Summary
- Market roundup for Monday portrays a lack of participation amid a cautious mood and reassessment of dovish Fed bets.
- Bitcoin hits six-week low, Gold lacks clear direction as U.S. Dollar rebounds.
- Powell’s Jackson Hole speech favored a September Fed rate cut, but his data-dependency raises the stakes on upcoming U.S. stats, challenging dovish expectations.
- Despite crypto market activity, major coins weakened during consolidation, and U.S. equities slipped ahead of key earnings reports.
- This week’s focus is on the U.S. Core PCE Price Index, alongside earnings reports from Nvidia, Alibaba, and Dell Technologies.
Market Roundup for Monday: The Normalization of Dovish Fed Bets
Dovish market sentiment appears to be settling on Monday, following a strong wave of optimism on Friday. Traders are now returning to pre-Jackson Hole expectations regarding the U.S. Federal Reserve’s policy outlook. A 0.25% interest rate cut by the Federal Reserve in September is now mostly priced in. Additionally, markets are currently expecting around 54 basis points (bps) of total rate cuts in 2025. This is a pullback from the over 60 bps of cuts that were anticipated immediately after Federal Reserve Chair Jerome Powell’s Jackson Hole speech.
This consolidation in the markets caused the U.S. Dollar’s corrective bounce and challenged the risk assets like equities, commodities, and cryptocurrencies. That said, Bitcoin (BTC) prints a three-day losing streak despite bouncing off a six-week low to $111K by press time. Further, the spot Gold (XAU) remains directionless around $3,373, struggling to defend Friday’s gains, whereas the U.S. Dollar Index (DXY) posts modest gains around 97.90 while consolidating Friday’s heavy losses.
The greenback’s rebound also justified a cautious mood ahead of the U.S. Core Personal Consumption Expenditures (PCE) Price Index, the Fed’s preferred inflation measure.
In doing so, the U.S. Dollar pays little heed to the downbeat Chicago Fed National Activity index for August, -0.19 versus -0.18 prior (revised). Further, the U.S. New Home Sales for July were also released, with 0.652 million actual outcome versus the 0.63 million market forecasts and an upwardly revised prior of 0.656 million.
At the same time, geopolitical risks weighed on sentiment and allowed the U.S. Dollar to defend its corrective bounce.
The widely anticipated Russia-Ukraine peace talks face setbacks as Russia attacked two Ukrainian villages and Kyiv launched drone strikes on Russian nuclear and power plants.
On the same line, Russian Foreign Minister Sergei Lavrov said President Vladimir Putin is willing to meet Ukrainian President Volodymyr Zelenskyy “when the agenda is ready,” but claimed it is not ready and accused Zelenskyy of rejecting all proposals.
Alternatively, U.S. Vice President JD Vance said on Sunday, per NBC News, that Russia has made “significant concessions” working towards a negotiated settlement in its conflict with Ukraine.
Crypto, Equity Update
In the crypto universe, major coins witnessed selling pressure amid the market’s cautious mood and the U.S. Dollar’s corrective bounce, despite upbeat industry news.
U.S. President Donald Trump’s crypto adviser, David Bailey, recently ruled out fears of a Bitcoin (BTC) downtrend while saying, “Bitcoin Bear Market Is Likely Over.” The crypto czar also mentioned that it will be a few years before there is another Bitcoin downturn, defending the BTC buyers after a three-day losing streak and a retreat after refreshing the all-time high (ATH) early in August.
Furthermore, the Philippines unveiled plans to add Bitcoin to its central bank reserves. The Asia-Pacific nation also signaled that it could hold 10,000 BTC.
Elsewhere, Binance supported India’s Narcotics Control Bureau (NCB) in taking down the country’s largest darknet drug syndicate, “Ketamelon.” Binance provided crucial blockchain analysis, traced transactions, and froze assets, helping authorities arrest the mastermind, Edison Babu. He used Monero (XMR) and Tether (USDT) for anonymous payments and exploited India’s postal system for discreet deliveries.
Also read: India’s NCB and Binance Smash ‘Ketamelon’ Darknet Syndicate in $1.2M Bust
Furthermore, Japan’s Financial Giant SBI Group partnered with Chainlink to bring tokenized finance to Japan and the Asia-Pacific zone. The Japanese financial giant has so far partnered with Chainlink, Ripple, Circle and Startale to position itself ahead in the digital assets market.
Also read: SBI and Chainlink Team Up to Bring Tokenized Finance to Japan and Asia-Pacific
Meanwhile, Japan’s Finance Minister Katsunobu Kato signaled openness to fostering a suitable regulatory environment for crypto assets. Speaking at the WebX2025 conference in Tokyo, he stated that crypto “can also be part of diversified investments.” The event, Asia’s largest crypto and Web3 conference, gathered over 150 companies and global industry leaders.
Also read: WebX2025 Taps on Tokyo; Bringing Global Crypto and Web3 Leaders Together
On the equity front, White House National Economic Council (NEC) Director Kevin Hassett, in an interview with CNBC, raised the possibility that the U.S. government could take stakes in additional companies. This came after Intel showed readiness to give a 10% stake to the U.S. government.
Still, the U.S. equity benchmarks began Monday’s trading on a back foot, posting modest losses amid the market’s consolidation and downbeat Earnings Per Share (EPS) from the PDD Holdings Inc. Notably, cautious mood ahead of this week’s key earnings report, like Nvidia, Alibaba Group and Dell Technologies, might have also allowed the equity benchmarks to pare recent gains after a stellar run-up on Friday.
- Gold stays defensive, up 0.06% intraday to $3,373 at the latest.
- Bitcoin (BTC) drops over 1.0%, down for the third consecutive day to hit a six-week low, before bouncing off to $111K at the latest.
- Ethereum (ETH) slides more than 2.0%, around $4,665, as Doji candlestick near its record high raised fears of a technical correction in price.
- U.S. Dollar Index (DXY) rebounds, posting modest gains around 97.90 as we write.
- Wall Street benchmarks pare Friday’s heavy gains: U.S. equities consolidate Friday’s rally, with Dow Jones, S&P 500, and Nasdaq all printing minor intraday losses at the latest.
- WTI Crude Oil prints three-day winning streak, up 0.50% intraday to refresh weekly high near $63.90 by press time.
Risk catalysts eyed…
With most U.S. data already out and loud, also ignored due to the market’s positioning after Friday’s stellar moves, Traders will mainly focus on risk assets and related news ahead of Friday’s U.S. Core Personal Consumption Expenditures (PCE) Price Index, the Fed’s preferred inflation gauge. Strong U.S. data could raise inflation fears and challenge market expectations of two more Fed rate cuts after September’s 0.25% reduction, allowing the U.S. Dollar to recover and putting pressure on risk assets.
That said, despite a potentially slow Monday, this week promises busy trading, not too volatile like last week, but could give the USD a chance to pare earlier losses. This might exert downside pressure on the cryptocurrencies and equities, while Gold may edge higher.
