US stock market closes flat amid concerns of prolonged high oil prices... Bitcoin and gold prices fall

A trader at the New York Stock Exchange

On the 27th (local time), major indices of the New York stock market closed flat, maintaining expectations for strong earnings from big tech companies despite concerns of prolonged energy supply disruptions.

The Dow Jones Industrial Average closed at 48,861.81, down 280.12 points (-0.57%) from the previous trading day on the New York stock market today.

The S&P 500 index closed at 7,135.95, down 2.85 points (-0.04%) from the previous trading day, while the tech-heavy Nasdaq Composite index closed at 24,673.24, up 9.44 points (0.04%) from the previous trading day.

As concerns grew that energy supply disruptions would be prolonged more than expected, international oil prices surged, contributing to a weakening of investor sentiment.

The US Wall Street Journal (WSJ) reported yesterday that US President Donald Trump instructed his aides to prepare for a long-term naval blockade against Iran to achieve Iran's nuclear abandonment.

US online media Axios and others reported that President Trump recently met privately with oil industry executives to discuss the impact of the Iran conflict on the energy market and countermeasures. It was reported that the Trump administration shared the situation that the naval blockade against Iran could continue for several more months.

Brent crude futures, an international oil price benchmark, surged 6.1% today to close at $118.03 per barrel. Brent crude futures also hit an intraday high of $119.76 per barrel today, reaching their highest level in about four years since June 2022.

Meanwhile, the decline in stock indices was limited as investors maintained an optimistic outlook on big tech earnings announcements after the market close today.

The US central bank, the Federal Reserve (Fed), froze its benchmark interest rate at 3.50-3.75% today as expected.

With the confirmation of Kevin Warsh, a candidate for the next Fed Chairman, passing the US Senate Banking Committee today, Fed Chairman Jerome Powell stated that he would remain on the Fed's Board of Governors until the investigation against him is clearly concluded, even after his term as chairman ends on the 15th of next month.

Furthermore, three Fed members with voting rights for interest rate decisions this year, Beth Hammack, Neel Kashkari, and Lorie Logan, expressed dissenting opinions by opposing the inclusion of the phrase 'easing bias' in the policy statement, reflecting the widening gap in opinions among Fed members.

Market participants interpreted the Fed's decision and Chairman Powell's remarks today as hawkish (favoring monetary tightening).

According to FedWatch by the Chicago Mercantile Exchange (CME), the interest rate futures market reflected approximately a 12% probability that the Fed would raise the benchmark interest rate by more than 0.25 percentage points by December. Just a day earlier, this probability was 0%.

As market participants withdrew expectations for an interest rate cut this year, the probability that the Fed would freeze interest rates this year rose from 80% the previous day to 85% today.

Bond yields rose (bond prices fell) amid concerns of prolonged high oil prices and expectations of the Fed's hawkish policy stance.

According to electronic trading platform Tradeweb, the yield on 10-year US Treasury bonds was 4.42% around the close of the New York stock market, up 6 basis points (1bp = 0.01 percentage points) from the previous session, reaching its highest level in a month since late March.

The yield on 2-year US Treasury bonds, which is sensitive to monetary policy changes, rose 9 basis points from the previous session to 3.94% at the same time.

International gold prices fell, continuing their downward trend for three consecutive trading days.

According to Reuters, spot gold prices were trading at $4,528.18 per ounce, down 1.4% from the previous session as of 2:14 PM ET, marking their lowest level in a month.

Bitcoin, the leading cryptocurrency, also saw its price fall.

According to CoinMarketCap, a cryptocurrency market data site, the spot price of Bitcoin is currently trading at $75,860, down 0.65% from the previous day at the time of reporting. Bitcoin has fallen by 3.685% over the past week.