News on January 8: Data released on Tuesday showed that U.S. employment data was better than expected, and inflation in the service sector accelerated. These two pieces of data severely dampened expectations for a Federal Reserve rate cut, with the market anticipating that there may only be one rate cut this year, lower than the two rate cuts predicted in the dot plot.
According to 4E monitoring, after the data was released, all three major U.S. stock indexes fell, giving back the brief gains from earlier in the day. The S&P 500 index closed down 1.11%, the Dow Jones fell 0.42%, as investors took profits on large tech and chip stocks, with the Nasdaq plummeting nearly 1.9%. Nvidia dropped sharply by 6.22% after hitting a new high, and Tesla fell 4%. Cryptocurrency-related stocks Coinbase and MicroStrategy saw their prices decline by over 8% and 9%, respectively.
The cryptocurrency market also experienced severe volatility against the backdrop of falling U.S. stocks. Bitcoin sharply dropped after the U.S. stock market opened last night, falling from over $100,000 to a low of $96,181, with a 24-hour decline of over 4.8%. The situation improved slightly in the morning, with prices slowly rising above $97,000, but the overall downtrend had not dissipated. Ethereum and altcoins fared even worse, with most dropping over 10%, and market sentiment significantly waned. On Tuesday, the Bitcoin spot ETF turned from a net inflow of $544 million after two days to a net outflow, marking the largest net outflow in the past 10 days.
In the forex commodities sector, U.S. economic data was all better than expected, offsetting earlier dollar weakness caused by uncertainties surrounding Trump's tariff policy. The dollar index rebounded by 0.4%, moving away from a one-week low and hovering near a six-month high. Major oil-producing countries' oil production fell short of OPEC+'s output targets, supporting oil prices to rise over 1%. The simultaneous rise in the dollar and U.S. bond yields limited gains in gold prices, with spot gold hitting a daily high and rising nearly 1.1% before narrowing its gains.
Data released last night indicated that the U.S. economy is stronger than the market expected, shifting the debate around the Federal Reserve's interest rate trajectory from a few cuts this year to whether there will be any cuts at all. The market anticipates over a 95% probability of no rate cut in January, with some institutions even speculating that there will be no cuts before July. The Federal Reserve is likely to remain on hold this year, and if there is a rate cut, it may only be once. The market is filled with uncertainty, and risk assets are collectively under pressure. eeee.com is a financial trading platform that supports assets such as cryptocurrencies, stock indices, commodities gold, and forex, recently launching a USDT stablecoin financial product with an annualized return of 5.5%, providing investors with potential hedging options. 4E reminds you to pay attention to market volatility risks and to allocate assets wisely.