Summary
- Trump’s tariffs on India, U.S. Q2 GDP & ADP Employment Change keep traders on edge as market roundup eyes FOMC.
- Gold retreats toward a three-week low, Bitcoin prints a thee-day losing streak as U.S. Dollar Index hits the monthly high.
- Trump’s tough stand on Russia, the IMF’s revised global growth forecasts and anxiety before the Fed’s announcements challenge risk appetite.
- White House’s “Crypto Policy Report”, Q2 earnings from Meta, Amazon, Apple and Microsoft also eyed.
Market Roundup For Wednesday
Market players struggle to cheer the upbeat U.S. growth and employment details during the early hours of Wednesday’s U.S. trading session as anxiety escalates ahead of the monetary policy announcements from the U.S. Federal Open Market Committee (FOMC). Additionally, cautious mood before the White House’s “Crypto Policy Report” and Q2 earnings from the Wall Street leaders and U.S. President Donald Trump’s tariff announcement for India also challenge the risk-takers.
In doing so, traders hesitate to cheer the upbeat prints of the U.S. second-quarter (Q2) Gross Domestic Product (GDP) and July’s ADP Employment Change. On the same line were the early-day stimulus announcements from China and the International Monetary Fund’s (IMF) upward revision to the global growth forecasts.
Meanwhile, the EU-U.S. trade deal backlash in the bloc joins U.S. President Donald Trump’s 25% tariffs for India, to indirectly push Russia toward a peace deal with Ukraine, weighing on the sentiment. Additionally negative could be mixed growth figures from Germany and the European Union (EU), as well as fears that the U.S. Federal Reserve (Fed) might again disappoint Trump, despite holding rates unchanged, may be via a hawkish FOMC statement.
Against this backdrop, the US Dollar Index (DXY) jumps to the highest level in five weeks, up for the fifth consecutive day, while exerting downside pressure on the risk assets. This mainly pushes the spot Gold (XAU/USD) toward a three-week low and weighs on the Bitcoin (BTC/USD) for the third consecutive day. That said, WTI Crude Oil rises for the third consecutive day to refresh monthly high whereas the S&P 500 and Nasdaq reverse the previous day’s losses around all-time highs while Dow Jones struggles to recover.
The Prior Shakes
Ahead of the U.S. Open, Trump said the U.S. will impose a 25% tariff on goods imported from India starting on August 1. The Republican Leader cited India’s huge buying of military equipment and oil from Russia, “when everyone wants Russia to STOP THE KILLING IN UKRAINE,” as the key reason for his latest actions against “Good Friend” India.
On the other hand, an earthquake in Russia and a tsunami in Hawaii added to global tensions. Further, Trump called for a peace deal with Ukraine and warned that heavy tariffs would be imposed on countries still buying Russian oil.
In Europe, German Economic Minister Robert Habeck followed leaders from France while expressing disappointment with the EU-US trade deal.
On a positive side, the US Q2 GDP rose 3.0% annualized versus 2.4% expected and 3.8% prior. Further, the monthly readings of the U.S. ADP Employment Change also came in upbeat, with 104K figures compared to 78K expected and an upwardly revised -23K prior. Elsewhere, Q2 GDP from Germany and the EU has been mixed while the Bank of Canada (BoC) kept the benchmark rates unchanged, as expected.
That said, the International Monetary Fund (IMF) has revised global growth forecasts for 2025 and 2026 upwards, as well as improving GDP projections for the US, Europe, and China. Further, US-China trade talks concluded with the expected extension of the tariff pause and China’s Finance Minister Lan Fo’an announced plans for increased fiscal support to strengthen domestic consumption amid economic challenges, including trade-related headwinds.
Crypto Universe Stays Cautious, Wall Street Optimism Prevails
Even if the firmer U.S. Dollar joined a cautious mood ahead of the FOMC to weigh on the Bitcoin (BTC/USD) and Ethereum (ETH/USD) prices, the cryptocurrency traders remain optimistic ahead of the White House’s “Crypto Policy Report”.
In doing so, the market players cheer Wednesday’s announcement from the U.S. Securities and Exchange Commission (SEC) as it allowed authorized participants to exchange Exchange-Traded Product (ETP) shares directly for the underlying crypto assets—rather than settling in cash.
Apart from that, Strategy’s buying spree of Bitcoin and Trump’s optimism surrounding crypto, which is likely to offer more trader-friendly policies, add to the market’s positive bias.
Elsewhere, Wall Street saw slight declines on Tuesday as the U.S. Treasury Department saw huge demand for the seven-year bond offer. Even so, the U.S. equity benchmarks edged higher by the press time of Wednesday, mainly in anticipation of upbeat Q2 earnings from top-tier firms.
- Gold refreshes a three-week low, before posting a corrective bounce to $3,300 by the press time.
- Bitcoin (BTC/USD) remains under pressure after two-day fall, with mild intraday losses around $117,900 at the latest.
- Ethereum (ETH/USD) prints a three-day losing streak as bears flirt with $3,785.
- U.S. Dollar Index (DXY) hits monthly high, up for the fifth consecutive day to 99.40 as the New York trading bell rings.
- Wall Street consolidates: Having witnessed mild losses the previous day, Wall Street benchmarks print gains during the initial hours even if stocks in Asia and Europe edged lower.
- WTI Crude rises to five-week high, up for the third consecutive day to $69.50 at the latest.
FOMC, Q2 Earnings and “Crypto Report” Eyed…
Having witnessed the majority of the day’s scheduled catalysts, traders remain cautious while waiting for the U.S. Federal Reserve announcements, Q2 earnings from major companies like Amazon, Meta, Apple, and Microsoft, as well as the White House’s “Crypto Policy Report”.
Even if the U.S. central bank isn’t expected to alter the current monetary policy, growing discomfort among the policymakers, mainly due to Trump’s pressure for lower rates and Powell’s logical rejection, keeps today’s FOMC the key. It’s worth noting that the quarterly economic projections and Powell’s speech aren’t part of today’s Fed releases, but the FOMC statement will be closely observed after Fed Governor Waller’s latest dovish shift.
Should the policymakers appear divided, the US Dollar might witness a pullback, allowing major currencies, Gold, and cryptocurrencies to recover. However, strong support for the “Wait and See” bias might defend the US Dollar bulls and exert more downside pressure on the stated assets.
Equities are likely to remain firm, potentially reaching new highs if top-tier companies meet or exceed forecasts and the Fed matches dovish halt forecasts. Among them, details from Amazon, Meta, Apple, and Microsoft will be closely observed.
Cryptocurrency traders have an additional catalyst to watch amid huge expectations from the White House’s “Crypto Policy Report”, especially after the 180-day review. That said, policy optimism also takes clues from early signals suggesting the government’s plan to seize Bitcoins through legal enforcement actions by federal agencies and increase the national BTC reserve.
Should the anticipated White House report match market forecasts, the top-tier cryptocurrencies like Bitcoin (BTC/USD), Ethereum (ETH/USD) and Ripple (XRP/USD) may reverse the latest losses even if they need to ignore the U.S. Dollar.
Also read: Market Digest: Trade Stress and Fed Divide hit Markets, Bitcoin Dips to 118K
