The US stocks received a heavy blow as Fed Chair, Jerome Powell maintained a hawkish attitude towards monetary policy and inflation. In fact, the past few years have been harsh for cryptocurrencies. There have been severe problems in the crypto market. Especially, Bitcoin has been the worst sufferer of all, with its value diminishing with each passing day. In fact, when we talk about the crypto market, we claim that it is more volatile than the stock market.
However, recently, the US stock market experienced more losses than the entire market cap of Bitcoin and altcoins combined. You might not believe this. But this is the real truth. In fact, inflation has been a major cause of concern in the US, recently. In such a situation, the comments of Jerome Powell become greatly important. In fact, following the comments by Powell, the investors rushed to cut risk. As a result, in a single session, US equities shed 1.25 trillion. If you wish to know more about this latest development in US stocks, then this article is the perfect stop for you. Keep reading the article to know more about the latest trend in US stocks.
Powell And His Comments
Recently certain data showed that inflation in the US is slowing down. Despite that, Jerome Powell hinted at the fact that larger rate hikes are yet to come. As a result of such comments from Powell, the investors hurriedly jumped to cancel out any risk factor. According to Powell, there is a need for “ a restrictive policy stance” for the time being, to restore price stability. In fact, he also stated that many past instances show the risk involved in “prematurely loosening policy”.
As a result of this, the US stocks have suffered great losses. In fact, S&P 500 hit the lowest level since July, closing down 3.4%. In addition, a similar move was also seen in the Nasdaq Composite Index as it lost 4%. Therefore, collectively the US stocks lost more value, as compared to the combined market cap of Bitcoin and altcoins. However, it is not that the crypto market did not receive any setbacks. It obviously dropped by 8.95%. In fact, the total crypto market cap came down to $936.87 billion from $1.029 trillion, at one point overnight.
However, many experts have suggested that in terms of future Fed policy, one should not consider the comments of Powell as essential points of concern. There are also people like Holger Zschaepitz, who claim that Powell’s speech has hit “all the hawkish notes”, thereby abandoning all “dovish ones”.
While we might see Powell’s speech as a red warning for US stocks, he also added that the increase in interest rate in September will depend on the “evolving outlook” and “the incoming data”. In fact, the crypto market too lost greatly. BTC/USD lost up to 8.8% at one point. In addition, Ether lost near about 14%. Therefore, the crypto market too has no time to rejoice. However, compared to the US stocks their losses are less.