Fed Shockwaves: Gold, Silver, Copper Slide as Oil Stumbles

On May 22, during the afternoon trading session, the U.SFederal Reserve released the minutes from its policy meeting held from April 30 to May 1, reaffirming its "hawkish" stanceThe minutes revealed that many policymakers expressed concerns about insufficient progress in lowering inflation, indicating that more time would be needed to establish confidence in reducing interest ratesThis suggests a prolonged view towards maintaining high rate levels.

As a direct consequence, all three major U.Sstock indices ended the trading session downwardsBy the end of the day, the Dow Jones Industrial Average lost 0.51%, the Nasdaq Composite fell by 0.18%, and the S&P 500 declined by 0.27%.

Trading in precious metals saw substantial declines as well, with COMEX gold futures dropping 1.80%, settling at $2382.3 per ounce

London gold also noted a decrease, registering at $2378.506 per ounce—a drop of 1.78%. Silver futures were not spared either, with a 3.39% decline at $30.990 per ounce, while the spot price in London fell 3.71% to $30.775 per ounceCopper futures also reflected downward trends, with LME copper plunging over 4%.

Federal Reserve Stays Hawkish

The minutes released on Wednesday outlined that the Federal Reserve decided to maintain the federal funds rate target range between 5.25% and 5.50% for May, persisting with its cautious approach to rate hikes.

According to the minutes, economic data indicated that inflation is more persistent than previously anticipated, and the overall economy remains resilient

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This has led to significant shifts in policy expectationsThe predicted path of monetary policy derived from futures prices implies fewer than two rate cuts by the end of the year, while options pricing suggests just one potential rate cut in 2024.

While inflation has eased somewhat over the past year, it remains elevatedThe committee has made no further progress towards its 2% inflation target in recent monthsThe group remains committed to achieving maximum employment and a 2% inflation rate over the long term, acknowledging that the balance of risks towards these targets has improved over the past year, albeit with uncertain economic prospects requiring close monitoring of inflation risks.

Several decision-makers expressed readiness to act should the risks to economic outlook intensify and necessitate further tightening of policy

They emphasized that future policy directions would hinge on upcoming data, evolving forecasts, and shifting risk balancesSome members proposed it might be beneficial to start discussions on the appropriate long-term structure of the Federal Reserve's portfolio.

U.SStock Indices Experience Collective Decline

Following the release of the Fed minutes, the previously volatile U.Sstock markets turned downward, culminating in a broader decline across all three major indicesThe Dow, in particular, faced its steepest drop in this month.

By market close, the Dow Jones had fallen by 201.95 points (0.51%), settling at 39,671.04 points; the Nasdaq Composite dipped 31.08 points (0.18%), ending at 16,801.54 points; and the S&P 500 decreased by 14.40 points (0.27%), closing at 5,307.01 points.

The international precious metals market experienced dramatic declines, with COMEX gold futures down 1.8% to $2382.3 per ounce and COMEX silver futures fell 3.39% to $30.99 per ounce

Last week, the NY copper market had experienced a short squeeze, but on this day, LME copper fell by $440 to reach $10,419 per ton, marking a decrease of 4.58%. .

International oil prices fell across the board, with U.Scrude for June contracts down 1.79% to $77.25 per barrel, while Brent oil for July contracts decreased by 1.51%, settling at $81.63 per barrel.

NVIDIA Posts Strong Earnings Results

Among various sectors in the market, three sectors in the S&P 500 saw gains while eight experienced declines.

Energy stocks faced widespread losses, with ExxonMobil down over 2%, and ConocoPhillips, U.S

Energy, Murphy Oil, Chevron, British Petroleum, Shell, and Western Oil each dropping more than 1%. Only Petrobras saw a slight decline.

Popular technology stocks mostly fellTexas Instruments, TSMC, Cisco, and Qualcomm rose over 1%, while Meta and Microsoft barely improvedAmazon, Eli Lilly, ASML, Broadcom, Apple, Alphabet, and Micron all recorded slight downturns, while Intel, Netflix dropped over 1%, AMD down over 2%, and Tesla fell more than 3%.

Despite a 0.54% drop in NVIDIA's stock, the company announced earnings that exceeded expectations in after-hours trading, leading to a spike of over 7%.

The financial report revealed NVIDIA's revenue reached $26.04 billion, surpassing expectations, translating to a 262% year-over-year growth in revenue

The net profit hit $14.88 billion, showcasing a remarkable 628% riseThe adjusted earnings per share were $6.12, higher than the anticipated $5.59.

NVIDIA further announced a 150% increase to its quarterly cash dividend, raising it from $0.04 to $0.10 per ordinary shareThe new dividend is equivalent to $0.01 per share after splitting and is set to be paid to all registered shareholders by June 28, 2024, for those recorded by June 11.

During a conference call, CEO Jensen Huang stated that the next industrial revolution has commenced and reaffirmed that artificial intelligence (AI) will undoubtedly enhance productivity across almost all industries.

Ryan Detrick from Carson Group noted, “Even with high expectations, NVIDIA has once again stepped up and delivered results