The latest data shows that the US CPI rose 0.5% month-on-month in January, the largest increase since August 2023, and the core CPI rose 0.4% month-on-month, with inflation data exceeding expectations across the board.
After the CPI data was released, the three major US stock indexes initially fell, but then news emerged that there could be a glimmer of hope in the Russia-Ukraine conflict, causing US stocks to rebound from their lows, with mixed closing results - the S&P 500 index fell 0.27%, the Dow Jones fell 0.50%, and the Nasdaq managed to eke out a 0.03% gain. Large-tech stocks had a mixed performance, with Tesla surging 2.44% to end a five-day losing streak.
The cryptocurrency market saw a volatile upward move, with BTC briefly dipping to $94,000 after the CPI release, but then rebounding quickly, breaking above $98,000 by early morning, and trading at $97,762 at the time of writing, down 1.85% in the past 24 hours. Ethereum also saw a significant rebound, surging over 5% to break above $2,700. The BSC chain saw rising activity, driving a strong rally in BNB and the broader ecosystem. The cryptocurrency market's rebound amid negative news may indicate that the market has found strong support in the short term.
In the forex and commodities space, the US dollar index rose to a new daily high on the CPI report, but later pared gains to trade roughly flat. Powell's hawkish signals, as well as signs of easing in US inflation and geopolitical tensions, put pressure on oil prices, which ended a three-day rally and fell nearly 3% intraday. Spot gold, after hitting a record high on Tuesday, underwent a correction but then saw a V-shaped reversal driven by safe-haven demand, closing 0.2% higher.
With inflation data exceeding expectations and the labor market remaining strong, the Fed is likely to take a more cautious approach to rate cuts. The market now expects only one 25-basis-point rate cut this year, down from the previous expectation of at least two, with the timing pushed back from September to December. eeee.com, as a financial trading platform supporting cryptocurrencies, stock indexes, commodities like gold, and forex, has recently launched a USDT stablecoin wealth management product with an annualized yield of 5.5%, providing investors with a potential hedging option. 4E reminds you to be aware of market volatility risks and allocate your assets accordingly.
