Market focus has shifted to Powell's press conference and details on economic forecasts.

The Federal Reserve cut rates by 25 basis points as expected but released hawkish signals, causing short-term volatility in U.S. stocks before closing higher, the U.S. dollar index remained steady, and silver reached an all-time high. Market focus has shifted to Powell's press conference and details on economic forecasts.

1. Global macroeconomics and policy

U.S. monetary policy

The Federal Reserve lowered interest rates as expected, but divisions have intensified: the target range for the federal funds rate was reduced from 3.75%-4.00% to 3.50%-3.75%, marking the third rate cut of the year (a total of 75 basis points). However, the dot plot indicates only one rate cut is expected in 2026, and three FOMC voting members opposed it (Milan advocated for a 50 basis point cut, while Goolsbee and Schmidt supported holding steady), representing the largest internal division since 2019.

Policy signals lean hawkish: The statement emphasizes that 'inflation remains relatively high' and announces the intention to purchase short-term government bonds to maintain adequate reserves, but does not commit to further easing. The market interprets this as 'hawkish rate cuts', with aggressive rate cut expectations for 2026 cooling down.

Economic data supports: In October, JOLTS job openings rose to 7.67 million (a five-month high), but recruitment remains sluggish, highlighting structural contradictions in the labor market.

China's economic policy

Retail innovation driven by demand: The Ministry of Commerce clarified at the National Retail Innovation Development Conference that during the 14th Five-Year Plan period, domestic demand will be driven by quality and service, with retail sales in convenience stores and supermarkets increasing by 6.4% and 4.4% year-on-year, respectively, in the first three quarters.

Regional banks join consumer loan interest subsidies: Regions such as Sichuan, Guizhou, and Chongqing have launched a 'national subsidy + local subsidy' coordinated policy, with local banks like Guiyang Bank and Chengdu Bank starting to accept interest-subsidized loans to stimulate consumption recovery.

Market and industry dynamics

Stock market

U.S. stocks fluctuated and closed higher: The Dow rose 0.92%, the S&P 500 rose 0.45%, and the Nasdaq edged up 0.06%. Tech stocks showed divergence, with Google and Tesla rising over 1%, but Nvidia fell 0.31%.

Eurasian market divergence: The German DAX rose 0.49%, while the Nikkei 225 fell 0.1%; the A-share Hainan Free Trade Zone sector led gains (+5.56%), while the ChiNext index fell slightly by 0.02%.

U.S.-listed Chinese stocks under pressure: The Nasdaq Golden Dragon Index fell 1.37%, with Baidu and Xpeng Motors down over 4%.

Foreign exchange market

The dollar index edged up 0.13% to 99.22, supported by hawkish signals from the Federal Reserve; the yen rose to 156.70 against the dollar, with expectations of interest rate hikes from the Bank of Japan heating up.

Commodities

Silver hits a historic high: Spot silver rose 4.72% to $61.16 per ounce, driven by tight supply and industrial demand (photovoltaics, AI hardware) pushing a short squeeze.

Gold's safe-haven attributes remain solid: COMEX gold rose 0.45% to $4236.6, with expectations of rate cuts offsetting the pressure from a stronger dollar.

Concerns over oil demand continue: WTI crude oil fell 1.07% to $58.25 per barrel, and Iraq's resumption of oil field production has intensified worries about oversupply.

Bond market

The yield on 10-year U.S. Treasury bonds rose to 4.209% (the highest since September), with hawkish statements from the Federal Reserve triggering bond sell-offs; the yield on 30-year U.S. Treasury bonds approached 4.82%.

Trends in sub-sectors and companies

Technology and AI

Competition among giants intensifies: Google announced the development of two types of AI glasses (display and audio types), with plans to launch in 2026; Oracle's stock rose 0.4% ahead of its earnings report, as the market focuses on its AI infrastructure debt risks.

Domestic GPUs break through: Muxi Co. becomes the second domestic GPU company to be listed on the A-share market, with several public fund managers receiving allocations exceeding 100 million yuan, accelerating semiconductor localization.

Energy and industry

Traditional energy transition: ExxonMobil fell 0.8%, with OPEC+ production cuts supporting oil price floors; China's shale oil annual output exceeded 1.7 million tons, reaching a historic high.

Green upgrade in manufacturing: Tiandi Technology plans to invest 3.545 billion yuan to build an intelligent equipment R&D center for coal mines, promoting the integration of the coal machinery industry chain.

Investment trends

Institutional repositioning for defense: SoftBank liquidated its Nvidia holdings, and Bridgewater reduced its long positions in tech stocks; Buffett increased his holdings in energy stocks betting on the transition.

Capital dynamics in the industry: Goldman Sachs warns of AI valuation risks, with funds rotating towards consumption and pharmaceuticals.

$ETH