Gold Ends the Month at Lows as Fed Tightening Overhang Weighs on Markets

Market Overview

Despite surging oil prices and an increasingly hawkish Federal Reserve stance acting as headwinds, U.S. equities managed to hold ground, supported by expectations for strong earnings from mega-cap companies. Both the S&P 500 and Nasdaq staged sharp intraday rebounds from session lows, closing nearly flat.

The Philadelphia Semiconductor Index remained the standout performer, gaining another 1.8% on the day and extending its year-to-date rally to 41.7%. However, the latest Fed decision revealed the highest number of dissenting votes since 1992, with markets now beginning to price in the possibility of rate hikes extending into 2027—effectively shattering expectations for rate cuts this year.

■ Semiconductors & Big Tech Earnings

The memory chip segment continues its strong momentum. NXP Semiconductors surged 25%, while SanDisk and Western Digital posted gains ranging from 8% to 10%.

Post-market earnings painted a mixed picture among tech giants. Alphabet exceeded revenue expectations, driving its stock up 6.6%, while Qualcomm surged 12%. In contrast, Meta plunged 6% after issuing aggressive capital expenditure guidance, signaling that investor tolerance for heavy AI-related spending is beginning to wane.

■ Energy & Precious Metals

Reflation concerns are becoming increasingly tangible. Brent crude surged 6% in a single session, reaching its highest level since 2022, while WTI crude climbed above $108 per barrel.

Meanwhile, spot gold declined for a third consecutive session, hitting a one-month low amid the dual pressure of a stronger U.S. dollar and rising Treasury yields. Safe-haven demand remains subdued in the face of persistent rate hike expectations. Silver followed suit, falling 2.4%.

■ Fixed Income & Cryptocurrencies

The bond market experienced a sharp sell-off. The 2-year Treasury yield jumped 10 basis points, while the 10-year yield reached a one-month high.

Bitcoin exhibited a sharp “inverted V” pattern, briefly dropping below $75,000. This reflects the ongoing liquidity drain from risk assets in a high interest rate environment.

■ Foreign Exchange

The U.S. Dollar Index rose 0.4%. Supported by rising global inflation pressures and a more hawkish Fed, the dollar continues to act as a capital magnet, exerting sustained pressure on non-USD currencies.

Key Themes to Watch● Warsh Fed Chair Nomination

The latest vote has cleared a major hurdle toward full Senate confirmation. If approved, Kevin Warsh is expected to assume the Fed Chair position before Jerome Powells term ends on May 15.

Warsh has pledged to reduce the Fed‘s balance sheet and introduce a new framework for managing inflation, though specific details remain limited. According to Fed watcher Nick Timiraos, Warsh’s nomination received zero Democratic support, marking the first purely partisan confirmation vote in Fed history.

● U.S. Durable Goods Orders Rebound Strongly

Core capital goods orders (excluding aircraft and defense) surged 3.3% month-over-month in March, significantly exceeding market expectations of 0.5%. This marks the largest monthly increase since mid-2020.

The sustained strength in capital investment over the past year has been partly driven by continued corporate spending on artificial intelligence initiatives.

Key Data to Watch (GMT+8)

20:30 (ET)

• Initial Jobless Claims (week ending Apr 25)

• Core PCE Price Index YoY (March)

• Personal Spending MoM (March)

• Employment Cost Index QoQ (Q1)

• Real GDP Annualized QoQ (Q1, preliminary)

• Real Personal Consumption Expenditures QoQ (Q1, preliminary)

• Core PCE Price Index Annualized QoQ (Q1, preliminary)

• Core PCE Price Index MoM (March)

21:45 (ET)

• Chicago PMI (April)

22:00 (ET)

• Conference Board Leading Economic Index MoM (March)

22:30 (ET)

• EIA Natural Gas Storage (week ending Apr 24)