"Rush to cut interest rates!" Bitcoin falls below USD87,000, and US stocks close lower

Yesterday's speech by Powell of the Federal Reserve put pressure on market sentiment. The U.S. dollar index jumped in the short term, and the spot gold price fell sharply, and the U.S. stock market accelerated its decline at the end of the day. Bitcoin also suddenly plunged.

Collective decline

The three major U.S. stock indexes fell collectively, with the Nasdaq down 0.64%, the S&P 500 down 0.6%, and the Dow down 0.47%.

Large tech stocks rose and fell, with Tesla down more than 5%, its total market value falling back below US$1 trillion. Google, Amazon and Meta fell more than 1%. Meta fell slightly.

The Nasdaq China Dragon Index closed down 1.81%. Hot Chinese stocks fell broadly, with Bilibili down more than 12%, Xiaopeng Auto down more than 5%, Neta Auto down more than 3%, JD down more than 6%, Alibaba down more than 1%.

Bitcoin also plunged, falling below US$87,000 per coin during trading, down nearly 4%.

Not urgent to cut interest rates

Chairman Powell of the Federal Reserve said that the U.S. economy's recent performance was "very strong", so the Fed does not need to "hurry" to lower interest rates and will carefully observe to ensure that certain inflation indicators remain within an acceptable range.

He claimed: "The economy has not sent any signals that we need to hurry to lower interest rates. The economic strength we see now gives us the ability to make careful decisions."

Trading in the federal funds futures market reflects a decline in the likelihood of a 25-basis-point cut at the Fed's December meeting, falling to about 62% by the end of the day on Thursday, down from 82.5% earlier.

Thursday's U.S. producer price index (PPI) rose 0.2% in October, in line with expectations. The consumer price index (CPI) in October, released on Wednesday, was in line with expectations but still showed that the Fed's efforts to fight inflation have not yet been successful. The core CPI rose 0.3% for the third consecutive month, up 3.3% year-on-year.

Former U.S. Treasury Secretary Summers said that if President Trump really fulfills his promise, the U.S. will once again experience a serious inflation crisis.

During an interview with the media on the same day, Summers pointed out that Trump's domestic tax cuts, higher tariffs and deportation of illegal immigrants would have a serious impact on the U.S. economy.