On Wednesday, stock markets showed resilience with notable gains, while ‘store of value’ assets like Bitcoin (BTC) and gold experienced downward pressure. This shift came after the release of the Federal Reserve’s minutes from their September meeting, which revealed mixed sentiments among officials regarding the recent interest rate cut.
The minutes indicated that a “substantial majority” of Fed officials supported a larger interest rate cut, but several expressed reservations, favoring a more conservative 25 basis point reduction instead of the 50 basis points that was ultimately approved. This revelation led market participants to adjust their expectations for a potential rate cut in November, with the CME FedWatch Tool now estimating a 19% chance of no cut, up from 15% the previous day and 0% last week.
Analysts from Secure Digital Markets noted a surge in the MOVE index—tracking anticipated volatility in U.S. Treasuries—which reached its highest level since January. This increase signals a tightening of financial conditions and a rise in risk aversion, potentially impacting riskier assets, including stocks and Bitcoin.
While Bitcoin faced selling pressure, stock indices opened positively and maintained their gains throughout the day. By the close, the S&P 500, Dow Jones Industrial Average, and Nasdaq composite rose by 0.71%, 1.03%, and 0.60%, respectively. In contrast, Bitcoin traded near the support level of $62,000 for much of the day but ultimately fell to lower support, closing at $61,042, a decrease of 1.96%. Spot gold also slipped, trading down 0.52% at $2,607.50 per ounce.
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