Three major indices close higher; Bitcoin briefly approaches $70,000 mark; Nvidia (NVDA.US) rises over 3% in after-hours trading

On Wednesday, the three major indices closed higher, with Bitcoin approaching the $70,000 mark at one point. Fitch Ratings stated that after replacing the 10% comprehensive tariffs with tariffs based on the International Emergency Economic Powers Act, the effective tax rate in the U.S. has dropped to 9.4%.

【U.S. Stocks】At the close, the Dow rose 307.65 points, or 0.63%, to 49,482.15; the Nasdaq increased 288.40 points, or 1.26%, to 23,152.08; the S&P 500 gained 56.06 points, or 0.81%, to 6,946.13. Nvidia (NVDA.US) rose 1.4%, after reporting earnings, it briefly surged over 3% in after-hours trading; Circle (CRCL.US) jumped 35%; Western Digital (WDC.US) increased 7.5%. The Nasdaq Golden Dragon China Index fell 0.48%, and Xpeng Motors (XPEV.US) declined nearly 3%.

【European Stocks】Germany’s DAX 30 index rose 153.73 points, or 0.61%, to 25,175.38; the UK FTSE 100 increased 115.21 points, or 1.08%, to 10,795.80; France’s CAC 40 rose 39.86 points, or 0.47%, to 8,559.07; the Euro Stoxx 50 gained 56.76 points, or 0.93%, to 6,173.36; Spain’s IBEX 35 increased 255.81 points, or 1.41%, to 18,445.31; Italy’s FTSE MIB rose 488.78 points, or 1.05%, to 47,140.50.

【Cryptocurrency】Bitcoin surged nearly 8%, trading at $69,141.45; Ethereum rose over 14%, to $2,111.69.

【US Dollar Index】The dollar index, which measures the dollar against six major currencies, fell 0.15% to close at 97.700. At the New York close, 1 euro exchanged for 1.1805 USD, up from 1.1779 USD; 1 British pound exchanged for 1.3551 USD, up from 1.3502 USD. The USD/JPY rate was 156.44, up from 155.78; USD/CHF was 0.7729, down from 0.7735; USD/CAD was 1.3678, down from 1.3704; USD/SEK was 9.0219, down from 9.0449.

【Crude Oil】NYMEX light crude for April delivery fell 21 cents to $65.42 per barrel, down 0.32%; Brent crude for April delivery rose 8 cents to $70.85 per barrel, up 0.11%.

【Metals】Spot gold increased 9%, to $5,168.92; spot silver was at $89.245.

【Macro News】

NY Fed: Decline in government bond attractiveness leads to rising “natural rate.” NY Fed researchers said a key global interest rate is rising, mainly due to decreased attractiveness of government bonds in terms of safety and liquidity. The so-called “natural rate” (the short-term rate when the economy is at full employment and inflation is stable, also called r-star) has shown a “statistically significant increase” since 2019, rising about 1 percentage point in the U.S. and other developed economies. Diminished investor interest in government bonds as safe assets may account for about 50% of this increase. Although the natural rate is theoretical, it is significant because it is an important reference for central banks in setting market interest rates. Fed Chair Powell compared it in 2018 to the “North Star” guiding sailors.

Fed Bostic: Federal Reserve’s independence has been eroded. Atlanta Fed President Bostic said Wednesday that cracks between the Fed and the White House have begun to erode public trust in the central bank’s political neutrality. This is one of the most direct warnings from senior monetary officials about the consequences of Trump’s tough stance on the Fed. In his farewell article before retiring in late February, Bostic stated that his colleagues within the Fed remain committed to keeping their work separate from politics. “But my recent visits over the past few months clearly show that the legal and rhetorical battles surrounding the Fed have led people from all walks of society to question its independence, which is deeply concerning.” Bostic is not the only Fed official emphasizing the importance of independence this year, but no one has warned as directly as he did on Wednesday that ongoing disputes could weaken public trust in the institution.

Fed Williams: Inflation remains a key issue. On Wednesday, Fed Vice Chair Williams said that high inflation is still a critical problem the Fed needs to address, though he did not specify how monetary policy should respond. “I believe we still have work to do on inflation,” he said, adding that “the labor market is quite strong.” He did not clarify how these factors influence his outlook on monetary policy. Williams previously expressed skepticism about the Fed’s rate cuts last year, when officials lowered the target range to 3.5%-3.75%. Markets expect further rate cuts this year, but officials have provided little guidance. Williams also discussed the Fed’s balance sheet, noting that internal discussions focus on understanding the appropriate level of reserve requirements for the financial system. He pointed out that the large holdings of mortgage-backed securities from past bond purchases continue to suppress housing borrowing costs. Due to the current size of the Fed’s mortgage holdings, mortgage rates could be 75 to 100 basis points lower than they otherwise would be.

Media: Tech giants pledge to build their own power supplies to control energy costs. According to reports, tech executives will meet with Trump at the White House before March and promise to build their own power supplies for new data centers to avoid additional energy costs borne by taxpayers. White House spokesperson Taylor Ruggles said, “Major tech companies will meet with President Trump next week at the White House to formally sign the ‘Electricity Price Protection Commitment’ announced in his State of the Union address. Under this initiative, these large companies will build, introduce, or purchase power supplies for new AI data centers to ensure that electricity prices do not rise for Americans as demand grows.” Companies participating in the March 4 event include Amazon, Google, Meta, Microsoft, xAI, Oracle, and OpenAI. Trump, Energy Secretary Granholm, and White House Office of Science and Technology Policy Director Michael Kratsios are leading the effort.

EU considers Trump’s tariffs a violation of agreement. Reports indicate that Trump’s new tariff plan will subject about €4.2 billion worth of EU exports to tariffs exceeding the 15% cap agreed upon in the EU-U.S. trade agreement. Sources familiar with the EU’s assessment said Trump’s new policy will raise tariffs on European exports including cheese, butter, some agricultural products, and various plastics, textiles, and chemicals above the maximum allowed. Tariffs on some spirits and other goods will be below 15%. When asked about Trump’s latest tariffs, EU Commission spokesperson Olof Gyllenstierna reiterated, “EU products must continue to enjoy the most competitive treatment, and tariffs cannot be raised beyond the clearly and comprehensively agreed upper limit.” He added that under the new tariff regime, about 7% of EU exports would exceed the 15% cap. EU trade chief Shefchovich has held multiple calls with U.S. Trade Representative Grier and Commerce Secretary Raimondo to discuss the impact of the Supreme Court ruling. Grier said the U.S. needs more time to comply with the agreement. “We may need two or three months to ensure we readjust tariffs in accordance with our commitments,” Grier said on Wednesday.

【Stock News】

Nvidia Q4 earnings beat expectations, company says demand for computing power remains strong. Nvidia (NVDA.US) reported fiscal Q4 revenue of $68.1 billion and data center revenue of $62.3 billion, both surpassing market expectations, and issued an optimistic quarterly revenue forecast, indicating large-scale AI computing construction is still on track. The company stated that revenue for Q1 FY2027 will reach about $78 billion, compared to Wall Street’s average estimate of $72.6 billion. CEO Jensen Huang said, “Our customers are racing to invest in AI computing.” This outlook helps ease market concerns about a potential AI investment bubble. Huang has repeatedly downplayed worries about unsustainable growth in AI hardware spending. The Wednesday report provided some evidence that short-term concerns may be exaggerated. Nvidia’s stock rose over 3% in after-hours trading.