Overnight US Stock Market | Dow Jones Plunges Over 760 Points to New Yearly Low; Spot Gold Drops 3.69%; Bitcoin Falls Over 4%

CryptoTimes App reports that on Wednesday, the three major indices closed sharply lower, with the Dow plunging over 760 points to hit a new low for the year. Investors continue to monitor the US-Israel-Iran war situation, including Iran’s attacks on Riyadh oil refinery zones exclusive to the US, as well as US military bases and Kurdish armed forces bases inside Iraq. The Federal Reserve announced today that it will keep interest rates unchanged. Chair Jerome Powell stated that rate hikes are not the primary expected policy direction at present, despite officials having discussed this possibility. Meanwhile, he emphasized that no options are off the table, and future policy will depend on economic data.

【US Stocks】 At the close, the Dow fell 768.11 points, or 1.63%, to 46,225.15; the Nasdaq dropped 327.11 points, or 1.46%, to 22,152.42; the S&P 500 declined 91.39 points, or 1.36%, to 6,624.70. SanDisk (SNDK.US) rose over 4%, Amazon (AMZN.US) fell 2.4%, Microsoft (MSFT.US) and Apple (AAPL.US) declined over 1.5%. The Nasdaq China Golden Dragon Index closed down 2%, Alibaba (BABA.US) fell over 1%, and Kingsoft Cloud (KC.US) rose 12%.

【European Stocks】 Germany’s DAX 30 index dropped 215.94 points, or 0.91%, to 23,504.82; the UK FTSE 100 fell 102.45 points, or 0.98%, to 10,301.15; France’s CAC 40 declined 4.61 points, or 0.06%, to 7,969.88; the Euro Stoxx 50 decreased 32.30 points, or 0.56%, to 5,736.95; Spain’s IBEX 35 rose 34.91 points, or 0.20%, to 17,282.01; Italy’s FTSE MIB fell 167.04 points, or 0.37%, to 44,720.50.

【Asian Markets】 The Nikkei 225 declined 2.87%, while South Korea’s KOSPI rose over 5%.

【Cryptocurrency】 Bitcoin dropped over 4%, trading at $71,322.74; Ethereum fell over 5%, trading at $2,202.33.

【Crude Oil】 NYMEX April light crude futures rose 11 cents to close at $96.32 per barrel, up 0.11%; London Brent May futures rose $3.96 to close at $107.38 per barrel, up 3.83%.

【US Dollar Index】 The dollar index, measuring the USD against six major currencies, rose 0.52% today, closing at 100.092. At the New York close, 1 euro was worth 1.1516 USD (down from 1.1542), 1 British pound was 1.3341 USD (down from 1.3360). The USD was 159.41 Japanese yen (up from 159.00), 0.7902 Swiss francs (up from 0.7847), 1.3701 Canadian dollars (up from 1.3697), and 9.3346 Swedish kronor (up from 9.2737).

【Metals】 Precious metals declined sharply, with spot gold down 3.69% to $4,818.71; spot silver closed at $75.338.

【Macro News】

Fed Holds Steady, Maintains 2026 Rate Cut Expectation. The Federal Reserve kept interest rates unchanged on Wednesday and expects inflation to rise and unemployment to remain stable, with only one rate cut expected this year. These forecasts reflect assessments of risks from the US and Israel-Iran conflicts. The new forecast shows only a 0.25 percentage point rate cut by year-end, with no specific timing mentioned. This aligns with previous projections and contradicts Trump’s calls for significant rate cuts. The Fed’s statement said, “The evolving situation in the Middle East poses uncertain risks to the US economy.” It also noted that the unemployment rate remains stable. The new rate and economic forecasts suggest the Fed has largely excluded the impact of the oil crisis, still expecting to cut rates this year, and projecting inflation to reach 2.2% by the end of 2027, close to the central bank’s 2% target. Notably, no policymakers see further rate hikes by year-end, though one expects a rate increase by 2027.

