Author: Shenchao TechFlow

U.S. Stocks: Dow falls for the fifth consecutive day, Nasdaq held up by technology

On Wednesday, Wall Street experienced its most chaotic day since this round of rebounds began.

The Dow plummeted 280.12 points (-0.57%), closing at 48,861.81, marking its fifth consecutive day of declines, quietly setting the record for the longest losing streak since the rebound related to the Iran war began. The S&P 500 barely held its ground, falling just 0.04% to close at 7,135.95. The Nasdaq turned green, up 0.04% to close at 24,673.24, which is the most intriguing number on the daily chart: technology stocks stubbornly pinned the market in place thanks to post-market earnings expectations.

Two sets of numbers divided the logic of the day into two entirely different halves: before the market opened, statements from the Federal Reserve and oil prices; after the close, four reports that would determine future directions.

After the market closed on Wednesday, Alphabet, Meta, Microsoft, and Amazon collectively released their Q1 earnings reports. The conclusion was: business is strong, but the Capex bills are becoming increasingly difficult to explain.

Alphabet, the highest score across the board.

Revenue was $10.99 billion, exceeding expectations of $10.7 billion. Earnings per share were $5.11, but included $3.69 billion of unrealized equity gains, adjusted earnings exceeded expectations of $2.63. Google Cloud grew 63% to $20 billion, marking the highest growth rate ever, thoroughly surpassing last quarter's 48%; Search growth was 19%, YouTube ads grew 11%, an acceleration from last quarter's 9%. Net profit increased 81% year-on-year to $6.257 billion. Meanwhile, Alphabet described the 2027 Capex as "significantly higher than" the levels of 2026. The stock rose 6.6% after hours, with no controversy.

The 63% growth rate of Google Cloud is the most powerful figure on this report, proving one thing: the demand for AI in cloud computing has not peaked, and Alphabet is capturing the portion of the market that Microsoft previously let go.

Microsoft, standard but with a thorn.

EPS was $4.27, exceeding expectations of $4.06; revenue was $82.89 billion, exceeding expectations of $81.46 billion. Azure grew 40%, AI annualized revenue at $37 billion (year-on-year +123%), and paid users of Copilot surpassed 20 million. These numbers are solid in themselves.

The thorn lies in the guidance. The projected revenue for Q4 has a median of about $87.25 billion, lower than the market expectation of $87.53 billion. The operating profit margin is expected to drop from 46.3% to 44%. More critically, capital expenditures for the entire year have been raised to $190 billion, a 61% increase over 2025, with $25 billion stemming from the direct cost transmission due to rising chip and memory prices, a new bill that came after the war and AI demands. The share price rose slightly post-market and then turned negative, ultimately falling just over 1%.

Last week, Microsoft quietly renegotiated with OpenAI, terminating the revenue-sharing agreement, allowing OpenAI to freely enter AWS and Google Cloud. This essentially indicates that Microsoft acknowledges that betting exclusively on OpenAI is becoming an increasingly expensive choice.

Meta, advertising exceeds expectations but Capex scares the market.

Adjusted EPS was $7.31 (showing as $10.44 including $8.03 billion in tax benefits), with revenue at $5.631 billion, representing a 33% year-on-year growth; ad impressions grew 19%, and the price per ad increased by 12%, confirming normal operation of the ad engine. Q2 income guidance ranged from $5.8 to $6.1 billion, with the median slightly above expectations.

But the market only cares about one number: the annual Capex has been raised from $115-135 billion to $125-145 billion, a unilateral increase of $10 billion. Meta attributed the reasons to "rising component costs and increased data center expenses," which directly points to supply chain cost transmission brought about by Brent at $120. Daily active users slightly decreased to 356 million; Meta attributed part of the responsibility to the "internet disruption in Iran," a novel yet unverifiable explanation. Zuckerberg stated on the conference call that Meta is "on track to provide super intelligence to billions of people," yet the stock still dropped about 6% after hours. The market vote was clear: business is fine, but the bills are terrifying.

Amazon, the biggest surprise of the night.

EPS was $2.78, far surpassing the expectation of $1.64, exceeding by nearly 70%. Revenue was $18.152 billion versus an expectation of $17.730 billion, while AWS grew 28% to $3.759 billion, marking its fastest growth in three years and exceeding the market expectation of 26%. Advertising revenue was $1.724 billion, also exceeding expectations. The stock rose over 4% after hours.

