- The Federal Reserve's meeting minutes reveal increasing internal disagreements among officials regarding the future path of interest rates, resulting in mixed performances among the three major U.S. stock indices at the close. Meanwhile, ongoing geopolitical tensions in the Middle East have significantly driven up international oil prices, heightening market concerns about the long-term stickiness of core inflation.
- Faced with the dual transmission of macroeconomic policy uncertainty and commodity cost pressures, major stock indices in Europe and Asia have generally experienced significant declines. Although there is a divergence among individual stocks within the technology sector, the trend of capital shifting towards defensive asset allocation is strengthening.
- The minutes reveal the decision-makers' dilemma in balancing between slowing inflation and core price pressures, with some officials even suggesting that higher interest rates may need to be maintained. This shift in policy stance is reshaping bond market pricing logic, continuously squeezing high-valuation equity assets.
Federal Reserve Meeting Minutes Reveal Policy Path Divergence
The meeting minutes show significant disagreements among decision-makers regarding the future trajectory of Federal Reserve (Fed) interest rates. Some officials believe that slowing inflation provides room for future rate cuts, while others are concerned about the stickiness of core prices, suggesting that policy rates may need to remain in the 3.5% to 3.75% range. This stalemate in policy stance has directly led to a reassessment of market expectations for rate cuts within the year, causing a shift in capital allocation preferences between long-term and short-term assets.
Equity Market Volatility and Sector Divergence
The three major U.S. stock indices closed with mixed results, with the Nasdaq slightly up by 0.20% and the Dow Jones down by 1.09%. There was a divergence within the technology sector, with SanDisk (SNDK.US) surging 6.7%, while Apple (AAPL.US) and NVIDIA (NVDA.US) fell by 1% and 3.6%, respectively, indicating a shift in funds between high-valuation leaders and specific themes. Meanwhile, Chinese concept stocks generally declined, with Alibaba (BABA.US) dropping by 11%, highlighting an overall retreat in cross-border risk appetite.
Worsening Geopolitical Situation Boosts Energy Inflation Expectations
Driven by geopolitical risks due to tightening U.S.-Iran relations, the international crude oil market has seen an influx of safe-haven and inflation-hedging funds. New York crude oil and Brent crude oil surged by 4.37% and 5.2%, respectively, closing at $73.52 and $78.02 per barrel. The rapid rebound in oil prices not only directly exacerbates global supply chain cost pressures but also strengthens financial markets' bullish expectations for core inflation, posing a direct challenge to major central banks' efforts to combat inflation.
Global Major Stock Indices Under Pressure and Forex Market Reassessment
Global risk assets have generally retreated under the dual pressures of policy and geopolitics, with Germany's DAX30 index closing down by 2.30% and South Korea's KOSPI plummeting by 5.35%, indicating a clear outflow of funds from high-risk assets. In the foreign exchange market, the U.S. dollar index, supported by safe-haven buying, stood at 100.990, while the yen further weakened against the dollar to 162.48. This dramatic forex market volatility is reshaping the valuation reassessment logic of multinational companies, exacerbating marginal liquidity tightening.
