01, U.S. stocks plummeted straight down

Last night, after the U.S. stock market opened, the trend was quite good for a long period, slowly rising. By 2:30 a.m., the U.S. stocks had risen to over 34,390 points, up by 280 points.

However, as it approached 3 a.m., the situation changed dramatically. The Dow Jones Industrial Average fell by 450 points in just 10 minutes.

After a brief pause, by 3:35 a.m., it suddenly fell further, reaching the lowest point of the day at 33,704 points, with the maximum drop during the session reaching 700 points.

The sudden decline was primarily due to the Federal Reserve's announcement of a 50 basis point interest rate hike, followed by Powell's further hawkish remarks.

02, Interest rate hikes continue

For some time, CPI and PPI data, as well as the PCE index, have indicated that U.S. inflation has begun to peak and decline. Recently, Federal Reserve Chairman Powell also hinted that the interest rate hike in December would be reduced. Therefore, the Federal Reserve's decision last night to raise interest rates by 50 basis points was already within market expectations.

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The U.S. stocks have risen in the past period, and this expectation has already been priced in. Instead, after the interest rate hike was announced, the good news was realized, leading to selling.

With little suspense left for the December interest rate hike, investors began to predict future rate hikes.

Many analysts believe that the interest rate hike in February next year will be reduced to 25 basis points, and it may even stop thereafter.However, it is quite clear that the latest dot plot indicates that the terminal interest rate will be above 5%, and among the numerous officials of the Federal Reserve, almost all have acknowledged that interest rates will be raised above 5% in the future. This suggests that more rate hikes are needed to reach above 5%.

Powell also stated that he adheres to the previous 2% inflation target, implying that monetary policy will not take a significant turn until inflation returns to 2%.

Regarding the next rate hike, Powell did not make a clear statement, emphasizing only that there are several inflation and employment data points before the February meeting that deserve the Federal Reserve's attention.

03, Indices and Individual Stocks

Following the speech of Federal Reserve Chairman Powell, the stock market experienced a noticeable decline.

The trends of the Nasdaq Index and the S&P 500 Index were very close to the Dow Jones Industrial Average, both experiencing two sharp declines.

At the close, all three major indices fell between 0.4% and 0.8%.

Almost all industry sectors covered by the S&P Index declined, with the financial sector leading the drop at 1.3%, real estate and raw materials also fell by more than 1%, while only the healthcare and biotechnology indices rose slightly.

Technology stocks also fell, with semiconductors experiencing a significant decline, with ON Semiconductor dropping nearly 5%, AMD fell by more than 3%, and NVIDIA's drop exceeded 2%.

The leading stock in new energy vehicles, Tesla, continued to fall by 2%, and has been declining for some time, with its market value now hovering around the $500 billion mark.META's stock price rose by 1.2% last night, marking the highest increase among large-cap technology stocks.

This morning, as Asian stock markets opened, Japan's Nikkei 225 index started with a gap down of 165 points. Under the influence of the Federal Reserve's continued interest rate hikes, it appears that global financial markets will continue to experience volatility.