Crypto Stocks Surge as Powell Signals Possible September Rate Cut
Crypto-linked stocks and digital assets rose significantly after Federal Reserve Chair Jerome Powell indicated a potential interest rate cut as early as September. This marked a shift in sentiment following investor doubts about Fed action before the year's end.
- Bitcoin and ether experienced increases after Powell's comments.
- The S&P 500 and Nasdaq also gained, with crypto-related stocks showing notable movements.
- Circle (CRCL) surged by 7%, followed by eToro (ETOR) and Marathon Digital (MARA) at 6%, Coinbase (COIN) up 5%, MicroStrategy (MSTR) gaining 4%, and Robinhood (HOOD) rising 3%.
- Lower interest rates generally promote risk-taking, enhancing the attractiveness of speculative assets.
- Powell acknowledged ongoing inflation risks and labor market strain while suggesting evolving conditions, stating, “The balance of risks appears to be shifting.”
- His remarks renewed investor confidence in a possible September rate cut amid previously stronger economic data.