Q2 season begins with negative outlook: US bond yields surge, probability of rate cut in June declines, Bitcoin falls to 64K
The Dow Jones Industrial Average experienced another decline today (4/2), and Wall Street has entered a slump in the new quarter. According to CNBC, the main reason for this is the rise in US Treasury bond yields, with the 10-year bond yield reaching its highest level since November 28, 2020. Oil prices have also reached a five-month high, exacerbating inflationary pressures. Additionally, hopes of a rate cut by the Federal Reserve in June have diminished, leading to a two-day decline in the Dow Jones Industrial Average.
On the other hand, the cryptocurrency market has also been severely affected, with Bitcoin falling more than 7% and Ethereum falling more than 9%.
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US manufacturing recovery affects rate cut expectations, Bitcoin briefly drops to 68K
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Rising bond yields and inflation concerns impact the market
Tech stocks hit, Tesla Q1 delivery rate down 8.5% from last year
Remaining optimistic?
The start of Q2 has encountered turbulence, primarily due to persistently high inflation data and some unexpected strong economic data. These factors have collectively pushed up bond yields and reduced the possibility of future rate cuts by the Federal Reserve.
Tech companies have felt significant selling pressure. Tesla’s stock fell by 5.5% as its first-quarter delivery volume fell short of expectations. Other tech giants such as Nvidia, Alphabet, and Microsoft also recorded approximately 1% declines.
Despite recent setbacks in the market, some analysts remain optimistic. They view the selling pressure as a “natural digestion” period after rapid stock price increases. They see potential in the market, especially in sectors outside of technology such as energy.
As Q2 progresses, the focus remains on whether the Federal Reserve will decide to maintain its current rate stance and whether the momentum can be sustained into early 2024. Investors and traders are readjusting their strategies to adapt to evolving economic conditions, particularly paying attention to inflation, oil prices, and the next steps taken by central banks.
Bond yields
Bitcoin
US Treasury bonds
US stocks
Further Reading
US stocks reach new highs, Bitcoin bounces back from the bottom, surpassing the 43K resistance line
Bitcoin falls to 41K, down 15% since ETF listing, support seen at 38K
