose nearly 0.5% to a new closing high, Nike fell 2.6%, Boeing fell 1.5% after a 9.5% drop following the earnings report on Tuesday, and Disney, which closed almost flat, fell 6.9% this week.

In the S&P 500 sectors, six sectors rose on Friday, with consumer staples rising by over 0.6%, IT, including chip stocks like Nvidia, rising nearly 0.5%. Among the five sectors that fell, non-essential consumer goods, including Tesla, fell by over 0.6%, leading the declines, energy fell by nearly 0.6% dragged down by the decline in oil prices, rate-sensitive real estate fell by 0.4%, and communication services, including Google and Meta, fell by nearly 0.2%.

All sectors rose this week, with all sectors except non-essential consumer goods, which rose by nearly 0.2%, rising by at least 1%. Utilities led the gains with an increase of about 4%, financials rose by over 3%, materials, industrials, consumer staples all rose by over 2%, and communication services and healthcare rose by about 2%.

The sector where Tesla is located in the S&P 500 saw the largest decline on Friday, followed closely by energy, while the sector where chip stocks are located led the gains.

Tech giants including Microsoft, Apple, Nvidia, Google parent Alphabet, Amazon, Facebook parent Meta, and Tesla, known as the "Big Seven Sisters," had mixed performances. Tesla, which saw the largest decline, turned downward at the opening bell, falling by nearly 2.5% at midday and closing down by about 2%, falling for four consecutive days and hitting a closing low since April 26, with a weekly decline of about 7% In the FAANMG six major technology stocks, Apple, which rose for three consecutive days, turned down in early trading. It fell more than 1% in early trading, closing down 0.7%, failing to continue to approach the closing high since February 22 announced last Friday; Alphabet, which rebounded on Thursday, fell more than 1% in early trading, closing down nearly 0.8%, falling from the high since April 26 when it rose for five consecutive days on Tuesday; Amazon, which rebounded to a historical closing high on Thursday, turned up in early trading, closing down nearly 1.1%; Netflix, which rose for seven consecutive days to the high since April 17 on Thursday, rose more than 1.9% in early trading, turned down in early trading, closing down 0.2%; while Microsoft rose more than 0.7% in early trading, giving back more than half of the gains in early trading, closing up 0.6%, rising for three consecutive days, refreshing the closing high since April 12; Meta turned down in early trading after rising, falling more than 1% at one point, closing up nearly 0.2%, rising for eight consecutive days, refreshing the high since April 24.

Most of these six technology stocks rose this week, with Meta and Netflix up about 5.4%, Microsoft up about 2%, Alphabet up nearly 0.8%, Amazon up nearly 0.7%, while Apple, which surged more than 8% last week after its earnings report, fell by nearly 0.2%.

Chip stocks rebounded overall. The Philadelphia Semiconductor Index and the Semiconductor Industry ETF SOXX rose nearly 2.1% and nearly 2% respectively in early trading, then retreated slightly, closing up about 1%, rebounding after falling on Thursday, approaching the high since April 11 refreshed on Monday, up nearly 2% and 1.9% respectively this week. Among chip stocks, Nvidia, which fell for three consecutive days to the low since May 2, rose 3% in early trading on Thursday, closing up nearly 1.3%, up more than 1.2% this week; TSMC's US stock rose about 5.4% in early trading, closing up 4.5%; at the close, Micron Technology rose nearly 3%, Broadcom rose over 2%, Qualcomm rose nearly 0.9%, while Intel fell 0.8%.

AI concept stocks saw mixed movements. After announcing a first-quarter loss that exceeded expectations and revenue that surged 73% beyond expectations, with strong growth expected this year, SoundHound.ai (SOUN) rose nearly 25.7% in early trading and closed up 7.2%; at the close, BigBear.ai (BBAI) fell more than 6%, Palantir (PLTR) fell 2.5%, C3.ai (AI) fell nearly 1.9%, Super Micro Computer (SMCI), which rose more than 4% in early trading, fell nearly 0.2%; Adobe (ADBE) fell by less than 0.1%; while Oracle (ORCL) rose by less than 0.1%, and Astera Labs (ALAB), known as "Little Nvidia" and selling data center interconnect chips, saw a slight increase.

