FINANCIAL NEWS!

Markets fall again. Oil rises, yields above 5% and crypto took a hit 📉

Good morning investors! ☕ Yesterday on Wall Street was not exactly calm. Stocks continued to decline, the yield on 10-year US Treasuries climbed above 5%, and more expensive oil reminded investors once again of the inflation problem.

And to top it off, the US Senate failed to advance an important cryptocurrency bill. Bitcoin and crypto-related stocks plunged.

Here's everything important in a few minutes. 👇

📉 Wall Street continues to slide

All major US indices ended Tuesday in the red:

📉 S&P 500: −0.4%

📉 Nasdaq: −0.8%

📉 Dow Jones: −0.6%

📉 Russell 2000: −0.8%

And it wasn't a problem of one or two large companies. On the Nasdaq, there were roughly 2.3 declining stocks for every advancing one.

Why did the market fall?

One of the main issues was again bonds.

The yield on the 10-year US Treasury note exceeded 5% during the day. That's not exactly an ideal combination for stocks, especially for more expensive growth companies.

The higher the yields on safer bonds, the more competition they represent for stocks. At the same time, higher interest rates make corporate financing more expensive and reduce the present value of their expected future earnings.

And technology stocks felt it the most.

🛢️ Oil adds fuel to the fire

Another problem was oil.

Tensions in the Middle East and attacks on energy infrastructure in Saudi Arabia sent oil prices higher. As a result, the S&P 500 energy sector actually added about 2.3% yesterday.

Why do we care?

Higher oil prices → more expensive energy and transportation → potentially greater inflationary pressures → another reason for the Fed to keep monetary policy tight.

And the Fed is a huge topic right now. Investors are waiting for its decision on rates today.

₿ Crypto got a solid slap

One of the biggest events of yesterday came from the US Senate.

Senators failed to get the necessary support to advance the Clarity Act, which was meant to create more comprehensive rules for the US crypto market. 60 votes were needed to proceed.

The reaction?

🪙 Bitcoin: roughly −4.6% during late Tuesday trading

🔴 Coinbase: −10.1%

🔴 Strategy: −5.4%

🤖 And what about AI?

Interestingly, even on a bad day, not everything around AI was red.

Some chip companies bounced back after the previous sell-off. Nvidia rose over 1% during part of Tuesday's trading, even as the broader market fell.

This is exactly the area I will continue to watch. AI stocks today are sensitive not only to the companies' own results, but also to bond yields and investor concerns about the pace of future investments in AI infrastructure.

👀 What to watch today?

Clearly the Fed.

The market enters its decision in an uncomfortable situation: high bond yields, expensive oil, inflation risks, and several weaker days in the stock market.

The rate decision itself, and especially the central bank's commentary, may determine the market's next short-term direction.

📉 S&P 500 −0.4%, Nasdaq −0.8%

📈 10-year Treasury yield exceeded 5%

🛢️ Oil rises, increasing inflation worries

₿ Bitcoin fell and Coinbase dropped over 10% 🇺🇸 Clarity Act failed key vote

🏦 Today the Fed will be the main topic

And now grab your coffee and let's see what the market has in store for us again. ☕📈

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