The latest economic data shows that the US job market is much stronger than expected, with signs of rising inflation, compounded by Trump's tariffs and immigration policies that exacerbate inflation concerns. The market generally expects the Federal Reserve to pause rate cuts at its policy meeting at the end of this month and significantly delay the timing and probability of rate cuts this year.
According to 4E monitoring, the three major US stock indexes recorded a second consecutive week of declines last week, with the S&P 500 cumulatively down 1.94%, almost erasing the post-US election gains, the Dow Jones down 1.86% for the week, and the Nasdaq down 2.34%. Among the large-cap tech stocks, only Google A rose slightly last week, while Nvidia and Tesla led the declines, falling 5.93% and 3.83% respectively.
The cryptocurrency market has been volatile and trending downward, with Bitcoin briefly returning above $10,000 on Tuesday before falling again, and at one point dropping to $91,200, a new low since December 5 last year, as the US Department of Justice was granted approval to sell the $6.5 billion in seized Bitcoin, heightening market fears and risk-off sentiment. Bitcoin is currently fluctuating above $94,000, down nearly 5% for the week. The recent hot narrative of AI agent concept coins, while generally seeing significant adjustments, continue to receive great attention after Huang Renxun's high-profile promotion of AI Agent as the future at CES, with DeFAI and Investment DAO becoming new hotspots.
In the foreign exchange and commodity markets, the expectation of the Federal Reserve pausing rate cuts has strengthened, with the US dollar index approaching the 110 level on the non-farm payrolls day, reaching a new two-year high, up 0.63% for the week. The US has imposed new sanctions on the Russian oil industry, and investors are concerned about supply disruptions, with oil prices rising nearly 5% on Friday, up more than 3.5% for the week for US oil and over 4% for Brent. The uncertainty of Trump's policies has boosted safe-haven demand, with gold maintaining an upward trend, up 1.9% for the week.
The December meeting minutes show an increasingly hawkish stance by the Federal Reserve, and the much stronger-than-expected US employment data has also reinforced the expectation of cautious rate cuts. The market has significantly delayed the timing and probability of rate cuts this year, and is increasingly concerned that the rate cut cycle may have ended, and the next move in interest rates is more likely to be a rate hike. The market is rife with uncertainty, and risk assets are collectively under pressure.
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