The popular Chinese concept stocks that rebounded on Thursday overall fell back. The Nasdaq Golden Dragon China Index (HXC), which reversed three consecutive declines on Thursday, fell. It rose nearly 0.8% in early trading, turned down in early trading, and closed down nearly 0.6% after rising for two consecutive weeks, down 1.9% this week. The Chinese concept ETFs KWEB and CQQQ closed down 0.2% and 0.8% respectively. Most of the new forces in the electric vehicle sector fell, with XPeng Motors falling by about 5.3% at the close, Nio falling nearly 4.9%, Li Auto falling 2.2%, Xiaomi Fans falling nearly 0.5%, and ZEEKR (ZK) opening at $26 on its first day of listing The issuance price at the top end of the guidance range surged by 23.8%, with an intraday increase of nearly 40% and a closing increase of 34.6%. Among other individual stocks, by the closing bell, JinkoSolar fell by over 9%, Daqo New Energy fell by over 5%, Baidu fell by 2%, falling by less than 1%, JD.com fell by 0.5%, Tencent Music Entertainment Group fell by nearly 0.2%, Pinduoduo fell by less than 0.1%, while Alibaba rose by 0.7%, Bilibili rose by 0.4%, and NetEase saw a slight increase.

The banking sector index rose for three consecutive days. The overall banking industry indicator, KBW Bank Index (BKX), closed up nearly 0.2%, hitting a high not seen since March 2023 for three consecutive days, with a weekly gain of 2.7%; the regional banking index, KBW Nasdaq Regional Banking Index (KRX), closed up by less than 0.1%, hitting a high not seen since March 28 for three consecutive days, with a weekly gain of 1.3%, while the regional bank stock ETF SPDR S&P Regional Banking ETF (KRE), which rose for two consecutive days to a high not seen since January 30, closed down by 0.1%, with a weekly gain of 1.4%.

Among the stocks with significant fluctuations, Novavax (NVAX) surged over 120% at the opening due to reaching a $1.2 billion agreement with Sanofi for the development and commercialization of a new coronavirus vaccine, with Sanofi also investing $70 million to acquire less than 5% of its shares, nearly doubling its valuation, with an intraday increase reaching 146% and a closing increase of 98.7%; on the first day of listing of the Special Purpose Acquisition Company (SPAC) AltC Acquisition Corp., Oklo Inc. (OKLO), the first nuclear fusion technology startup supported by OpenAI CEO Altman, closed down by nearly 53.7%.

Among the stocks that released earnings reports, Akamai Technologies (AKAM), a cloud services provider with second-quarter revenue and profit guidance below expectations, closed down by 11%; Unity Software (U), with first-quarter losses higher than expected, closed down by 10.2%; Yelp (YELP), with first-quarter profits higher than expected but second-quarter guidance disappointing, closed down by 7.1%; medical device company Insulet (PODD), with first-quarter revenue and profit higher than expected; while salad chain store Sweetgreen (SG), which raised its full-year revenue and profit guidance, closed up by 34%.

In Europe, the pan-European index rose for six consecutive days. The STOXX 600 index in Europe hit a new closing high for four consecutive days. Major European stock indices rose across the board, with German, French, and British stocks rising for six consecutive days, British and German stocks hitting new closing highs for six and three consecutive trading days respectively, French stocks also reaching new closing highs, Italian stocks rising for two consecutive days, and Spanish stocks rebounding from Thursday's decline.

In various sectors, utilities led the gains by over 1.4%, benefiting from strong renewable energy production driving a 12% year-on-year increase in core profits for the first quarter, with Enel, listed in Italy, rising by 38%, and EDP, Portugal's largest utility company, seeing a 3.9% increase in net profit for the first quarter exceeding expectations; the retail sector rose by 1.4%, with Zalando, whose rating was upgraded from hold to buy by Berenberg, rising by 3.3% among its component stocks; The basic resources sector in the mining stocks rose by over 1.2%, with component stock Anglo American Resources rising by 1.4%. Media reports indicate that after BHP's bid of $39 billion for acquisition, Rio Tinto is considering bidding for Anglo American Resources. Following the vaccine licensing agreement with Novavax, French-listed Sanofi rose by 1.2%, supporting the healthcare sector to rise by over 0.7%.

