When discussing tariff policies, Powell remarked that the Federal Reserve should refrain from making pronouncements on this issueHe emphasized his belief that countries that engage in free trade typically experience faster economic growthHowever, due to the uncertainty surrounding which specific tariff policies will be implemented, their exact effects on the economy and markets remain unknown, creating a climate of unpredictability that adds to the difficulty and risks faced by investors.

Institutions employing sentiment models to evaluate Powell's statements found them slightly hawkish, although still within a neutral range

Advertisements

Analysts, based on Powell's remarks and recent comments from other Federal Reserve spokespersons, believe that the Federal Reserve is likely to maintain a "wait-and-see" policy stance in the upcoming meetingsThis expectation quickly triggered a chain reaction in the financial markets.

Following Powell's speech, the US dollar index experienced a brief decline, falling by 0.21% to 108.098. Powell's reaffirmation of the anti-inflation commitment and signals of no immediate rate cuts led to a rise in yields across the US Treasury curveSpecifically, the yield on the 10-year Treasury rose 3.7 basis points to 4.532%, the 20-year yield increased by 3.6 basis points to 4.796%, while the 5-year yield climbed 3.3 basis points to 4.366%.

The spot gold market experienced volatilityDuring Powell's comments, gold prices surged to an intra-day high of $2942 per ounce but then quickly fell, briefly dropping below $2900 and hitting a low of $2881.70. Currently, gold is down 0.38% but has managed to return above $2900, trading at $2906.440 per ounceSilver also faced declines, dropping 0.43% to $31.923 per ounce as concerns regarding US tariff policies, continual changes in the global economic landscape, and escalating geopolitical risks intensified, highlighting gold's status as a primary safe-haven asset with increasingly pronounced price fluctuations.

In contrast, the crude oil futures market exhibited a rebound across the boardBrent crude oil futures rose 1.17% to $76.760 per barrel, while US West Texas Intermediate (WTI) futures gained 1.01%, reaching $73.050 per barrelThis rebound could be attributed to various factors, including expectations of global economic recovery, changes in geopolitical dynamics, and decisions from the Organization of the Petroleum Exporting Countries (OPEC) regarding output policy.

On Wall Street, the three major US stock indices opened lower but experienced short-term fluctuations before collectively rallying, even briefly turning positive during intraday trading

Advertisements

However, this surge proved fleeting, as the Dow Jones Industrial Average began to retract, resulting in a mixed picture for the indicesAs of the time of writing, the Dow is up 0.11%, the Nasdaq down 0.11%, and the S&P 500 is essentially unchanged, rising 0.01%. Notably, aluminum stocks led the way with gains exceeding 4%, likely attributed to increased demand for global infrastructure projects and changes in the supply-demand balance within the aluminum industryIn contrast, Chinese tech stocks and data center concepts both rose more than 2%, reflecting strong growth in the technology sector, while mobile payment concepts fell over 5%, possibly due to increasing industry competition and changes in regulatory policies.

The performance of the so-called "Seven Sisters" of US stocks also variedNvidia saw a 0.43% increase, supported by its leading position and continued innovation in artificial intelligence; Tesla's stock dropped 3.77% amid rising competition, increased supply chain costs, and changes in the macroeconomic environment; Apple gained 3.06%, buoyed by its recent collaboration with Alibaba to introduce AI features in China—this move is seen as a strategy to reclaim market share after recent sales declines in the region; Microsoft slipped 0.39%, while Meta fell 0.06%, Google dipped 0.81%, and Amazon dropped 0.82%, all influenced by myriad factors including their business developments, competition, and broader economic conditions.

Latest updates from the Federal Reserve watch tools indicate that the probability of a rate cut in March is a mere 4.5%, while the likelihood of maintaining the current rate has surged to 95.5%. For May, the chance of a rate cut stands at only 22.4%, with a 76.7% probability of keeping rates unchangedCurrently, the market broadly anticipates that the earliest potential rate cut could occur during the Federal Reserve meeting scheduled for July 30. This expectation will significantly impact the direction of the financial markets in the foreseeable future, compelling investors to closely monitor the Federal Reserve's actions and adjust their investment strategies accordingly.