Wall Street closed mixed as the cryptocurrency world braces for the Bitcoin "halving" event
U.S. stock indexes closed mixed as investors digested corporate earnings, Federal Reserve Chair Jerome Powell's remarks, and economic data.
Powell's suggestion that rate cuts are unlikely in the near future has sparked speculation about whether the central bank will cut rates this year.
Market pricing for rate cuts has seen volatility lately, with traders and investors considering a potential cut in September and uncertainty about a second cut, possibly in December.
There have even been discussions about a single rate cut in November.
Thursday's comments from Fed officials underscored their reluctance to lower rates promptly.
New York Federal Reserve President John Williams emphasized the robust economy, while Atlanta Federal Reserve President Raphael Bostic expressed patience, noting slower-than-expected inflation returning to the Fed's 2% target.
Meanwhile, in other markets, Bitcoin is about to undergo a one-in-every-four-year event in which the digital token’s new supply is essentially cut in half.
Meanwhile, on Wall Street, preliminary data shows that at the close of the New York Stock Exchange (NYSE), the Dow Jones Industrial Average rose by +23.87 points, or +0.06%, to 37,777.18.
The broad-based Standard & Poor's 500 Index fell by -12.02 points, or -0.24%, to close at 5,010.19, while the tech-heavy Nasdaq Composite Index fell by -82.35 points, or -0.52%, to 15,601.02.
Among the "Magnificent Seven," Alphabet rose by +0.4%, Amazon dropped by -1.2%, Meta increased by +1.5%, Tesla fell by -3.6%, Microsoft declined by -1.8%, Apple decreased by -0.6%, and Nvidia gained by +0.8%.
After the closing bell, Netflix dropped -2.54% in extended trading following the release of its quarterly results.
Earnings season saw Genuine Parts surge +11.22% on raised profit forecasts, while Las Vegas Sands dropped -8.66% despite beating expectations, with brokerages citing Macau's weakness.
Alaska Air, which faced a midflight blowout of a door plug on a Boeing aircraft in January, climbed +4% after projecting higher profits for the current quarter than analysts anticipated.
Ibotta, a Walmart-backed digital company offering cash-back rewards on grocery brands, soared +17.3% on its first day of trading.
Economic data shows that the number of Americans filing new claims for unemployment benefits held steady at a low-level last week, indicating continued labour market strength.
According to the U.S. Labour Department, initial claims for state unemployment benefits remained unchanged at 212,000 for the week ended April 13.
The forecast was in line with expectations of 215,000 claims. This year, claims have fluctuated between 194,000 and 225,000.
Meanwhile, in the U.S. government bond markets, the yield on the 10-year Treasury, which helps set rates for mortgages and other economy-dictating loans, finished at 4.63%, while the policy-sensitive two-year yield, which tends to reflect market expectations of future Fed moves, closed at 4.98%.
In the crypto universe, Bitcoin, the leading digital currency, anticipates a significant event occurring once every four years, where the token's new supply is effectively halved.
This event, known as a Bitcoin halving, historically triggers a surge in its value.
While the supply of existing Bitcoin isn't physically halved, the event makes future supply more challenging to obtain.
This mechanism helps maintain Bitcoin's value and keeps it in demand without flooding the market.
Bitcoin's first "halving" took place in November 2012, and its fourth halving is scheduled for later this week, on April 20.
Historically, the halving event has triggered a significant surge in Bitcoin's value.
Despite past value surges, some experts caution that this may not necessarily occur this time around.
Bitcoin traded in an intraday range of US$60,822.00 to US$64,092.00 before settling at US$63,200.00.
From a technical standpoint, despite a recent decline from its peak at US$72,000.00, Bitcoin remains within the pre-halving "trading zone," with support estimated between US$56,000.00 and US$58,000.00 and resistance between US$78,000.00 and US$81,000.00.
Market participants closely watching the halving event's potential impact on Bitcoin's supply, demand dynamics, and price trajectory should exercise caution due to expected high volatility and adapt trading strategies to market fluctuations.
Meanwhile, Ethereum, the second-largest blockchain in terms of cryptocurrency market capitalization, traded within a daily range of US$2,955.00 to US$3,089.00 before closing at US$3,050.00.
Precious metal prices saw another volatile session, reversing earlier losses as the appeal of the safe-haven metal elevated the market price for spot gold to $2,375 per ounce, while silver closed at $28.11.
Energy market prices extended their decline for a fourth consecutive session, continuing the retreat from last week's highs. The global benchmark Brent crude oil settled at $86.90 per barrel, while the U.S. benchmark West Texas Intermediate settled at $81.80.
The U.S. Dollar Index (U.S. DXY), which measures the dollar's strength against six major foreign currencies in the forex market, reset its five-month high at 106.20.
Meanwhile, the Eurodollar was 1.0636, and the British pound finished at 1.2428. The Japanese yen ended at 154.56, while the Australian dollar was at 0.6412.
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