Markets React to Powell’s Testimony: Stocks Steady, Gold and Crypto Dip

by with No Comment Market updates

On February 11, 2025, Federal Reserve Chair Jerome Powell testified before the Senate Banking Committee, reinforcing the Fed’s cautious stance on interest rates. He highlighted that while inflation is slightly above the 2% target, the economy remains strong, and there’s no rush to cut rates. Powell also warned against loosening policy too soon, as it could slow inflation progress.

Stocks hold steady

U.S. stock markets had a mixed reaction to Powell’s testimony. The S&P 500 edged up 0.04% to $605.31, while the Dow Jones gained 0.31% to $446.11. The Nasdaq, however, dipped 0.26% to $527.99 as tech stocks reacted to Powell’s cautious outlook. Investors remain on edge, waiting for clearer signals on future rate cuts.

Source: Flickr

Gold pulls back

Gold prices took a slight hit after Powell’s testimony, as some investors dialed back safe-haven bets. The SPDR Gold Shares ETF dropped 0.39%, closing at $267.39. While gold has been on a strong run, traders are reassessing its short-term outlook in light of the Fed’s steady stance.

Oil prices stay firm

Oil markets showed resilience, with U.S. crude oil rising 1.15% to $78.27. Supply concerns and geopolitical risks kept prices supported, despite Powell’s measured tone on the economy.

Source: Pixabay

Crypto slides

Bitcoin and the broader crypto market saw a selloff following Powell’s remarks. Bitcoin fell 2.07% to $96,143, as traders adjusted to expectations of higher-for-longer interest rates. Crypto markets remain highly sensitive to Fed policy, with investors watching closely for any shifts.

Looking ahead

Powell’s testimony reaffirmed the Fed’s wait-and-see approach, keeping markets cautious. Stocks are holding up, but gold and crypto saw some pullbacks. The next big focus? Upcoming inflation data and how the Fed reacts to it in the coming months.

Fed Holds Rates Steady—Here’s How Markets Reacted

by with No Comment Market updates

On January 29, 2025, the Federal Reserve decided to keep interest rates unchanged at 4.25%–4.50%, a move widely expected by markets. The decision signals the Fed’s cautious stance as it monitors inflation and economic growth under President Donald Trump’s new administration.

How the markets reacted

1. Stocks pulled back slightly

Major stock indices dipped following the announcement. The S&P 500 slipped 0.47% to $601.81, while the Dow Jones edged down 0.29% to $447.18. Tech-heavy Nasdaq lost 0.17% to close at $520.83. Investors took a wait-and-see approach as they assessed the Fed’s steady stance alongside potential fiscal policy shifts.

Source: Flickr

2. Dollar strengthened

The U.S. dollar gained ground after the decision, with the dollar index rising 0.08% to 107.89. The greenback saw notable strength against the yen and euro, driven by ongoing speculation over new tariffs aimed at boosting domestic production.

3. Crypto held strong

Bitcoin climbed 2.35% to $105,283, while Ethereum gained 1.14%, trading at $3,196.18. With no immediate rate cut, investors continued to view crypto as a hedge against inflation and potential regulatory shifts under the Trump administration.

What’s next?

Markets are now looking ahead to key economic data and signals from the Fed on future rate cuts. With inflation and fiscal policies in focus, traders are keeping a close eye on how these factors will shape stocks, forex, and crypto in the coming months.

Fed Cuts Rates, Markets React Sharply

by with No Comment Market updates

On December 18, 2024, the Federal Reserve announced a 0.25% interest rate cut, bringing the federal funds rate to a range of 4.25% to 4.5%. This marks the Fed’s third rate reduction this year, aiming to support the economy while inflation remains above the 2% target.

Market reaction

The announcement triggered a significant market response:

  • The Dow Jones Industrial Average dropped over 1,100 points, marking its 10th consecutive day of losses—the longest streak since 1974.
  • The S&P 500 and Nasdaq Composite also tumbled, with declines of 2.9% and 3.6%, respectively.
  • Bond yields rose, with the 10-year Treasury note hitting its highest level since May, and the dollar strengthened.
Source: Flickr

Why the sell-off?

While the rate cut was widely expected, the Fed’s cautious outlook for 2025 caught investors off guard. The central bank signaled just two additional cuts next year, slower than markets had hoped. This tempered approach led to a reassessment of valuations and heightened concerns about future economic growth.

What’s next?

Fed Chair Jerome Powell emphasized the need for further progress in reducing inflation before committing to more aggressive rate cuts. “We need to see more progress in lowering inflation before we can be confident that the job is done,” Powell said.

As the Fed navigates its delicate balancing act, traders and investors should brace for continued volatility in the months ahead. The evolving interplay between inflation, economic data, and monetary policy will remain a focal point for the markets.