Cryptocurrencies extend losses as rate hike threat tops, with Bitcoin dipping below $39,000

This article comes fromWall Street News, reproduced with permission.

This article comes from

Wall Street News

, reproduced with permission.

Original title: "The threat of interest rate hikes topped the S&P Dow's biggest drop in four weeks, the dollar's biggest gain in a year, and U.S. bond yields jumped"

The Fed signaled that interest rate hikes would come sooner than the Fed had previously expected. The shadow of tapering QE loomed again, U.S. stocks fell, and the U.S. dollar and U.S. bond yields jumped.

Before the Federal Reserve announced its monetary policy decision, the three major U.S. stock indexes fluctuated and fell. The S&P and the Dow turned down at the beginning of the session, led by the financial sector. The Nasdaq was supported by some leading technology stocks such as Apple. The market also turned down. The Federal Reserve announced after the meeting that it will keep the near-zero interest rate and the scale of QE bond purchases unchanged, but most officials expect to raise interest rates in 2023, and may raise interest rates at least twice by the end of 2023. No rate hikes are expected in 2023. Since then, the decline in U.S. stocks has expanded rapidly, and the U.S. dollar and U.S. bond yields have jumped.

Under the pressure of the rapid upward pressure on the U.S. dollar and U.S. bond yields, both gold and silver futures turned lower after hours, and the decline of cryptocurrencies led by Ethereum expanded, and Bitcoin fell below $39,000.

Among other commodities, U.S. EIA crude oil inventories fell by more than 7.3 million barrels month-on-month last week, a weekly decline that was almost three times the market’s expectations. Internationally turned down. Although Lun Copper, which suffered the biggest drop in eight months on Tuesday, rebounded, the gains were limited and failed to recover $10,000. Lunni, which also fell 4% like Lun Copper on Tuesday, continued to fall. According to Futures Daily, sources said that after the Dragon Boat Festival, the rumors that the State-owned Assets Supervision and Administration Commission will start to strictly investigate the overseas futures positions of state-owned enterprises are not entirely true, but some news is not groundless: Recently, the State-owned Assets Supervision and Administration Commission has asked state-owned enterprises to strictly manage financial derivatives business, control risks, and strictly abide by the rules Guarantee principle.

In Europe, the pan-European stock index, which closed before the end of the Federal Reserve meeting, was supported by a rebound in tourism stocks led by Tuesday's bucking the trend, hitting a record high for nine consecutive days. As the Spanish anti-monopoly regulator launched a banking investigation, the banking sector bucked the trend and led the decline, which dragged down the Spanish stock index and software giant SAP and dragged down the German stock index. The German stock market fell to a record high.

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The Dow closed down more than 200 points for the first time in four weeks, consumer staples and utilities led the decline, S&P Tesla bucked the trend and closed up $600

The three major U.S. stock indexes collectively opened higher, but the S&P 500 and the Dow Jones Industrial Average quickly turned down at the beginning of the session, and their losses expanded significantly at the end of the morning session. Before the Fed announced its decision, the S&P fell more than 0.2% at midday when it refreshed its daily low, and the Dow once fell more than 110 points. The Nasdaq Composite was up 0.4 percent at a fresh session high in early trading before turning lower early in the afternoon.

After the announcement of the Fed's decision, the three major indexes collectively refreshed their daily lows. The Dow once fell more than 380 points, the S&P once fell by 1%, and the Nasdaq once fell by 1.2%. During Powell's press conference, the Nasdaq once turned up in a short-term, the Dow's decline was once narrowed to less than 160 points, and the S&P smoothed most of the decline.

In the end, the three major indexes collectively closed down for two consecutive days. The Dow fell for three days in a row, closing down 265.66 points, or 0.77%, to 34033.67 points, the first closing drop of more than 200 points since May 18, a closing low since May 19. The S&P closed down 0.54% at 4223.70 points, the largest closing drop since May 18 and a new low since last Wednesday, June 9. The Nasdaq closed down 0.24% at 14039.68 points, the lowest closing level in the last four days.

The Russell 2000, a small-cap stock index dominated by value stocks, only turned up short-term at the end of the morning session. It fell 1% after the Fed meeting at noon, and finally closed down 0.23%. The tech-heavy Nasdaq 100 closed down 0.34%.

Leading technology stocks were mixed. Tesla turned down more than once during the session, but eventually closed up more than 0.9%, regaining $600, and fell below $600 for the first time in the last four days on Tuesday. Among the six FAANMG technology stocks, Amazon, which closed up 0.95%, performed the best. Apple rose nearly 1% in early trading, but turned down in midday trading, closing up nearly 0.4%, and Netflix, which turned up in late trading, closed up 0.1%; Facebook generally opened lower and moved lower, closing down nearly 1.7%. Alphabet, the parent company of Google, which turned lower more than once during the session, closed down more than 0.5%, and Microsoft, which turned lower in midday, closed down nearly 0.4%.

