Summary
- Market roundup for Friday highlights downbeat sentiment, despite positive U.S. data, and amid mixed geopolitics, Fed concerns.
- Bitcoin renews weekly low, Gold hits monthly top, but U.S. Dollar drops for the fourth consecutive day.
- U.S. Core PCE Price Index matches market forecasts, allowing Fed to defend its cautiously hawkish bias for post-September meetings.
- Russia’s fresh attack on Kyiv, including the EU offices, renews geopolitical fears.
- Comments from U.S. Vice President J.D. Vance raise fears about Fed Independence, especially amid Trump-Cook legal drama.
- Cryptocurrency traders fail to cheer pro-industry news, softer Greenback amid the market’s month-end consolidation.
Market Roundup for Friday: Fresh fears emerge
Financial market players remain downbeat early Friday as upbeat U.S. inflation and activity numbers jostle with fresh geopolitical fears, Federal Reserve (Fed) woes, and trade deal worries test the earlier optimism.
With mostly positive U.S. economic data during this week, including strong growth, lower jobless claims, and manageable inflation, market fears eased. However, concerns over the Federal Reserve’s independence, the Fed’s rate cuts past September, the Russia-Ukraine war, and mixed U.S. corporate earnings tempered investor optimism.
Talking about the data, the U.S. Core Personal Consumption Expenditure (PCE) Price Index for July, the Fed’s preferred inflation gauge, matched 0.3% Month-over-Month (MoM) and 2.9% Year-over-Year (YoY) market forecasts, versus 0.3% and 2.8% respectively, previous readings.
On the same line, the headline PCE Price Index also proved right the market consensus of 0.2% MoM and 2.6% YoY outcomes for July, compared to 0.3% monthly and the 2.6% yearly figures for the previous month.
Meanwhile, Personal Spending, Personal Income, and Wholesale Inventories all improved for July, but the Goods Trade Balance showed a wider trade deficit.
Alternatively, the Chicago PMI for August dropped to 41.5 from 47.1 prior readings, versus 46.00 expected.
Overall, the majority of the scheduled data matched the market’s slightly upbeat forecasts but failed to justify the U.S. Dollar Index (DXY) weakness. However, the Bitcoin (BTC) and equities remain pressured, while Gold buyers pierce the key $3,425 resistance at a five-week high, close to $3,440 at the latest.
Elsewhere, fears surrounding the Fed’s independence grew as U.S. Vice President James David “J.D.” Vance suggested the end of the Federal Reserve’s independence in an interview with USA Today, stating elected officials—not unelected bureaucrats—should influence monetary policy. Separately, Federal Reserve Governor Lisa Cook filed a lawsuit against President Donald Trump over his attempt to remove her from office without legal cause. Her lawyer said a clerical error may have caused the mortgage dispute.
On the geopolitical front, Russia launched one of its most intense attacks on Ukraine this year, deploying 598 drones and 31 missiles overnight, according to the Ukrainian Air Force. Targets included the European Union (EU) Mission and British Council offices in Kyiv. No casualties were reported among EU or UK personnel.
European Commission President Ursula von der Leyen strongly demanded Russian President Vladimir Putin’s presence at the negotiation table. However, German Chancellor Friedrich Merz said that there will be no meeting between Putin and Ukrainian President Volodymyr Zelenskyy, raising war fears.
Elsewhere, Iran’s Foreign Minister Hossein Amir-Abdollahian complained to the European Union (EU) that France, Germany, and the United Kingdom lack the legal basis to trigger automatic sanctions on Tehran.
Crypto, Equity Update
n the crypto universe, most coins are downbeat amid a firmer U.S. Dollar and the market’s cautious mood due to mixed trade/political news, ignoring the pro-industry news. Let’s talk about the major news that grabbed the markets’ attention:
The U.S. Commodity Futures Trading Commission (CFTC) opened the door for the offshore crypto exchanges as Foreign Boards of Trade (FBOTs). This might open a huge money flow for the global crypto platforms that couldn’t previously entertain U.S. customers.
Also read: Offshore Crypto Exchanges are Now Welcome for U.S. Traders per CFTC Advisory
Elsewhere, the U.S. Commerce Department partners with the Pyth Network to publish GDP data on the blockchain, which propelled the PYTH price by around 99% the previous day.
Read Details: Pyth Network Selected to Distribute U.S. Economic Data On-Chain; Token Surges 60%
Further, Tether, issuer of the largest stablecoin USDT, announced plans to launch USDT on RGB, a new protocol enabling digital assets on the Bitcoin network, in a move to integrate stablecoins into Bitcoin’s core infrastructure. This will allow users to send and receive USDT alongside Bitcoin in the same wallet, without needing separate blockchains.
Read more: Tether Brings USDT to RGB, Making Bitcoin a Stablecoin Platform
On a different page, doubts surrounding Canadian company Luxxfolio’s sustainability for $73 million Litecoin treasury plan pushed the shares downwards, suggesting that only having a crypto treasury isn’t enough to boost investor confidence.
Also read: Luxxfolio Share Falls 3% amid $73 Million Litecoin Treasury Startegy Plan
Notably, chatter surrounding the real Satoshi Nakamoto regained life after Hal Finney’s old photo sparked excitement over the Bitcoin creator.
Also read: The Real Satoshi Nakamoto? Hal Finney’s Old Photo Sparks Excitement Over Bitcoin’s Creator
Talking about equities, all three U.S. benchmark equity indexes are down on Friday, ignoring the previous day’s modestly positive performance. That said, Nasdaq is falling over 1.00%, S&P 500 down 0.80%, and Dow Jones marking a modest 0.50% intraday loss by press time.
The U.S. shares’ weakness could be linked to a revenue forecast miss from the Ali Baba Group Holdings Ltd. in its quarterly earnings results. Also, fears surrounding Nvidia and statements from Caterpillar also exert downside pressure on the equities, especially after the recently firmer U.S. data pushed back the dovish Fed bias.
On Thursday, Dell Technologies Inc. exceeded estimates on revenue and adjusted earnings and raised its full-year forecast in its quarterly earnings. However, disappointing third-quarter profit guidance caused a 4% after-hours drop in its stock during the after-market trading.
Further, Caterpillar Inc. raised its expected full-year tariff impact to $1.5–1.8 billion, including $500–600 million in Q3 alone, though it kept its overall sales forecast unchanged.
Despite mixed earnings, both the S&P 500 Index and the NASDAQ Composite Index closed at record highs the previous day, while the Dow Jones remained nearly eight points away from its all-time high (ATH).
- Gold renews monthly top, up for the fourth consecutive day to $3,440 as we write.
- Bitcoin (BTC) refreshes weekly bottom, drops over 3.0% intraday near $108,600.
- Ethereum (ETH) slides 4.5%, hitting a weekly low around $4,300 by press time.
- U.S. Dollar Index (DXY) prints a four-day losing streak, down 0.10% intraday near 97.80 at the latest.
- Wall Street benchmarks remain pressured: U.S. equities not only reverse Thursday’s modest gains but drop more, with Nasdaq falling over 1.0%, S&P 500 down 0.80% and Dow Jones marking 0.50% intraday loss at the latest.
- WTI Crude Oil snaps two-day winning streak, down 0.50% intraday to $64.00 as we write.
A volatile day ahead…
Even if most of the scheduled U.S. data are out and loud, the market’s reaction to the latest geopolitical tensions and the Fed’s independence concerns, as well as the rate cut woes, could keep the traders on their toes. Also likely to entertain the momentum traders could be one last efforts to consolidate the monthly moves before the long weekend comprising the official China PMI for August and Monday’s Labor Market holiday in the U.S.
