Dow Jones drops below the 48,000-point mark

On Thursday Eastern Time, geopolitical tensions pushed oil prices higher, intensifying inflation concerns. Expectations for Federal Reserve rate cuts weakened. Additionally, rumors of the US planning to restrict AI chip exports caused US stocks to decline across the board, with the dollar strengthening on the back of these developments. At the close, the Dow fell 1.61% to 47,954.74; the Nasdaq dropped 0.26% to 22,748.99; and the S&P 500 declined 0.56% to 6,830.71.

Oil prices remained high, with WTI crude surging as much as 8% to break above $82, reaching a new high since July 2024. Although it pulled back slightly late in the session, it still gained 5.64%, closing at $78.87 per barrel. Brent crude rose 3.57% to $84.31 per barrel.

Spot gold and silver suddenly plunged sharply during trading. By the end of New York trading, spot gold fell 0.7%, and spot silver dropped 1.54%.

Berkshire Hathaway announced that it has restarted its stock buyback program this week. New CEO Greg Abel also disclosed that he personally purchased approximately $15.3 million worth of Berkshire stock and pledged to use his entire after-tax salary each year during his tenure to increase his holdings in Berkshire.

Major US Stock Indices Close Lower

On Thursday, the three major US stock indices all declined. The Dow initially fell over 1,100 points during the session but recovered some losses. By the close, the Dow was down 1.61% at 47,954.74; the Nasdaq fell 0.26% to 22,748.99; and the S&P 500 declined 0.56% to 6,830.71.

Oil prices saw WTI crude surge as much as 8%, surpassing $82, reaching a new high since July 2024. It later retreated slightly but still closed up 5.64% at $78.87 per barrel. Brent crude increased by 3.57% to $84.31 per barrel.

Options traders are increasingly betting that the Federal Reserve will not cut interest rates this year.

According to data compiled by the Atlanta Fed, as of Wednesday, traders estimate a 25% chance that the Fed will keep rates unchanged through December, up from 17% last Friday. Among all scenarios, “no rate cuts for the entire year” is now the most probable single outcome. Other possibilities include a 25 basis point rate cut once (24%) and two cuts (12%). Meanwhile, traders are even pricing in a 16% chance of rate hikes, up from 8% last Friday.

Industry analysts say, “When oil prices surge, their impact on inflation must be considered. This upward pressure on inflation reduces the likelihood of the Fed cutting rates.”

Additionally, Bloomberg reports that US officials have drafted regulations to restrict the shipment of AI chips worldwide without US approval. The legislation would grant Washington broad authority to decide whether and under what conditions other countries can build facilities for training and running AI models. The proposed rules would require companies to obtain US licenses to export nearly all AI accelerators produced by Nvidia, AMD, and similar firms. This would extend current controls, which cover about 40 countries, to a global scope.

Spot gold and silver suddenly plunged sharply during trading. By the end of New York trading, spot gold fell 0.7%, and spot silver dropped 1.54%.

According to Bloomberg, sources reveal that the Governor of the Polish Central Bank has proposed raising up to 48 billion zloty (about $13 billion) by selling gold reserves to fund national defense. The plan has received support from the Polish president. Governor Adam Glapinski outlined the proposal during a meeting with the president on Wednesday. He told the president that Poland’s central bank could generate profit by reducing some of its approximately 550 tons of gold reserves and then buy back later. Data shows that Poland’s central bank has been the world’s largest publicly reported gold buyer.

Market analysts believe that under the backdrop of a strong dollar and rising real interest rates, the appeal of non-yielding assets diminishes.

Large tech stocks showed mixed performance: Microsoft rose 1.35%, Amazon gained 0.98%, Nvidia increased 0.16%, Tesla fell 0.10%, Google A declined 0.74%, Apple dropped 0.85%, and Meta decreased 1.07%.

Chip design company Broadcom issued a strong earnings outlook, expecting its AI chip revenue next year to exceed $100 billion, boosting its stock by 4.8%.

The financial sector dragged down the market, with JPMorgan down 1.95%, Goldman Sachs falling 3.67%, and Morgan Stanley dropping 3%.

Most Chinese concept stocks declined: Nasdaq Golden Dragon China Index fell 1.4%, Bilibili dropped over 7%, Hesai fell over 6%, Tencent Music and China Internet Plus+ declined over 4%, Kingsoft Cloud and Miniso fell over 3%. Ctrip gained over 2%, while Bawang Chaji and Lufax Holdings rose over 1%.

Berkshire Hathaway Announces Restart of Stock Buyback

On Thursday, Berkshire Hathaway disclosed that it has resumed its stock repurchase program this week.

New CEO Greg Abel also revealed that he personally bought about $15.3 million worth of Berkshire stock and committed to using his entire after-tax salary each year during his tenure to increase his holdings in Berkshire.

The announcement was made before the market open on Thursday, and Berkshire B shares opened higher and rose more than 2.7% to close up 2.65%, hitting a new daily high. This is Berkshire’s first buyback since Q2 2024, after six consecutive quarters without repurchases. The company holds about $373 billion in cash reserves, and some investors expressed dissatisfaction with the lack of capital deployment.

In an interview, Abel said the buyback decision was made after assessing intrinsic value and in consultation with Warren Buffett, who remains chairman of Berkshire’s board. Buffett and other board members support Abel’s compensation and investment plan, praising “this is the Berkshire way.” Abel also disclosed that the timing of the buyback was communicated to shareholders during leadership transition.

Abel’s personal stock purchases amount to roughly his annual after-tax salary. He stated he plans to maintain this commitment annually during his CEO tenure, with total personal stock acquisitions reaching “several hundred million dollars.” He also expressed hope for a “twenty-year” CEO tenure.

Trump Claims “Must Personally Participate” in Selecting Iran’s New Leader

According to Xinhua, citing Axios on the 5th, former US President Donald Trump said he “must personally participate” in selecting Iran’s next leader.

In a phone interview with Axios, Trump said he would not accept the son of Iran’s late Supreme Leader Khamenei as Iran’s new leader. He stated, “I must be personally involved in the appointment.”

Trump also warned that if Iran produces a new leader who continues Khamenei’s policies, the US would be forced to “return to war within five years.”

Iran’s Tasnim News Agency reported on the 5th that Deputy Foreign Minister Ravanchi said Iran has established a three-member body responsible for state affairs after Khamenei’s assassination, until a new Supreme Leader is elected. The election will follow Iran’s constitutional procedures.

Additionally, multiple Iranian media outlets, including IRNA, reported on the 4th that Iran has identified several candidates for Supreme Leader and will select the new leader from among them.