Wall Street Closes Lower Ahead of Thanksgiving as Inflation Data Sparks Concerns – Bitcoin Price Back on the Rise, Ethereum Surges
Wall Street's main indexes ended lower on Wednesday, breaking a seven-day winning streak as the market retreated from record highs ahead of the Thanksgiving holiday closure on Friday.
Meanwhile, tech stocks tumbled on Thanksgiving Eve as strong US inflation data fuelled worries the Fed may remain cautious on rate cuts.
The Fed's preferred inflation gauge, the Personal Consumption Expenditures (PCE) index, rose 2.3% year-over-year in October and 0.2% month-over-month, while US unemployment benefit applications fell by 2,000 to 213,000 last week, while the Q3 GDP report showed the economy grew at a solid 2.8% annualised pace.
After reaching an all-time high of US$99,617 last week, Bitcoin's price is back on the rise, rebounding above US$97,000 following significant volatility over the past four trading sessions, with bulls eyeing the US$100,000 milestone.
At the New York close, preliminary data showed the Dow Jones Industrial Average fell 136.31 points, or 0.31%, to 44,723.23.
The Standard & Poor's 500, a key global benchmark, lost 22.85 points, or 0.38%, to end at 5,998.78, while the Nasdaq Composite fell 113.80 points, or 0.59%, to 19,061.78.
Dell fell 12%, and HP dropped nearly 6% following weak quarterly forecasts, dragging the Information Technology sector down by 1.2%.
The so-called "Magnificent Seven" showed mixed results, with Nvidia slipping 1.5%, Tesla down 1.6%, Microsoft sliding 0.9%, Apple retreating 0.1%, Alphabet gaining 0.1%, Amazon tumbling 0.9%, and Meta (formerly Facebook) weakened 0.1%.
In bonds, crypto and commodities
The 10-year Treasury yield, which influences mortgage rates and other key loans in the US government bond market, settled at 4.26%.
The policy-sensitive two-year yield, which closely tracks Federal Reserve interest rate adjustment expectations, closed at 4.23%.
In the crypto universe, the price of the flagship cryptocurrency, Bitcoin, briefly touched an intraday high of US$97,219, recovering from a pullback this week that knocked it from record levels after rebounding from the lows of US$91,795 before settling at US$95,000.
Given the recent rebound, traders should closely reassess their positions, especially in the event of another rally that could push Bitcoin towards the US$100,000 mark.
This could present a key opportunity for those looking to capitalise on further bullish momentum, but it's essential to remain cautious of potential pullbacks that may impact the overall trend.
If there is any pullback, the support may initially be found at around US$86,300, with additional buying interest likely near US$73,300.
While there are notable opportunities, caution is advised, as increased market volatility from renewed demand is expected.
Effective risk management and adaptable strategies will be key to navigating this volatility and capitalising on potential opportunities.
Meanwhile, Ethereum got in on the action and surged as volatility heightened and fluctuated between an intraday range of US$3,303 and US$3,684 before closing at US$3,606.
Given the rebound, the path ahead remains bumpy, with a near-term cap seen around US$3,750 to US$4,000. Traders should reassess at this point.
These levels will determine whether the upward trend can continue or if consolidation will occur.
Any pullbacks will likely find support near US$2,900, with additional support in the US$2,300. Reassessment is recommended if these levels are tested.
Spot gold holds steady after falling from its peak, settling at US$2,646 per ounce, while silver closed at US$30.08.
In the energy sector, Brent crude, the international standard, closed at $72.96 and the US benchmark, West Texas Intermediate (WTI), settled at $69.10.
Meanwhile, in currencies, the US Dollar Index (DXY), which tracks the greenback against a basket of currencies, closed lower at 106.25 in New York.
The Eurodollar was 1.0554, and the British pound finished at 1.2668. The Japanese yen ended at 151.84, and the Australian dollar was at 0.6498.
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