New York – Wall Street experienced a decline on Monday as investors awaited crucial inflation data and reevaluated Federal Reserve policies. This shift in sentiment was further fueled by rising trade tensions and worries about inflation, leading to a decrease in prices for both cryptocurrencies like Bitcoin and Ethereum, as well as traditional equities.
Major stock indexes, including the S&P 500, Nasdaq-100, and Dow Jones Industrial Average, all saw losses as traders opted to wait on the sidelines prior to the release of the inflation report later in the week. Futures for Asian markets like the Nikkei 225 and Hang Seng indicated the likelihood of further declines, reflecting ongoing stress in global markets.
The crypto market followed suit, with Bitcoin dropping 5.8% and Ethereum falling 11.5% over 24 hours, according to CoinGecko data. Both digital assets have experienced significant declines over the past month, exacerbating concerns about the overall market sentiment.
Amidst this backdrop, President Donald Trump is reportedly planning to reverse anti-crypto banking policies put in place during the previous administration through an upcoming executive order. This move is expected to address controversial banking restrictions such as “Operation Chokepoint 2.0” and may also touch on stablecoin classification and Federal Reserve banking policies, aligning with Trump’s pro-crypto stance.
Investors are now focused on the upcoming Consumer Price Index (CPI) report scheduled for Wednesday, which is anticipated to show a moderate rise in February prices. Any unexpected increase could reinforce expectations of delayed rate cuts by the Fed, which could have further implications for both equities and cryptocurrencies in the coming days.
Analysts are closely monitoring liquidity trends, with some pointing to the potential benefits for risk assets in the near future. Despite broader concerns about inflation and fiscal constraints, shifting conditions in liquidity could pave the way for future rate cuts and the end of quantitative tightening, especially as efforts to stimulate the economy ahead of the U.S. midterms gather steam.
While markets grapple with trade tensions and inflation data, the narrative surrounding digital assets may diverge from broader market trends given the push for pro-crypto policies and changing liquidity dynamics. This uncertainty underscores the volatility in both traditional and alternative markets, prompting investors to stay vigilant in the face of evolving economic landscapes.
