Global News | U.S. stocks fluctuate, Federal Reserve rate cut expectations rise to 69%

【U.S. Stock Indices】

On February 13th, Friday, the three major U.S. stock indices moved mixed. The S&P 500 rose 0.05%, closing at 6,836.17; the Dow Jones increased 0.10% to 49,500.93; the Nasdaq declined 0.22% to 22,546.67.

【U.S. Bonds】

On February 13th, the benchmark 10-year U.S. Treasury yield was 4.04%, while the 2-year Treasury yield, most sensitive to Federal Reserve policy rates, was 3.40%.

【Popular U.S. Stocks】

Among popular stocks, Nvidia fell 2.23%, Apple dropped 2.27%, Google Class C declined 1.08%, Google Class A fell 1.06%, Microsoft decreased 0.13%, Amazon declined 0.41%, TSMC dropped 0.51%, Meta fell 1.55%, Tesla rose 0.09%, Seagate Technology increased 0.67%, Intel rose 0.67%.

【Global Indices】

【Chinese Indices】

On February 13th, overnight Hang Seng Tech Index futures fell 1.04%, Nasdaq China Golden Dragon Index declined 0.10%, FTSE China A50 Index dropped 1.27%.

【Chinese Concept Stocks】

In popular Chinese concept stocks, Tencent Holdings (HK) fell 0.65%, Alibaba dropped 1.95%, Pinduoduo rose 0.06%, NetEase increased 2.07%, Baidu declined 0.99%, Ctrip fell 0.06%, Li Auto dropped 1.81%, Xpeng rose 1.41%, NIO declined 0.10%.

【Forex and Commodities】

【Global News】

SpaceX Rumored to Use Dual-Class Share Structure in IPO to Strengthen Musk’s Control

Sources say SpaceX is considering adopting a dual-class share structure in its planned IPO this year, similar to strategies proposed by billionaire founder Elon Musk for Tesla. This structure would give certain shareholders extra voting rights, allowing them to dominate decision-making. It would enable Musk and insiders to maintain control even with minority stakes. Insiders also say the company is adding board members to facilitate the IPO and support Musk’s space ambitions beyond core rocket and satellite businesses. (Cailian Press)

Asset Management Giant Capital Group Bets on ECB Rate Hikes in 2026, Contradicting Mainstream Views

Capital Group, managing $3.3 trillion, states that the European Central Bank (ECB) will raise interest rates at least once this year, significantly boosting the euro against the dollar. This contradicts many investors and economists who expect the ECB to keep rates unchanged until 2027. Some even predict that if the Fed’s rate cuts under new Chair Powell lead Europe to act, the ECB might loosen policy. Currently, the market assigns less than a one-in-three chance of a 25 basis point cut. However, Edward Harrold, the investment director at Capital Group, expects European economic growth to accelerate, causing a divergence from Fed policy. He predicts the euro will rise to the high end of the 1.20 range by year-end. The euro/USD was around 1.1860 on Friday. (Sina Finance)

Fed Expected to Appoint Wall Street Lawyer Quinn as Head of Supervision

Two sources say the Fed plans to appoint Randall Guynn, a seasoned Wall Street lawyer with deep banking ties, as the new Director of Supervision. Guynn, formerly a partner at Davis Polk & Wardwell, has represented major U.S. banks. He will succeed Michael Gibson, who retired last July after over 30 years at the Fed. Since May 2025, Guynn has served as an advisor to Fed Board Vice Chair for Supervision Bowman. His appointment still requires a vote by the seven-member Fed Board. The timing of the closed-door vote is unclear. Once appointed, he will report to Bowman. Choosing Guynn marks a significant shift in Fed personnel, as this role has traditionally been held by long-serving internal staff since at least 1977. (Sina Finance)

Goldman Sachs: Still Expect Two Rate Cuts by the Fed in 2024, Next in June

Lindsay Rosner, head of multi-sector fixed income at Goldman Sachs Asset Management, says that with January’s CPI data not as strong as feared, the Fed’s rate normalization path appears clearer. This depends on continued signs of labor market improvement, as the FOMC is highly sensitive to labor market weakness. Goldman still expects two rate cuts this year, with the next in June.

Institutions: Powell Faces “Delicate Balance” Between Employment and Inflation Toward End of Term

An analysis of the January CPI report shows a 2.4% YoY increase, below previous and expected levels; core CPI, excluding volatile food and energy, rose 2.5%, in line with expectations. Earlier this week, the non-farm payroll report showed stronger-than-expected job gains and unemployment fell to 4.3%. While slowing inflation and steady employment are positive, Powell faces a delicate balancing act in his final months as Fed Chair: suppress inflation without harming the labor market. Aggressive rate hikes in 2022 helped curb soaring prices, but with inflation easing and employment cooling, the Fed has cut rates nearly 2 percentage points since summer 2024 and paused in January. As signs of easing price pressures grow, economists broadly expect inflation to decline further in 2026.

U.S. Interest Rate Futures Slightly Increase Probability of Fed Easing in June to 69%, Up from 63% Before CPI Data

U.S. interest rate futures now price in a 69% chance of the Fed easing in June, up from 63% prior to CPI release.

Traders See 50% Chance of Third Rate Cut by the Fed This Year

Traders assign a 50% probability that the Fed will cut rates a third time this year.

U.S. CPI Yearly Rate Falls to Lowest Since May 2022

The January U.S. CPI, unadjusted, rose 2.4% YoY, down from 2.7%, the lowest since May 2022, with a market median expectation of 2.5%.

U.S. Treasury Secretary: Senate Finance Committee Agrees to Hold Hearing on Wosh’s Fed Nomination

Treasury Secretary Yellen said Friday that, despite reservations from a key senator, the Senate Finance Committee has agreed to move forward with hearings on President Trump’s nominee, Wosh, for Fed Chair. She emphasized, “I think hearings are crucial. Chair Powell’s term ends mid-May, and anyone concerned about the Fed’s integrity and independence wants to see Kevin Wosh ensure continuity.”

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