Dow slides 165 points in turbulent trading investors digest mounting inflation and Fed minutes

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  • US stocks finished lower in turbulent trading as investors digested the Federal Reserve’s April meeting minutes and continued to warily eye inflation.
  • Some Fed officials signaled they would be open “at some point” to begin discussing a plan for adjusting the pace of asset purchases.
  • Bitcoin fell as low as $30,000 per coin on the day before staging a rebound, while ethereum dropped to under $2,500 before paring losses.
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US stocks closed in the red Wednesday, though pared deep earlier losses, as investors digested minutes from the Federal Reserve’s April meeting and continued to warily eye inflation.

The minutes showed central bank officials were cautiously optimistic about the US recovery. Some officials signaled they would be open “at some point” to begin discussing a plan for adjusting the pace of asset purchases.

Here’s where US indexes stood at the 4 p.m. ET close on Wednesday:

Read more: Buy these 20 infrastructure stocks set to crush the market as Congress prepares a multi-trillion-dollar deal, Raymond James says

Jefferies’ Aneta Markowska said the signal about the plan to start adjusting purchases came as a surprise.

“It sounds like the Committee inadvertently started talking about, talking about, talking about tapering. Now, before we get ahead of ourselves, the suggestion was only voiced by ‘a number of participants’, and it was conditional on ‘continued rapid progress,'” she said, saying this will not change the timeline for tapering which will be signaled more formally in late August.

She added: “But, it is certainly a change from what we’ve heard so far, and something that Powell did not convey during the press conference. At the very least, it suggests that Kaplan is not the only Fed official getting antsy about the current policy stance,” she added.

Cryptocurrencies whipsawed throughout the day. Bitcoin has fallen to as low as $30,681 and climbed as high as $43,609 within the last 24 hours. The world’s largest cryptocurrency currently is hovering around $38,000. Other cryptocurrencies held on to double-digit percentage losses. Cryptocurrency-linked stocks like Coinbase and Riot Blockchain also fell.

Amid the crypto carnage, some investors remained bullish. Cathie Wood reiterated Ark Invest’s view that bitcoin will climb to $500,000 over the long term in a Bloomberg interview. Meanwhile Microstrategy’s Michael Saylor tweeted: “I’m not selling,” in a reference to bitcoin.

Lumber prices fell for an eighth straight day on Wednesday, deepening a roughly 30% pullback in the commodity.

West Texas Intermediate crude fell as much as 5.4%, to $61.95 per barrel. Brent crude, oil’s international benchmark, slid 5%, to $65.30 per barrel, at intraday lows.

Gold climbed as much as 1.1%, to $1,890.13 per ounce.

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The crypto market has lost 23% of its value in just the last 5 days

BTC vs. ETH 4
  • The market capitalization of global cryptocurrencies has dropped by 23% in just the last five days, according to data on CoinMarketCap.
  • The Bitcoin has fallen roughly 35% since hitting all-time high in mid-April as comments.
  • Tesla CEO Elon Musk has been responsible for recent swings in the cryptocurrency as he laments the amount of energy used to mine.
  • See more stories on Insider’s business page.

The value of the cryptocurrency market has slid by 23% in just the last five days. It’s been pulled lower by a sell-off in bitcoin most recently catalyzed by comments made by Tesla CEO Elon Musk.

The market cap for global digital currencies came in at $1.97 trillion on Monday, down from a recent peak of $2.56 trillion on May 12, according to data from CoinMarketCap.com.

“The crypto world is in the danger zone … as no one has a handle over short-term momentum because of uncertainty on where Elon Musk stands on bitcoin,” Edward Moya, a senior market analyst at Oanda, wrote in a note to Insider on Monday.

Bitcoin on Monday fell below $43,000 to its lowest point since February while other crypto prices suffered as well. Ether, the token of the Ethereum blockchain, was down nearly 8%, Cardano-ADA sank 10%, and Binance Coin fell about 9%. Dogecoin gave up 7%.

Solana was the only one of the 20 largest cryptocurrencies by market cap to gain ground Monday, up about 0.2%, according to CoinGecko.

Bitcoin dropped Monday after Musk on Twitter suggested Tesla might – or had sold – its holdings in the cryptocurrency. It slightly rebounded after Musk clarified that the electric vehicle maker still held its bitcoin stake. Bitcoin’s recent selloff was sparked after Musk last week said Tesla would stop taking bitcoin as payment because of the “insane” amount of energy needed to create new coins and secure the network.

“It seems unlikely that a massive financial institution will make a big bet on crypto in this current market as environmental concerns come to the surface,” said Moya.

Musk later suggested that Dogecoin may be a payment option for Tesla as he’s working with Dogecoin developers to improve system transaction efficiency.

Read more: ‘Wolf of All Streets’ crypto trader Scott Melker breaks down his strategy for making money using ‘HODLing’ and 100-times trade opportunities – and shares 5 under-the-radar tokens he thinks could explode

“Everyone has been watching BTC fall, crashing 35% from all-time highs, just within a month,” said Justin Chuh, senior trader manager Wave Financial, a regulated digital asset investment firm, in a note. “Remember gravity and volatility? They exist. Some of the new crypto market entrants are about to have their first taste of risk

He continued: “A pullback was bound to happen. But we have to accept that those voices chirping around on social media aren’t helping and can actually make moves. This is healthy, but I think we all wish this didn’t happen.”

Broad risk aversion that hit US stocks on Monday didn’t aid the cryptocurrency market, said Moya, and “retail traders on social media platforms TikTok and Twitter are losing confidence and are getting closer to hitting the panic button.”

Read the original article on Business Insider