The STOXX 600 index has accumulated a rise of about 3% this week, rebounding after a fall last week, marking the largest weekly gain since January 26th, surpassing the previous five weeks of gains. Stock indices in various countries have all risen, with the DAX rising by over 4% leading the way. Stocks in France, Italy, and Spain have all rebounded after falling last week, while UK stocks, which stood out last week, have risen for three consecutive weeks.

In various sectors, utilities led the way this week with an accumulation of nearly 4.7%, followed by a 4.2% rise in the technology sector. Among the component stocks, Infineon, which rose by nearly 13% after announcing its financial report on Tuesday, has accumulated a rise of slightly over 20%. On the other hand, the real estate sector, which performed the best last week with a rise of over 4%, has fallen by over 3%.

After remarks from Federal Reserve officials, U.S. bond yields accelerate, with the 2-year yield hitting a one-week high

The yield on the 10-year benchmark U.S. Treasury bond initially fell below 4.45% in early European trading, approaching the low of around 4.42% set on Tuesday, the lowest since April 10th. It then continued to rise, accelerating after the release of U.S. consumer inflation expectations, briefly rising above 4.50%. Following remarks from Federal Reserve officials, it briefly rose to around 4.51%, up over 5 basis points intraday, settling around 4.50% by the end of the bond market session, up approximately 5 basis points intraday. It fell by about 1 basis point for the week, declining for the second consecutive week after rising for four consecutive weeks.

The 10-year U.S. bond yield briefly rose above 4.50% during Friday's session

The 2-year U.S. Treasury bond yield, which is more sensitive to interest rate prospects, briefly fell below 4.81% in early European trading, rose above 4.87% during midday trading in the U.S., hitting the high since the release of the non-farm payroll report on May 3rd, erasing the decline within the week, settling around 4.87% by the end of the bond market session, up over 5 basis points intraday. Yields on other maturity U.S. bonds also rebounded after falling on Thursday. The 2-year yield has accumulated a rise of about 5 basis points this week, rebounding after a significant drop of around 17 basis points last week.

Following the release of U.S. consumer confidence and inflation data, yields on various maturity U.S. bonds rose simultaneously during intraday trading After the release of inflation expectations, the US dollar index jumped during the trading session, while Bitcoin fell by over $3,000.

Tracking the ICE US Dollar Index (DXY), which measures the exchange rate of the US dollar against a basket of six major currencies, the index fluctuated downward multiple times before the US stock market opened. At the beginning of the stock market session, it fell below 105.15 to set a new daily low, with a decrease of less than 0.1% during the day. After the announcement of US consumer inflation expectations, it quickly rebounded and maintained an upward trend. The US stock market reached a high of 105.40 in the morning session, rising nearly 0.2% during the day, still far from the low point reached on April 10th when the US CPI for March was announced, which was close to 104.50.

By the time the US stock market closed on Friday, the US dollar index was around 105.30, with an increase of less than 0.1% during the day and a cumulative increase of nearly 0.3% for the week. The Bloomberg Dollar Spot Index, which tracks the US dollar against other ten currencies, rose by less than 0.1% during the day, not approaching the low point reached on April 11th since last Friday. It increased by 0.2% for the week, rebounding after a three-day decline for both the US dollar index and the Bloomberg Dollar Spot Index.

Among non-US currencies, the Japanese yen fell back on Thursday after a rebound during the trading session, with the US dollar against the Japanese yen rising to 155.90 in the morning session, close to the high of May 1st near 156.00. The euro against the US dollar rose above 1.0790 in the early US stock market session to set a new daily high, but fell after the announcement of US inflation expectations. The pound against the US dollar rose above 1.2540 before the European stock market session, but fell after the announcement of US inflation expectations. By the time the US stock market closed, it was above 1.2520, with an increase of less than 0.1% during the day.

In the Asian market session, the offshore Chinese yuan (CNH) rose to a daily high of 7.2202 against the US dollar, but quickly fell and continued to decline. During the US stock market session, it fell to 7.2347, setting a new low since May 2nd after breaking below 7.23 on Thursday. By 4:59 AM on May 11th Beijing time, the offshore Chinese yuan against the US dollar was at 7.2341, down 118 points from the New York closing on Thursday. After a three-day decline was halted on Thursday, it fell back this week after rebounding last week, with a cumulative decline of 413 points this week, marking the third consecutive week of decline in the past seven weeks.

