Bitcoin suffers steep decline, under $100,000 for the first time in months
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Representations of cryptocurrencies are seen in this illustration, August 10, 2022. — Reuters
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Bitcoin rallied sharply on Tuesday, falling more than 6 percent below $100,000 for the first time since June, as broader risk-off sentiment swept through financial markets.
The CEO of Goldman Sachs and Morgan Stanley warned that an equity pullback could lead to an equity pullback.
The cautious mood sent Treasury yields lower, while the US dollar climbed to a four-month high against the euro, adding to pressure on risk assets, including cryptocurrencies.
Bitcoin’s decline has highlighted growing investor caution despite tightening financial conditions and market volatility, prompting some traders to reduce exposure to high-risk assets.
The bank’s CEO warned at an investment conference in Hong Kong about the possibility of a stock market correction of more than 10 percent over the next two years.
Shares of NVIDIA were down 4%, while an index of semiconductors also fell 4%.
Shares of Palantir Technologies PLTR.O fell more than 8 percent, despite the data analytics provider reporting strong quarterly results.
The company, which has more than doubled in value this year, is forecast to beat market expectations for fourth-quarter results as the rapid adoption of artificial intelligence boosts demand for its services.
“Big Short” investor Michael Berry, known for his successful bet against the U.S. housing market in 2008, has bet bearish on NVIDIA and Palantir, according to a regulatory filing Monday.
The S&P 500 fell more than 1% and the Nasdaq fell more than 2%. The Nasdaq is still up nearly 21% for the year so far.
“The market is vindicatingly higher from an earnings perspective, but at times it looked like it was positioning for a risk-averse pullback on even the slightest disappointment,” said Keith Buchanan, senior portfolio manager at Globalit Investments.
The Dow Jones industrial average fell 251.44 points, or 0.53%, to 47,085.24, the S&P 500 fell 80.42 points, or 1.17%, to 6,771.55, and the Nasdaq Composite fell 486.09 points, or 2.04%, to 23,348.64.
MSCI’s gauge of stocks worldwide .miwd00000pus fell 11.51 points, or 1.14%, to 996.34.
The pan-European STOXX 600 index fell 0.3%.
AI is helping stocks optimistic about deals. On Monday, the stock gained after Amazon.com struck a $38 billion cloud services deal with ChatGPT creator Openei.
The U.S. dollar was weakened in part by lower bets for near-term Federal Reserve easing, with divisions within the Fed casting doubt on the prospect of another rate hike this year.
The Fed cut rates last week, but Chair Jerome Powell said the December rate cut was not a foregone conclusion. Traders are betting on a 65 percent chance of a rate cut in December, compared with 94 percent a week ago, CME Fed Watch showed.
The euro fell for a fifth straight session and was down 0.3 percent at $1.148, its weakest since Aug. 1. Against the yen, the dollar was 0.5% lower, although the Japanese currency remained near a recent 8-1/2-month low.
Sterling took a tumble after Britain’s finance minister hinted at “tough choices” in his upcoming budget. Sterling weakened GBP=0.72% to $1.3044.
US Treasury yields fell amid a broader risk-off tone in financial markets.
Due to the government shutdown, the closely watched monthly jobs report by the Bureau of Labor Statistics will not be available on Friday, as previously scheduled.
The yield on the benchmark U.S. 10-year note US10YT=RR fell 2 basis points to 4.087 percent from Monday’s close of 4.107 percent.
U.S. crude CLC fell 1.49 cents to settle at .560.56 a barrel, and Brent LCOC fell 1.45 cents to settle at .464.44. Weight of a strong dollar
