The three major U.S. stock indices (Dow Jones Industrial Average, Nasdaq Composite and S&P 500) experienced a downturn on Wednesday afternoon. The decline coincided with a rise in the 10-year Treasury yield, which rose 0.98% to 4.102%. At the same time, gold prices fell by one percentage point, and Bitcoin also fell, falling 1.02% against the U.S. dollar.
Dow, Nasdaq and S&P 500 plunge as Treasury yields surge
Market sentiment remains cautious about the Fed's 2024 strategy, with expectations growing for a possible rate cut in March. The outlook came after Fed Governor Christopher Waller spoke at the Brookings Institution in Washington. Waller acknowledged the possibility of a rate cut this year but stressed that the Fed is in no rush to initiate the change.
“I don’t see a reason to move as quickly or cut as much as we have in the past,” Waller said.
Things took a predictable turn, with the 10-year Treasury yield rising 0.98% on Wednesday after rising 4.4% over the past month. As of January 17, 2024, the long-term note has reached a level of 4.106%. Meanwhile, the 2-year Treasury yield rose sharply by 3.08%, but is still down 2.16% from the previous month. Currently, the market is leaning towards a 97.4% probability that the Fed will choose to raise interest rates at its meeting scheduled for January 31, 2024.
The CME Fedwatch tool shows a 52% chance that the central bank will lower the federal funds rate by March 2024. Currently, the price of gold per ounce is $2,006 per unit, down 1.09% in the last day. In the past month, the price of gold has fallen by 0.66%, but it has risen by 1.86% in the past six months. On January 17, Bitcoin (BTC) fell by 1.02%, and in the past week, the leading cryptocurrency fell by more than 7%. Despite this, the six-month statistics show that Bitcoin's value has increased by 43%, outperforming the market performance of gold in the same period.
Despite Bitcoin's poor performance on Wednesday, the global market capitalization of the crypto economy rose by 0.49% to $1.69 trillion. The Dow Jones Industrial Average fell slightly by 0.25% on the day, while the Nasdaq Composite closed down 0.59%. In addition, the S&P 500 fell by 0.56% and the Russell 2000 (RUT) closed down 0.73%. As usual, financial markets are experiencing a period of cautious sentiment, especially with regard to the direction of the Federal Reserve's monetary policy in 2024. #美联储 #降息
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