Dow Slips While Nasdaq Gains, Mortgage Crypto Shift & Fed Rule Proposal Stir Markets

U.S. stocks closed mixed on Wednesday as investors weighed a landmark crypto directive in the housing sector and a sweeping Federal Reserve proposal to ease leverage rules on large banks. While the Nasdaq Composite rose, the Dow Jones Industrial Average ended in the red, reflecting sectoral tensions and regulatory uncertainty.

The Dow Jones Industrial Average fell 106.59 points, or 0.25%, to close at 42,982.4. The S&P 500 slipped marginally by 0.02 points to 6,095.16, while the Nasdaq Composite gained 61.02 points, or 0.31%, finishing at 19,973.6.

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Mortgage Market Shakeup

The Federal Housing Finance Agency (FHFA) made waves early Wednesday after Director Bill Pulte issued an order instructing Fannie Mae and Freddie Mac to consider cryptocurrency as part of borrowers’ assets in mortgage risk assessments. The directive, effective immediately, marks a pivotal shift in U.S. mortgage finance policy.

“Opening the door to the use of crypto in mortgages marked a ‘historic day’ for both the cryptocurrency and mortgage industries,” Pulte said, adding the move aligns with “President Trump’s vision to make the United States the crypto capital of the world”.

The FHFA order emphasizes that only U.S.-regulated, centralized exchange crypto assets will be eligible, and mandates risk adjustments for volatility. This unprecedented shift signals growing institutional recognition of digital assets, even amid persistent regulatory scrutiny.

Fed Rule Proposal Roils Financials

Adding to market volatility, the Federal Reserve unveiled a proposed overhaul to the Enhanced Supplementary Leverage Ratio (eSLR) that would cut capital requirements for GSIB (global systemically important banks) subsidiaries by 27%—or $213 billion. The proposal aims to restore the ratio as a “backstop” rather than a constraint, enabling more participation in U.S. Treasury markets.

Fed Chair Jerome Powell stated, “We want the SLR to serve as a true backstop—not an impediment to low-risk market participation.” But the plan drew dissent within the Fed itself, with Governors Michael Barr and Adriana Kugler warning it could “increase the risk that a GSIB bank would fail”.

The rule now enters a 120-day public comment period, and market reaction was mixed. Financial stocks were under pressure late in the session amid the regulatory uncertainty, contributing to the Dow’s underperformance.

Oil Prices and Energy Sector Dynamics

Crude oil futures for August delivery rose 1.37% to $65.25 per barrel as of 3:36 PM EDT, according to Yahoo Finance. Speculation over a possible Shell-BP merger added momentum to the energy sector. BP shares jumped 1.77% intraday, building on prior gains sparked by reports of merger talks, despite Shell denying formal negotiations.

Analysts remain split, with some advocating a “buy the rumor” strategy for BP, while maintaining Shell as a core holding due to its financial discipline and resilience in uncertain markets.