Bitcoin (BTC) rose above $63,400 before the US stock market opened, with some platforms exceeding $63,600. However, the US stock market accelerated its decline in the morning session, falling below $60,300 at noon, setting a new low since last Friday, May 3rd. It dropped by over $3,000 from the daily high, a decrease of over 5%. By the time the US stock market closed, it was hovering around $61,000, with a nearly 3% drop in the past 24 hours and a drop of over 2% in the past seven days After the announcement of US consumer confidence and inflation expectations, the US dollar index quickly turned higher, while cryptocurrencies such as Bitcoin accelerated their decline.

Crude oil fell more than 2% from the intra-day high, US oil rebounded throughout the week

International crude oil futures fell during the session, with European stocks hitting their highest level since May 1st pre-market. US WTI crude oil approached $80, rising nearly 0.9% intraday, Brent crude oil rose above $84.50, up nearly 0.8% intraday. After the US stock market announced consumer inflation expectations in early trading, crude oil accelerated its decline and turned lower towards the end of the morning session.

At midday, US oil fell to $78.2, down more than 1.3% intraday, falling 2.2% from the daily high. Brent oil fell below $82.80, down nearly 1.4% intraday, falling more than 2.1% from the daily high.

In the end, both crude oils fell from the closing high set on Thursday, April 30th. WTI June crude oil futures closed down $1.00, or 1.26%, at $78.26 per barrel, hitting a low not seen since May 3rd; Brent July crude oil futures closed down $1.09, or 1.30%, at $82.79 per barrel, hitting a low not seen since March 12th, set last Friday.

US oil rose 0.19% this week, rebounding after a nearly 6.9% drop last week, while Brent oil fell 0.20%, falling for two consecutive weeks, far less than the largest weekly drop since February 2nd, which was about 6% last week. In the 31 weeks since the Israel-Palestine conflict broke out, US oil has risen for the 14th week, while Brent oil has fallen for the 8th week. After a more than 10% surge in the first quarter, in the six weeks of the second quarter so far, US oil has risen for the third week, while Brent oil has fallen for the fourth week.

London copper back above $10,000, London tin falls 1.5%, still rebounding throughout the week, gold hits three-week high and largest weekly gain in a month

London base metal futures mostly fell on Friday. London tin, which led the gains on Thursday with a rise of over 1.8%, fell 1.5%, failing to continue to approach the high set over a week ago on Tuesday, with London nickel, London aluminum, and London lead all falling after rebounding on Thursday. London nickel failed to approach the high set over the past two weeks. London aluminum fell by over 1%, hitting a low not seen since last Thursday, approaching the low set over the past three weeks. London lead began to fall from the high set in November last year. Meanwhile, London zinc rose for the second consecutive day, approaching the high set since the end of March last year. London copper, which closed flat on Thursday, rose by about 1%, marking the second day this week to close above the $10,000 mark.

Most base metals rose this week, with London copper rising by nearly 1%, rebounding after a four-week streak of gains last week. London zinc rose by over 0.9%, London lead rose by 0.3%, and London tin, which fell for two consecutive weeks, rose by over 0.3%. London nickel, which rebounded last week, fell by nearly 1.5%, London aluminum fell by nearly 0.9%, falling for three consecutive weeks Gold maintained its upward trend throughout Friday, with European stocks hitting their highest level since April 21 during the session. New York gold futures rose to $2385.3, up over 1.9% intraday, while spot gold rose above $2378, up nearly 1.4% intraday. After the release of U.S. consumer inflation expectations, the early gains in gold prices narrowed in the morning session, with futures falling to $2363.2, up less than 1% intraday, and spot gold falling below $2357, up less than 0.5% intraday.

By the midday close of the U.S. stock market, COMEX June gold futures closed up 1.48% at $2375 per ounce, rising for two consecutive days and hitting the highest closing level since April 19, with a weekly gain of nearly 2.9%. At the close of the U.S. stock market, spot gold was above $2360, up nearly 0.8% intraday, with a weekly gain of over 2.7%, marking the largest weekly gain since April 5 for both spot gold and futures, ending a two-week decline.

After the release of U.S. consumer confidence and inflation data, gold prices narrowed their gains intraday, while crude oil accelerated its decline and turned lower during the session.