Today’s price action:
*In the past 24 hours, both Bitcoin and Ethereum have seen modest price increases, accompanied by notable trading activity around key price levels, signaling strong accumulation and buying pressure. While there is short-term bullish momentum, both assets are still trading below important moving averages, suggesting a cautiously optimistic outlook.
Friday
*Wall Street traders reignited expectations for a half-point interest rate cut by the Federal Reserve next week, driving a shift toward stocks that stand to benefit most from policy easing.
*Economically sensitive stocks outpaced tech megacaps, which have led the recent bull market rally. The Russell 2000 index, rose about 2%, while an equal-weighted version of the S&P 500, where companies like Nvidia and Dollar Tree have equal influence, outperformed the main index. This shift suggests the rally may expand beyond the largest companies.
*Traders increased the odds of a large Fed rate cut to 40% on Friday, boosting US government bond prices.
*US consumer sentiment reached a four-month high in early September, driven by the lowest short-term inflation expectations since late 2020 and the potential for lower interest rates.
*MicroStrategy Inc. purchased 18,300 Bitcoin for approximately $1.11 billion, marking its largest acquisition of the cryptocurrency in over three years.
Thursday
*Stocks fluctuated as a stronger-than-expected inflation report failed to significantly impact expectations for Federal Reserve rate cuts. The S&P 500 struggled to maintain momentum following a three-day rally, while Treasuries remained relatively unchanged. Traders still anticipate a quarter-point rate cut from the Fed next week, with 100 basis points of easing projected for the year.
*The European Central Bank (ECB) reduced interest rates for the second time this year, cutting its key deposit rate by 25 basis points to 3.5% amid easing inflation and growing economic concerns. ECB President Christine Lagarde noted downside risks to the eurozone but emphasized no firm commitment on future rate paths.
*In the US, jobless claims rose for the first time in three weeks, increasing by 2,000 to 230,000. Meanwhile, producer prices saw only a slight increase in August, with key components related to the Fed’s preferred inflation measure remaining subdued.
Wednesday
*Stocks dropped in early trading, and bond yields climbed after a surprise uptick in consumer prices fueled concerns about inflation. The bond market faced pressure after the inflation report, which raised speculation that the Federal Reserve may slow the pace of rate cuts. S&P 500 futures fell by 0.5%, while the yield on 10-year Treasuries rose two basis points to 3.66%. The dollar showed mixed movement.
*Core CPI, excluding food and energy, increased 0.3% in August, up from 0.2% in July, according to the Bureau of Labor Statistics—higher than the estimated 0.2%. Traders now expect the Fed to reduce rates by just a quarter-point next week, following the hotter-than-expected core inflation data.
*Bitcoin declined as markets responded to the US presidential debate between Kamala Harris and Donald Trump, who has shown support for the crypto industry. Analysts and a CNN poll indicated that Harris outperformed Trump in the debate. Swift also endorsed Harris post-debate.
Tuesday
*Stocks struggled to gain momentum following cautious forecasts from some of Wall Street’s largest banks. Brent oil dropped below $70 amid growing concerns over oversupply.
*After a strong start to the week, the S&P 500 showed signs of wavering. The KBW Bank Index fell by 2.5%, with JPMorgan seeing a drop after President Daniel Pinto warned that analysts may be overly optimistic in predicting next year’s expenses and net interest income. His comments came after Goldman Sachs CEO David Solomon signaled a potential 10% decline in third-quarter trading revenue.
*Kamala Harris and Donald Trump are set to debate in Philadelphia on Tuesday night in what could be their only face-off before the November election, raising the stakes in an already unpredictable race.
*Despite investor caution around spot Bitcoin funds, State Street Global Advisors and Galaxy Asset Management are introducing three new cryptocurrency-focused exchange-traded funds.
Monday
*Stocks partially rebounded on Monday after a selloff driven by cooling US jobs data, which left economists and traders divided on how aggressively the Federal Reserve might cut interest rates. Nasdaq 100 futures rose nearly 1%, recovering from last week’s steepest decline since November 2022. Meanwhile, bonds gave up some recent gains, with the 10-year Treasury yield rising four basis points, marking its first increase in five days.
*Former ECB President Mario Draghi urged the EU to invest up to €800 billion annually and commit to issuing common bonds regularly to better compete with China and the US.
*Donald Trump vowed to make it prohibitively expensive for nations to move away from the US dollar, adding a new element to his tariff strategy.
*Bitcoin ETFs in the US saw their longest streak of daily net outflows since their launch earlier this year, reflecting a broader shift away from riskier assets amid volatile global markets. Investors withdrew nearly $1.2 billion from 12 ETFs over the eight days through Sept. 6, amid concerns about economic growth.
