Summary
- Market roundup for Wednesday portrays upbeat sentiment amid dovish Fed bias and easing trade, political fears.
- Bitcoin rises more than 1.0%, Gold prints two-day winning streak, while U.S. Dollar drops.
- Talks about Fed’s 0.50% rate cut, U.S. trade optimism, and Russia-Ukraine ceasefire favor risk-on mood.
- Absence of major data/events allows bulls to stretch previous moves with eyes on Jackson Hole Symposium.
Market Roundup for Wednesday: Risk-on Mood Prevails
Broader market sentiment improves on Wednesday, following an upbeat daily performance, as traders cheer hopes of lower rates from the U.S. Federal Reserve (Fed), along with positive developments surrounding the key trade and political conditions.
Bitcoin (BTC) jumps 1.5% intraday to $122K while the spot Gold (XAU) also rises for the second consecutive day, up 0.50% on a day to $3,365 by the press time of early Wednesday morning in New York. Further, the US Dollar Index (DXY) drops to a two-week low of 97.67, whereas the Wall Street benchmarks refreshed record highs.
Tuesday’s mixed U.S. inflation data bolstered calls for a consecutive three 0.25% rate cuts from the Fed, as per the latest readings from the CME’s FedWatch Tool. More importantly, US Treasury Secretary Scott Bessent said that there is a good chance of a 50 basis point (bp) rate cut for the Fed.
The same joined an absence of major data/events from the U.S. ahead of next week’s annual Jackson Hole Symposium event for the global central bankers, where Fed Chair Jerome Powell will also speak, to weigh on the U.S. Dollar.
Elsewhere, Richmond Fed President Thomas Barkin told the Wall Street Journal that inflation “won’t be as high as you think” and noted possible pressure on both inflation and unemployment. Meanwhile, Kansas City Fed President Jeffrey Schmid urged patience in adjusting the policy rate.
In geopolitics, the White House described the upcoming Donald Trump–Vladimir Putin meeting as a “listening exercise” for Trump and confirmed it will be one-on-one. Reports also suggested that Trump is considering a lawsuit against Federal Reserve Chair Jerome Powell.
On trade, Treasury Secretary Bessent said US–China talks will occur within three months, with tariffs staying in place until progress is made on fentanyl control.
It should be noted that an absence of Israel’s attack on Gaza, after unveiling a clear intention to occupy it fully, as well as no negative remarks from either Russia or Ukraine, also adds to the market’s positive mood.
Crypto universe and equities
An upbeat performance of major cryptocurrencies fuels the total crypto market capitalization to a record high of $4.14 trillion at press time, according to CoinGecko. The sharp rise reflects strong gains in Bitcoin and altcoins, signaling growing investor confidence fueled by pro-crypto U.S. policies and rising institutional accumulation of crypto reserves. It should be noted, however, that the Bitcoin Dominance slipped while the Altcoins gained more upside momentum.
Elsewhere, Belarusian President Alexander Lukashenko pushed the national central bank towards drafting steps to develop the Belarusian crypto market. The national leader addressed it as “very important” and focused on the potential of digital payments to help drive economic growth.
Also read: Belarus Crypto Market: President Lukashenko Orders Central Bank to Draft Digital Assets Policies
In the U.S., a group of bankers raised concerns about the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act, which was signed by U.S. President Donald Trump. The group comprising the Bank Policy Institute (BPI), the American Bankers Association, the Consumer Bankers Association, and others urged Congress in a letter to alter the GENIUS Act. The letter cited fears of a $6.6 trillion drain from the U.S. banks due to a loophole in the GENIUS Act.
Read Details: U.S. Bankers Warn GENIUS Act Loophole Could Drain $6.6 Trillion From Banks
Talking about equities, the increasing odds of the Federal Reserve’s (Fed) rate cuts allow the Wall Street benchmark to remain firmer for the second consecutive day. That said, the S&P 500 and Nasdaq reached record highs, ignoring the downbeat Earnings Per Share (EPS) from Circle Internet Group, Inc. (CRCL). In doing so, the equity benchmarks concentrated more on SEA Limited’s upbeat EPS and revenue announcements.
- Gold rises for the second straight day, up 0.50% intraday to $3,365 by the press time.
- Bitcoin (BTC) reverses pullback from a month’s high, up 1.5% on a day near $122K at the latest.
- Ethereum (ETH) renews multi-year high, jumps to its highest level since December 2021, up 1.5% to $4,660 as we write.
- U.S. Dollar Index (DXY) drops to a two-week low, down 0.30% intraday to 97.70.
- Wall Street Benchmarks Stay Firmer: Having refreshed record highs the previous day, Wall Street benchmarks trade positively during the initial hours, following a slightly upbeat performance of stocks in Asia and Europe.
- WTI Crude Oil hits a 10-week low, down 1.10% intraday to $62.40.
Qualitative Factors Take Center Stage…
Moving on, multiple second-tier Fed officials are scheduled to speak publicly and may infuse volatility into the market, considering the latest chatter about the 0.50% rate cut. Should the Fed commentary rule out any such moves, despite favoring three rate cuts during the rest of 2025, the U.S. Dollar may witness a corrective bounce from the multi-day low, challenging the riskier assets like cryptocurrencies, equities, and commodities.
Meanwhile, the weekly U.S. crude oil inventory data from the Energy Information Administration (EIA) could direct the energy prices after the industry survey showed a surprise build and drove WTI crude oil to a multi-day low.
Elsewhere, today’s quarterly earnings from Cisco Systems, Inc. and Thursday’s Alibaba Group Holdings, LTD. results will be crucial for the technology sector and the Nasdaq.
Above all, market players will keep an eye on the next week’s annual Jackson Hole Symposium event for the global central bankers and may extend the latest U.S. Dollar weakness, as well as firmer performance of Bitcoin (BTC), Gold (XAU), and equities.
Also read: Market Digest: Bitcoin Holds Near $119K as Soft CPI Data and Peace Talks Shape Sentiment
