🔥Today was a strange and historic day in the US stock market after the CPI data was released with very good results.
📊 Event Details:
- The Russell 2000 index (small capitalization stocks) increased more than 3% while the S&P 500 index (large capitalization stocks) fell, this is the second day since 1979 this phenomenon has occurred.
- The Nasdaq Composite Index (mostly technology stocks) finished negative, creating a gap of more than 5% over the Russell 2000. This was the largest daily gap in history, the only other time that the gap This excess of 5% was in November 2020, shortly after Pfizer shared positive results from its Covid-19 vaccine trial.
🔍 Why Does This Happen?
- Investors initially feared a recession as the Fed prepared to cut interest rates. But after the market closed, data showed the opposite: investors were taking on more risk by shifting from large-cap tech stocks to mid- and small-cap stocks, as well as real estate.
- The stocks in the Magnificent Seven group (Tesla, Amazon, Alphabet, Microsoft, Meta, Nvidia and Apple) all fell today.
- US government bond yields are falling, meaning US government bond prices are rising, indicating investors believe the FED will cut interest rates soon in September.
💡 What It Means for Crypto:
- Crypto is often considered a high-risk investment for many traditional investors. As investors accept more risk, more money will flow into the crypto market.
- Despite an initial surge following the CPI data, the crypto market has since reversed and Bitcoin and the entire crypto market are little changed from yesterday. The market is facing selling pressure from MT Gox and the German government, along with fear still high in the market.
- As Bitcoin price rebounds, selling pressure will attract more sellers until this pressure is exhausted.
🌐 Regular Updates:
- Stay tuned for more latest news on stock market and crypto!
#StockMarket#CPI#CryptoNews#Bitcoin#FED#Russell2000#Nasdaq #SP500
