Markets
A warning of an imminent stock market ‘correction’ suddenly flashed red — just as the S&P 500, Nasdaq and Dow hit all-time highs
Stock markets are on the rise after Federal Reserve Chairman Jerome Powell fanned the flames of interest rate cut hopes in September.right after issuing a “critical” warning.
The S&P 500 and Nasdaq hit new all-time highs, following in the footsteps of the Dow, which peaked in May. despite new debt spiral fears unsettling traders.
Now, as uncertainty looms over the White Housean analyst highlighted a surprise warning in the stock market, as if it was just starting to flash red.
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Federal Reserve Chairman Jerome Powell helped boost stock markets, with the S&P 500, the … [+] Nasdaq and Dow Jones hit new all-time highs.
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The recent rout in bitcoin and cryptocurrencies, which has wiped $500 billion from the market combined in just over a month, could be about to trigger “an imminent summer correction for the S&P 500,” said Barry Bannister, managing director and chief equity strategist at Stifel. counted Market observation.
Bannister highlighted bitcoin’s correlation with stock markets, and specifically the tech-heavy Nasdaq, in recent years.
“It’s the availability of cheap liquidity from the Fed that drives the price of bitcoin,” Bannister said. “Every dovish pivot over the past 13 years has marked a sharp rise in bitcoin, and bitcoin is a non-interest-bearing asset that thrives on lower interest rates and available liquidity” — much like stock markets.
In his second day of testimony before Congress this week, Fed Chairman Powell said he had “some confidence” that inflation was falling but was not ready to declare the war on inflation won.
“Bitcoin has been a good leading indicator for the Nasdaq-100 over the years,” Jonathan Krinsky, chief market technician at BTIG, wrote in a note ahead of the S&P 500, Nasdaq and Dow rally this week.
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The price of bitcoin has fallen sharply in recent weeks, fueling fears that stock markets could follow suit… [+] lower, even as the S&P 500, Nasdaq and Dow hit all-time highs.
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For now, the momentum is in stocks as investors continue to bet on interest rate cuts from the Federal Reserve.
“Growing confidence in U.S. rate cuts kept the mood upbeat and gains broad-based,” Dan Coatsworth, investment analyst at brokerage AJ Bell, said in emailed comments.