Speculative Stocks Unwind as Fed Doubts Trigger Market Rout – US Market Wrap

Volatility returned to Wall Street in a session that saw tech stocks and cryptocurrencies plummet as speculative sectors of the market unwind, just as concerns rise about the Federal Reserve’s ability to decrease interest rates.

Thursday was a day when retail momentum traders’ favourite assets, including cryptocurrency and artificial intelligence, suffered the worst losses. Following an almost 2% rise, the S&P 500 fell 1.6%. Nvidia fell 3% as concerns about valuations and large investments persisted despite an encouraging outlook. Bitcoin fell to below $87,000 for the first time since April.

Meanwhile, investors were uncertain about the Fed’s policy easing options following a mixed – and stale – jobs report. That’s not to mention the constant stream of Fed speakers expressing concern about further rate reduction.

To be honest, bond traders somewhat increased their wagers that the Fed will decrease borrowing costs following the data. However, the probabilities remain modest. Treasury two-year rates fell four basis points, to 3.55%. The dollar remained at a six-month high.

The Nasdaq 100 declined 2.4%. Nvidia erased a more than 5% gain. The VIX, Wall Street’s carefully followed index of stock volatility, surpassed 26. The increased volatility occurred immediately before the expiration of an estimated $3.1 trillion in notional options on Friday.