However, one number from CFO Brian Olsavsky is worth noting: free cash flow plummeted 95% in the past 12 months, leaving only $1.2 billion because $20 billion Capex heavily invested in infrastructure. Amazon also added a detail: Capex increased further due to the satellite internet plan Leo. On the same day, Amazon announced that OpenAI models officially entered AWS, ending OpenAI's previous exclusive reliance on Azure.

Federal Reserve: Powell's last gavel, a startling 8 to 4 split

At 2 PM on Wednesday, the Federal Open Market Committee announced it was keeping the interest rate range at 3.50% to 3.75%, fully aligning with market expectations.

But that's not the real takeaway from this meeting.

The real news is: the voting result was 8 to 4, with four committee members opposing the status quo. This internal division is rare in many years; typically, Federal Reserve votes are almost unanimous, with even a single dissent being a sign of "intense controversy." Four dissenting votes are an incredibly rare signal in the history of interest rate decisions. There are substantial internal disagreements within the FOMC regarding current paths, with one faction of hawks believing that inflation driven by oil prices is already dangerously high, while another faction of doves fearing that the effects of the Iran war on the real economy are starting to show.

Powell stated during the press conference the most historically significant remark of his 18 years in office:

"What we face are four supply shocks: a pandemic, the Ukraine war, tariffs, and now Iran and soaring oil prices. Each supply shock has the ability to simultaneously raise inflation and increase unemployment, putting central banks in a real dilemma. The correct approach is to strive to balance both objectives."

Then, the central bank president who has been constantly harassed, sued, and threatened with firing by Trump since 2018 announced two things during his final press conference: first, he would step down as chair when his term expires (May 15) but remain on the Federal Reserve Board until the judicial investigation into the renovation of the Federal Reserve headquarters "is conclusively and transparently wrapped up." Second, he publicly congratulated Kevin Warsh, stating that "it will be a very normal transition," and added a sentence that left the room silent: "I believe he can withstand political pressures. I will take his words seriously."

The yield on the 10-year U.S. Treasury jumped over 6 basis points to 4.41% after Powell spoke, while the 2-year yield rose over 9 basis points to 3.94%. The conclusion drawn by the market was quite simple: high rates will be maintained for longer, and that's the last thing Powell was able to say.

Kevin Warsh's Senate Banking Committee vote was also completed on the same day, passing along party lines 13 to 11. Senator Thom Tillis had previously obstructed the vote, conditioned on the Justice Department withdrawing its investigation of Powell; on Wednesday, he received a commitment and voted in favor. The entire chamber is expected to confirm within a few weeks, and the Federal Reserve will officially countdown to the post-Powell era.

Oil Prices: Brent at $120, Trump announces indefinite blockade

If the UAE's exit from OPEC last week was a landmine, then Trump's statement on Wednesday was the fuse.

The Wall Street Journal quoted U.S. officials stating that Trump has clearly informed aides that the maritime blockade on Iranian ports will continue indefinitely until Tehran agrees to the nuclear agreement, rejecting any current peace proposals. Subsequently, Axios confirmed that Trump has formally rejected Iran's peace plan conveyed via Pakistan.

The reaction from the oil market was immediate.

Brent crude surged over 6% that day, closing at $118.03 per barrel, briefly touching $120.27 intraday, the highest point since June 2022 and since the outbreak of the Iran war. WTI crude rose nearly 7% to close at $106.88, surpassing the $100 mark for the first time since the war began. U.S. energy inventory data released the same day showed a significant decline in crude and refined oil inventories, and U.S. crude exports reached a historical high that week, surpassing 6 million barrels per day, shattering expectations of further narrowing supply gaps.

The implicit logic of oil prices is now quite clear: this is not a war that will end in a few weeks. The Strait of Hormuz has been closed for over nine weeks, and the inflation effects on the U.S. economy are transmitting from energy to overall prices. CPI is 3.3%, PPI is 0.7%, while the Federal Reserve has just told the market it cannot cut rates. Brent at $120 is a number not seen since Putin invaded Ukraine in 2022, where the peak was at $127, which took about three months to plunge the global economy into an inflation crisis.