Powell: Service Sector Inflation “Disappointing,” Fed Faces Difficult Situation. Fed Chair Jerome Powell said at a press conference that inflation in the services sector, excluding housing, remains high and “disappointing.” “We see no progress in this area,” he said. Meanwhile, tariffs have pushed up goods inflation. Powell stated, “For years, service sector inflation has been negative, now around 2%. Elevated inflation and a weak labor market force the Fed to balance delicately between the two. We are in a tough spot right now.”

“Fed Mouthpiece”: Powell Limits Trump’s Influence on Fed Decisions. “Fed mouthpiece” Nick Timiraos said Powell indicated that if his successor is not confirmed before his term ends on May 15, he will continue serving as Fed Chair. This is his most direct statement so far regarding the upcoming leadership change. Powell further said he will not leave the Fed Board as long as the Justice Department’s investigation into him is ongoing. He has not decided whether he will remain on the Board if the investigation concludes and a successor is appointed. It is confirmed that Powell can serve as a Board member until 2028 after his chairmanship ends. This decision significantly impacts Trump’s ability to reshape the Fed. If Powell remains, Trump loses a potential appointee. Currently, three of the seven Fed Board members are Trump appointees.

Economists: Markets May Be Misjudging the Fed’s Rate Cut Outlook. Oxford Economics’ US Chief Economist Michael Pearce said markets are gradually ruling out rate cuts in the near term, which may be a mistake. “My main conclusion is that rate cuts are still firmly on the agenda,” Pearce noted. The broader Fed forecasts show that despite stronger economic growth, labor market conditions have not tightened significantly, explaining why most officials still see a rate cut path this year. He added, “From market pricing, if anything, the market views the impact on long-term inflation as mildly disinflationary rather than inflationary.”

Samsung Electronics Strike Risk Could Disrupt Semiconductor Supply Chain. Over 66,000 Samsung Electronics union members in South Korea voted, with 93.1% supporting a strike. If no major changes occur, union members could strike nationwide from May 21 to June 7. Analysts say a large-scale strike could impact half of the semiconductor production capacity at the Pyeongtaek plant in Gyeonggi Province. A two- to three-week strike could cost Samsung up to $3.4 billion to $6.8 billion in losses. Previously, Samsung led the mass production of sixth-generation high-bandwidth memory (HBM4), used by US chipmaker Nvidia (NVDA.US) for next-gen AI platforms. A large-scale strike during critical production phases could directly affect downstream AI product deliveries. Industry experts warn that restricted output could drive up related product prices and cause market volatility.

【Stock News】

Media: Tesla (TSLA.US) CEO Elon Musk Negotiates Settlement with SEC Over Twitter Share Disclosure, Paving Way for SpaceX IPO. According to a court document from the SEC, Musk is negotiating a settlement regarding his failure to disclose Twitter stock purchases before making a 2022 April takeover bid. Reports say SpaceX’s bankers want to settle this matter before possibly launching the largest IPO in history. Under regulations, investors acquiring 5% or more of a public company must disclose ownership within 10 days. Musk disclosed his holdings 21 days after crossing that threshold. He also filed a “13G” form for passive investors instead of the “13D” form intended for activist investors or those making takeover bids. Musk’s lawyers told the court earlier this month that, to some extent, these negotiations occurred without the SEC’s legal team involved.

AI Companies Compete for Pentagon Contracts, Google (GOOG.US, GOOGL.US) May Be the Biggest Winner. Last month, AI firm Anthropic clashed with the US Department of Defense over military AI applications. Meanwhile, Google Cloud CEO Thomas Kurian held a low-profile meeting with Pentagon officials, promoting Google as an ideal defense partner, without controversy. On February 26, Kurian met Pentagon officials responsible for AI tool selection. Sources say Google already collaborates with the Defense Department, and Kurian promised to expand supply of top AI tools steadily, avoiding public disputes like competitors. After the controversy, the Pentagon ended its partnership with Anthropic and signed with OpenAI, which faced internal and external opposition, leading to quick contract revisions. Google successfully expanded its cooperation, with its AI systems integrated into the Pentagon’s non-classified networks, announced last week. Meanwhile, OpenAI and Anthropic are embroiled in political disputes over defense collaborations, while Google maintains an advantage, avoiding controversy.