US Stock Market Closes Flat Amid Concerns Over Prolonged High Oil Prices; Bitcoin, 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 performance from big tech (giant technology companies) despite concerns over prolonged energy supply disruptions.

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

The Standard & Poor's (S&P) 500 index closed at 7,135.95, down 2.85 points (-0.04%) from the previous trading day, while the technology-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, acting as a factor to weaken investor sentiment.

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

US online media outlets such as Axios 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 is reported that the Trump administration shared at this meeting that the naval blockade against Iran could continue for several more months.

Brent crude futures, the international oil price benchmark, closed up 6.1% at $118.03 per barrel today. Brent crude futures also touched a high of $119.76 per barrel during the day, reaching their highest level in approximately four years since June 2022.

Meanwhile, as investors maintained an optimistic view on big tech earnings reports after the market closed today, the decline in stock indices was limited.

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

While the confirmation bill for Kevin Warsh, the next Fed Chairman nominee, passed the U.S. Senate Banking Committee today, Fed Chairman Jerome Powell stated that even after his term as chairman ends on the 15th of next month, he would remain on the Fed Board of Governors until the investigation against him is clearly concluded.

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

Market participants interpreted today's Fed decision and Chairman Powell's press conference remarks 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 of the Fed freezing interest rates this year increased from 80% a day earlier to 85% today.

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

According to electronic trading platform Tradeweb, the yield on 10-year U.S. Treasury notes rose 6 basis points (1bp = 0.01 percentage point) to 4.42% near the close of the New York stock market, reaching its highest level in a month since late March.

The yield on 2-year U.S. Treasury notes, sensitive to monetary policy changes, rose 9 basis points to 3.94% at the same time compared to the previous trading day.

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

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

The price of Bitcoin, the leading cryptocurrency, also fell.

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 3.685% over the past week.