This time, no one knows where the peak is.

Gold: $4,591 breaches support, overwhelmed by inflation and rates

Gold remained under pressure on April 29, hovering around $4,590-4,610, with weak rebounds.

The logic hasn't changed: Brent at $120 raises inflation expectations → the dollar strengthens → gold comes under pressure. Simultaneously, the jump in U.S. Treasury yields to 4.41% itself raises the opportunity cost of holding gold. This abnormal structure, where the fiercer the war, the higher the oil price, the less gold rallies, has persisted for a full four weeks.

The only thing that could change this structure is: peak oil prices. But after Trump announced the indefinite blockade, that inflection point's timeline has been pushed back once again.

Cryptocurrency: $75,100, the other side of Brent at $120

On April 29, Bitcoin fluctuated violently between $75,100 and $77,800, ultimately pressing down to around $75,100 after the Federal Reserve's decision, with intraday volatility exceeding $2,700. Ethereum opened at $2,289, trading near $2,330. The total market cap of cryptocurrencies globally was approximately $2.63 trillion, with the fear and greed index around 43, falling into the panic range.

The mechanics are very clear: Trump announced the indefinite blockade → Brent breaks $120 → Federal Reserve's 8 to 4 split + maintaining rates → 10-year U.S. Treasury yield jumps to 4.41%. The endpoint of this entire chain is: expectations of rate cuts are indefinitely postponed, and the discount rate for risk assets is rising, making the $80,000 door for Bitcoin even heavier now than it was a month and a half ago.

Bitunix analysts warned on Wednesday: if Brent remains above $110, it will continue to compress liquidity flowing into the cryptocurrency market because high oil prices mean consumers and institutions will burn more cash elsewhere.

However, there is one interesting note worth recording late at night.

On the same day that Powell finished speaking and Trump announced the indefinite blockade, Meta quietly announced the launch of stablecoin payment functionality across its entire platform, the closest action to Zuckerberg's ambitions for Libra after its failure four years ago. Fortune's report mentioned that the dollar's share in global forex reserves has fallen to 57%, and the discussion about the erosion of petrodollars has never been so close to reality.

These two things happening on the same day are not coincidental; they form a single logic.

Today's Summary: Powell is gone, oil price at $120 remains, MAG4 says business is fine but bills have increased

On April 29, three things happened simultaneously, defining the upper limit of this round of rebound:

U.S. Stocks: Dow fell 280.12 points (-0.57%) to 48,861.81, falling for five consecutive days. The S&P and Nasdaq were nearly flat. The Federal Reserve voted with a historically rare 8 to 4 split to maintain rates at 3.5%-3.75%, Powell delivered a farewell speech, and Warsh's succession countdown begins. The yield on the 10-year U.S. Treasury soared to 4.41%, locking in the expectation of maintaining high rates for longer.

Oil Prices: Brent surged over 6% to close at $118.03, touching $120.27 during the day; WTI closed at $106.88, both new highs since the war began. Trump announced an indefinite blockade, clearing any timeline for peace processes once again.

Cryptocurrency: Bitcoin fluctuated violently in the $75,100-77,800 range, closing around $75,100. Rate cut expectations have been delayed, and the logic of liquidity compression dominates, making $80,000 a distant dream in the short term.

Post-market MAG4 Summary: Alphabet surged 6.6% (Google Cloud +63%, the best overall); Amazon increased over 4% (EPS greatly exceeded expectations, AWS +28%); Microsoft slightly fell (results exceeded expectations but guidance pressured prices, Capex at $190 billion); Meta fell 6% (Capex increased by $10 billion, user decline, Iran to blame).

The market now only cares about one question: Brent at $120, or $140?

If the current price level is indeed the top, the upcoming corporate Q2 earnings reports will reflect rising costs but stable demand, still supporting tech stocks. However, if Brent follows the path of 2022 and continues to push towards $130-140, inflation expectations will breach the Federal Reserve's tolerance threshold, making it very likely that Warsh's first meeting after taking over will result in a rate hike, a market reset that will make everyone uncomfortable.

At least for today, one thing is certain: Powell used his last press conference to tell the world what he had never finished saying during his tenure—that the independence of the central bank is something that must be defended at all costs.