As gold fell below the $1,830 mark, gold stocks fell collectively, and the gold mining stock ETF fell more than 2%. Banking ETFs rose more than 1%, leading the rise among ETFs in various industries in the U.S. stock market. Along with the decline in U.S. bonds, utilities ETFs led the decline, down 1.4%.

In Europe, the pan-European stock index Europe Stoxx 600 Index rose for nine consecutive days and reached a record high on the nine-day average, refreshing the longest record high in history set on Tuesday. Among the various sectors, travel and leisure, which fell by more than 2% on Tuesday, led the decline by nearly 1.3%, and banks, which fell by more than 0.8%, led the decline. Spanish bank stocks Banco Sabadell and Caixabank both fell more than 3%, while Santander fell 2%. Among major European countries, German stocks and Western stocks were the only two to close lower on Wednesday.

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The U.S. dollar index rose above 91 for the first time in a month, Bitcoin fell below $40,000 and fell more than 5% at one point, Ethereum fell 7% intraday

The ICE U.S. Dollar Index (DXY), which tracks the exchange rate of a basket of six major U.S. currencies, fell below 90.45 in early trading to set a new daily low, down 0.1% in the day. U.S. stocks turned up before and in early trading, and turned up again before the announcement of the Fed’s decision , but the rise and fall are very small. After the announcement of the Fed's resolution, the U.S. dollar index jumped, and the U.S. stock market once rose above 91.28 in midday trading.

By the close of U.S. stocks on Wednesday, the U.S. dollar index was above 91.20, up nearly 0.8% on the day; the Bloomberg U.S. dollar spot index rose 0.8%, the largest increase in about a year. After hours, the dollar index rose further to 0.95%.

Bitcoin (BTC) fell below $40,000 in the European stock market, and continued to decline since then. At noon in the U.S. stock market, as the U.S. dollar index soared, it once fell below $38,400, refreshing the intraday low of this week. The high fell by more than 2,000 US dollars, and the percentage fell by more than 5%. When the US stock market closed, it was below 38,600 US dollars, and it fell by more than 2% in the last 24 hours.

Ethereum (ETH), the second-largest cryptocurrency in terms of market value after Bitcoin, fell below $2,400 in midday trading in the U.S. stock market, and the lowest fell below $2,380. Around 7%, the U.S. stock market closed slightly above $2,410, and fell 4% in 24 hours.

CoinMarketCap data shows that mainstream cryptocurrencies fell across the board on Wednesday. By the end of the U.S. stock market, ETH had the largest decline in the last 24 hours. Over 3%, the 11th largest, seventh largest, fifth largest and sixth largest cryptocurrencies Litecoin (LTC), Ripple (XRP), Cardano (ADA) and Dogecoin (DOGE) all fell by more than 2%.

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The 10-year U.S. bond yield hit the largest increase in three months, and the 2-year yield hit a new one-year high

The U.S. 10-year benchmark Treasury yield fell below 1.49% in early trading in European stocks. It was close to 1.48% and set a new daily low. It is still far from the intraday low since early March when it fell below 1.43% last Friday. It fell by about 1 basis point, and the U.S. stock market regained 1.49% in early trading. Before the announcement of the Fed’s decision, it was basically close to 1.49% but lower than the 1.49% level in midday trading.

The 2-year U.S. Treasury yield rose above 0.2% for the first time since last June.

The spread between 30-year and 5-year U.S. bond yields once expanded to more than 129.5 basis points, and the yield curve of 5-year and 30-year U.S. bonds fell to the lowest point this year.

Prices of European government bonds mostly rebounded on Wednesday, ending a two-day losing streak, while Greek government bond yields rose for two consecutive days. The UK 10-year benchmark government bond yield fell 1.9 basis points to 0.739% on the day; the German bund yield fell 1.8 basis points to -0.25% over the same period.

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Lun Copper fell out of the trough of more than seven weeks and failed to recover $10,000 in three days. Gold futures closed out of a one-month trough and fell 3% after the market.

Before the announcement of the Fed's decision, New York gold futures had ended their three-day losing streak as of the close. Gold futures for August delivery on COMEX closed up 0.3 percent at $1,861.40 an ounce, breaking out of Tuesday's lowest closing low for major contracts since May 14.

However, after the market closed, gold futures dived after the announcement of the Fed's decision, and quickly stopped rising and fell back, once falling below $1,810, with a drop of 3% after hours.

New York silver futures reversed their two-day losing streak by the close, and COMEX July silver futures closed up 0.4% at $27.81 an ounce, off Tuesday's low since June 3. However, silver also turned lower in the late hours, once approaching the $27 mark, and fell nearly 3% after the market.

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U.S. oil hit new highs for more than two and a half years in two days

Brent crude oil futures in August closed up US$0.40, or 0.54%, at US$74.39/barrel, a record high for the main contract since April 24, 2019, and a new high on Tuesday since April 25, 2019. The two days hit a new high since April 30, 2019, and last Thursday both hit a new high since May 16, 2019.

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