Powell's speech dampens rate cut expectations, U.S. stocks turn negative during trading, and declines in U.S. Treasuries and gold widen

On July 30th, local time, the Federal Reserve announced its interest rate decision. The Federal Reserve maintained its stance during the July meeting as expected, although two voting members cast dissenting votes. After the statement was released, major assets showed little volatility. Federal Reserve Chairman Jerome Powell did not provide clear guidance on a rate cut in September during the press conference and mentioned that the U.S. labor market has not weakened, leading to a pullback in market rate cut expectations. U.S. stocks and Bitcoin turned to decline during the session, while U.S. Treasury bonds and gold saw an increase in losses, and the U.S. dollar surged.

Before the Federal Reserve's Decision Announcement

Before the Federal Reserve released its interest rate decision statement, U.S. stocks and the dollar rose during the day, while gold and U.S. Treasury bonds fell:

• The S&P 500 index rose by 0.23%, the Dow Jones remained roughly flat, the Nasdaq rose by 0.43%, the biotechnology index rose by 1%, the Philadelphia semiconductor index rose by 1.2%, the banking index rose by 0.5%, and the Russell 2000 index rose by 0.9%.
• The yield on the U.S. 10-year Treasury bond narrowed its increase to less than 2.8 basis points, reporting at 4.3481%; the yield on the two-year U.S. Treasury bond rose by 1.6 basis points, falling below 3.89%.
• The U.S. dollar index rose by 0.56%, currently reporting at 99.439 points.
• Spot gold fell by 0.76%, currently reporting at $3301.

After the Federal Reserve's Decision Announcement

At 2 PM local time, the Federal Reserve announced its interest rate decision, maintaining its stance again in the July meeting but revealing divisions, with two voting members supporting a rate cut, which was in line with expectations. The Federal Reserve's statement indicated that economic growth had slowed in the first half of the year.

After the Federal Reserve's statement was released, short-term U.S. Treasury bond yields plummeted, and U.S. stocks rose slightly after some fluctuations:

• The S&P rose by 0.29%, and the Nasdaq rose by over 0.5%.
• The yield on the two-year U.S. Treasury bond plummeted briefly, approaching 3.87% and flat. The yield on the 10-year U.S. Treasury bond fell slightly before rising, showing a more volatile overall trend.
• Spot gold maintained a decline of over 0.7%, reporting at $3303.

In the half-hour period from the release of the FOMC statement to Powell's press conference, major assets remained in a narrow range of fluctuations. U.S. stocks showed a slight increase overall after the statement was released, but the volatility was minimal. Gold saw a decline after the statement was released, and the yield on the two-year U.S. Treasury bond also decreased after the statement, while the U.S. dollar, Bitcoin, and other assets remained in a fluctuating state.

During Powell's Press Conference

During the press conference, Powell did not provide clear guidance on a rate cut in September. He also stated that the U.S. labor market has not weakened, which led to a pullback in market rate cut expectations, causing U.S. stocks to turn to decline during the session, and the prices of U.S. Treasury bonds and gold to see an increase in losses:

• Traders are no longer fully betting that the Federal Reserve will cut rates in October.
• Major U.S. stock indices turned to decline during the session, with the S&P 500 index dropping over 0.5%, retreating nearly 1% from its intraday high, and the Dow Jones dropping about 0.8% during the session. Apple fell nearly 1.7% during the session, while Nvidia remained up, but the increase was narrower than earlier in the session.
• The yield on the two-year U.S. Treasury bond rebounded briefly from around 3.86%, approaching 3.90%, with the overall increase during the day reaching nearly 3 basis points again. The yield on the 10-year U.S. Treasury bond also saw a significant rise
• The US dollar surged during the session, with the dollar index rising nearly 1% for the day.
• Spot gold fell below $3,289, hitting a daily low, with an overall decline of about 1.2%.
• Bitcoin dropped, with a 24-hour decline of about 1%, retreating from the gains made in the early trading session on Wednesday Eastern Time.

After Powell's Press Conference

After Powell's press conference, US stocks, US Treasuries, gold, and Bitcoin all fell, while the dollar rose:

• The S&P 500 index fell 0.35%, the Dow Jones dropped 290 points for a decline of 0.64%, the Nasdaq fell 0.06%, the semiconductor index rose 0.54%, the bank index fell 0.63%, and the Russell 2000 index dropped 0.47%.
• The yield on the US 10-year Treasury rose by 5.16 basis points to 4.3720%, hitting a daily high of 4.3780% just before the end of the press conference; the yield on the 2-year Treasury rose by 6.56 basis points to 3.9365%, reaching a daily high of 3.9406% near the end of the press conference, and briefly fell to nearly 3.86% after the opening remarks.
• The dollar index rose about 0.9%, hitting a daily high of 99.881 points, having retreated to near 99.200 points at the beginning of the press conference, showing two significant upward trends today—following the release of the US ADP non-farm employment data and GDP data, there was also a wave of increase.
• Spot gold fell 1.55%, hitting a daily low of $3,274.29 per ounce.

Major Asset Trend Charts

The chart below shows the trend of the S&P 500 index:

The chart below shows the yield on the 2-year Treasury:

The chart below shows the yield on the 10-year Treasury:

The chart below shows the trend of the dollar:

The chart below shows the trend of gold:

The chart below shows the trend of Bitcoin: