Powell's Hawkish Remarks Dampen Rate Cut Expectations; Nasdaq LeadsDecline as Tech Stocks Under Pressure

Powell's Hawkish Speech Dampens Rate Cut Expectations; Nasdaq Leads Decline Among Three Major Indices

In the early hours of Wednesday Beijing time, Federal Reserve Chair Jerome Powell delivered remarks signaling a distinctly hawkish stance, stating that the Fed will maintain its tightening monetary policy stance amid incomplete alleviation of inflationary pressures. This statement significantly reduced market expectations for rate cuts in the near term, and as a result, the U.S. stock market experienced a notable pullback on Wednesday, with the technology-heavy Nasdaq Composite leading the three major indices lower.

Powell Reaffirms Tightening Stance; Rate Cut Expectations Cool Significantly

In his remarks, Powell noted that while inflation has eased from its earlier peaks, it remains above the Fed's 2% target, and economic data does not yet support an immediate shift to easing policy. He emphasized that the Fed will adopt a "wait-and-see" approach and will not readily adjust its monetary policy direction until it 确保通胀持续回落之前，不会轻assures sustained inflation declines.

Prior to Powell's remarks, markets widely expected the Fed to begin cutting rates in the second half of this year. However, following his speech, interest rate futures indicated a clear postponement of rate cut expectations. Analysts pointed out that Powell's hawkish stance has made markets realize that the monetary policy turning point may come later than anticipated, which directly pressure for high-valuation tech stocks.

Tech Stocks Under Broad Pressure; Nasdaq Leads Market Decline

Affected by cooling rate cut expectations, the Nasdaq Composite, heavily weighted with tech stocks,明显领跌三大股指。大型科技股普遍出现回调走势，市场资金开始从高估值成长股轮动至防御性板块。

Analysts believe tech stocks had previously benefited from the low-rate environment, resulting in generally elevated valuations. Once rate cut expectations cool, the key narrative supporting tech valuations faces challenges, and profit-takers are choosing to lock in gains. Additionally, with monetary policy outlook uncertain, investors are inclined to reduce their exposure to risk assets and shift toward more stable investment vehicles.

Capital Flows Diverge; Risk-Off Sentiment Intensifies

In terms of capital flows, the market exhibited clear risk-off characteristics. The U.S. Dollar Index strengthened, reflecting capital flows back into dollar-denominated assets. Meanwhile, U.S. Treasury yields rose slightly, with the bond market also under pressure.

By sector, besides broad tech selloffs, growth-oriented sectors such as consumer discretionary and communication services also faced pressure. Meanwhile, traditional defensive sectors like energy and utilities proved relatively resilient, showing capital seeking relatively safe havens.

Short-Term Market Outlook

Regarding short-term market dynamics, analysts believe several key factors warrant attention: First, the nonfarm payrolls data due for release this Friday will serve as an important reference for judging the economic outlook; Second, the earnings season is about to begin, with tech giants' performance directly impacting market sentiment; Additionally, continued monitoring of subsequent Fed officials' remarks for more clues on monetary policy direction is necessary.

Overall, Powell's remarks were distinctly hawkish, and markets need time to digest this policy signal. Against the backdrop of cooling rate cut expectations, tech stocks may face sustained correction pressure. Investors should remain prudent, appropriately manage their positions, and wait for market sentiment to stabilize.

---

Risk Warning: The above content is for reference only and does not constitute investment advice. Investors should make careful decisions based on their own risk tolerance and consult professional investment advisors when necessary. Stock markets involve risks, and investment requires caution.