U.S. Stocks, Bitcoin and Gold Fall as Fed Dithers on Interest Rates, Investors in Limbo

The three major U.S. stock indexes (Dow Jones Industrial Average, Nasdaq Composite and S&P 500) experienced a downturn on Wednesday afternoon. This decline coincided with a rise in the yield on the 10-year Treasury note, which rose 0.98% to 4.102%. Meanwhile, the price of gold fell by one percentage point, and bitcoin also declined, dropping 1.02% relative to the U.S. dollar.

Dow Jones, Nasdaq and S&P 500 tumble as U.S. Treasury yields soar

Market sentiment remains cautious about the Fed’s 2024 strategy, with expectations growing for a possible rate cut in March. This outlook came after Fed Governor Christopher Waller spoke at the Brookings Institution in Washington, D.C. Waller acknowledged the possibility of a rate cut during the year, but emphasized that the Fed was in no hurry to initiate such a change. Kaspa mining

Waller said, “I don’t see a reason to act or cut as quickly as we have in the past.”

Things took a predictable turn for the worse, with the yield on the 10-year Treasury note rising 0.98 percent Wednesday after rising 4.4 percent over the past month. As of January 17, 2024, the long-term note has reached a level of 4.106%. Meanwhile, the yield on the 2-year Treasury note jumped 3.08%, but is still down 2.16% from last month. Currently, the market is leaning toward a 97.4% probability that the Fed will choose to raise interest rates at its meeting scheduled for January 31, 2024 .

U.S. 10-Year Treasury Yield as of January 17, 2024 | Source: TradingView

The CME Fedwatch tool shows a 52% probability that the central bank will lower the federal funds rate by March 2024 . The price of gold per ounce is currently $2,006 per unit, down 1.09% on the last day. The price of gold has fallen 0.66% over the past month, but has risen 1.86% over the past six months. bitcoin ( BTC ) fell 1.02% on January 17th, and the leading cryptocurrencies are down more than 7% over the past week. Nonetheless, six-month statistics show that the value of bitcoin has increased by 43 percent, outperforming the market for gold over the same period.Bitmain Miner

Despite Bitcoin’s poor performance on Wednesday, the global market capitalization of the crypto economy rose 0.49 percent to $1.69 trillion. The Dow Jones Industrial Average declined slightly by 0.25% on the day, while the Nasdaq Composite closed down 0.59%. In addition, the S&P 500 fell 0.56% and the Russell 2000 (RUT) closed down 0.73%. As usual, financial markets are going through a period of cautious sentiment, especially regarding the direction of the Federal Reserve’s monetary policy for 2024.

What are your thoughts on the current market conditions? Share your thoughts and opinions on this topic in the comments section below.