The Fed stood pat last night, leaving interest rates at 3.75% to 4%. The vote was 10–2, with both dissenters favoring a rate hike. Markets initially breathed a sigh of relief, and Bitcoin briefly surged to $81,700. But when Asian markets opened today, the mood shifted again.

Samsung posted record earnings, yet its shares still fell 4%. Google dropped nearly 10% after hours, and tech stocks were the first to flinch. As risk sentiment cooled, Bitcoin slid back, briefly dipping below $80,000 to a low of $79,600. At the time of writing this evening, it had recovered to around $80,100, down about 1.4% over 24 hours. Ether was much the same, hovering around $2,320, down about 1.7%. The Fear and Greed Index is at 51, still in neutral territory—not fearful, but not greedy either.

Interestingly, prices and capital are moving in opposite directions. U.S. spot Bitcoin ETFs saw net inflows of $137 million yesterday, their third straight day of inflows, bringing the three-day total to $424 million. Virtually all of that came from BlackRock alone: $136 million. Ether ETFs, by contrast, saw outflows of around $21 million. Prices are falling, but institutions are still buying. This kind of divergence usually doesn’t last long—sooner or later, one side has to be wrong.

U.S. stocks all closed higher last night: the S&P 500 rose 0.28% to 7,744, the Nasdaq gained 0.27% to 26,550, and the Dow added 0.19% to 52,475. The real divergence came after hours. Microsoft’s cloud business, Azure, reported its revenue in dollars for the first time: $33.17 billion, up 48%, and the stock rose about 3%. Google Cloud brought in $30.7 billion, more than doubling, but earnings per share of $2.12 fell short of expectations, free cash flow was still negative $9.1 billion, and the stock fell nearly 10%. Put simply, the market only rewards the company that can actually deliver cash.

Markets were just as divided before the opening bell today. Eli Lilly reported revenue of $24.4 billion, up 39%; weight-loss drug Mounjaro brought in $10.7 billion, and the stock rose nearly 5% premarket. Merck reported revenue of $18.1 billion and adjusted earnings per share of $2.49, beating expectations on both; its shares rose nearly 3% premarket. Caterpillar’s revenue rose 17% to $20.7 billion, with earnings per share of $7.20, but it didn’t raise its full-year outlook, and the stock fell nearly 10% premarket. Beating expectations doesn’t guarantee a stock will rise—the key is how much good news the market had already priced in.

Asia was mixed today as well: Japan’s Nikkei rose about 1%, South Korea’s KOSPI fell about 1%, and the Hang Seng dropped around 0.4%. In futures trading, Nasdaq futures fell about 1%, S&P 500 futures slipped around 0.3%, while Dow futures edged higher. Tech stocks are likely to come under pressure first when markets open tonight.

The takeaway in a nutshell: the market narrative has shifted from “Will they cut rates?” to “Could they raise them?” Market pricing for a December rate hike has climbed above 80%, and the 10-year U.S. Treasury yield is back at 5.04%. That’s the root of today’s across-the-board jitters; the divergence in gains and losses is just the surface.

What to watch tomorrow: U.S. third-quarter GDP and September PCE at 20:30 tonight. GDP is expected to come in at an annualized 3.0% to 3.2%, with core PCE at 3.1% year over year. I’ll go over the results tomorrow morning. The European Central Bank announces its decision at 21:15, with rates expected to hold at 2.50%. Amazon, Intel, Coinbase, and Starbucks report after the market close. The Bank of Japan also announces its decision tomorrow and is expected to hold steady.

Until the data is out, don’t let your positions speak for the market.

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