Data released by the U.S. Bureau of Economic Analysis on Thursday (31st) showed that the annual growth rate of the U.S. PCE price index in September was 2.1%, a new low since the beginning of 2021, which was in line with market expectations. The previous value of the data was slightly revised up from 2.2% to 2.3%.
In addition, the inflation indicator relied upon by the Federal Reserve - the core PCE price index excluding energy and food prices - grew at an annual rate of 2.7% in September, slightly higher than the market expectation of 2.6%, but the same as the previous value.
The probability of the Federal Reserve cutting interest rates by 1 basis point in November is 94.5%
After the PCE data was released, the fact that inflation did not worsen provided strong support for the Fed's interest rate cut in November. As of the time of writing, according to the CME Fed Watch tool, the market currently believes that the probability of the Fed cutting interest rates by 1 basis point in November is as high as 94.5%, the probability of keeping interest rates unchanged is 5.5%, and the probability of cutting interest rates by 2 basis points is zero.
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The four major U.S. stock indexes plummeted
Although economic data showed that US inflation remained under control, the third-quarter earnings reports released by Meta and Microsoft, members of the US Seven, after the market closed on the 30th failed to impress investors, dragging down the performance of US stocks, with all four major indexes falling:
The Dow Jones Industrial Average fell 378.08 points, or 0.90%, to close at 41,763.46.
The S&P 500 fell 108.22 points, or 1.86%, to 5,705.45.
The Nasdaq fell 512.78 points, or 2.76%, to 18,095.15.
The Philadelphia Semiconductor Index fell 206.75 points, or 4.01%, to close at 4,946.75.
Although Meta and Microsoft's profits and revenues were higher than market expectations, Meta's user growth rate fell short of expectations and it also warned that AI costs will increase significantly next year. In addition, Microsoft's forecast that its Azure business growth will slow and costs will increase, these factors have exacerbated investors' risk aversion.
Bitcoin briefly falls below $70,000
Perhaps affected by the decline of U.S. stocks, Bitcoin began to fall after 19:00 last night. As of 04:45 this morning, the lowest price reached 69,688 U.S. dollars. At the time of writing, the price rebounded to above 70,000 U.S. dollars, with a drop of 3.12% in the past 24 hours.
Whether Bitcoin can maintain its position at this price and continue to rise in the future may still be affected by the performance of U.S. stocks in the short term.
The downward trend of Bitcoin has also triggered a general decline in the cryptocurrency market. Mainstream cryptocurrencies including Ethereum, SOL, ADA, etc. have basically experienced a 3-4% drop in the past 24 hours. This has resulted in nearly US$22.8 billion in liquidations across the entire network in the past 24 hours, and more than 80,000 people have been liquidated.
