Futures Flat After Friday’s Rally, Cryptocurrencies Spiral Down
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- Stock futures on Monday float near unchanged levels
- Cryptocurrencies take a hit after Elon Musk spars with Bitcoin supporters on Twitter
US stock futures fluctuated relatively unchanged in the early hours before the opening of the session on Monday. Even though investors pushed major stock indexes significantly higher on Friday, the market is still uncertain whether to power forward due to lingering inflation concerns. Futures contracts tied to the Dow Jones, the S&P500 and the Nasdaq are lower by about 0.10% each in pre-market trading today.
Stocks rose on Friday to end a turbulent week rattled by fears that the Fed’s stance might be inappropriate for the current market environment. Earlier in the week, stocks experienced their worst three-day selloff in more than eight months as economic data showed inflation rose to a 13-year high. On Friday, however, investors scooped up shares in companies that suffered the biggest declines earlier. The tech sector staged a powerful rebound alongside growth stocks in general. Value stocks were also lifted from their steep declines.
Friday’s rally boosted the tech-centered Nasdaq Composite, which jumped 304.99 points, or 2.32%, to end the session at 13,429.98. The S&P500 advanced 61.35 points, or 1.49%, to 4,172.85. The blue-chip 30-stock Dow Jones Industrial Average index climbed 360.68 points, or 1.06%, to finish Friday’s trading at 34,382.13. The three benchmark stock gauges rallied on Friday as a continuation of an upside move that began on Thursday.
Nevertheless, stocks couldn’t continue their weekly winning streak and ended last week in decline. The S&P500 and the Dow Jones each lost a little over 1%. The Nasdaq Composite erased 2.3% to log its fourth straight week of losses, its longest losing stretch since August 2019.
This week market participants will be looking toward the FOMC minutes on Wednesday to get a glimpse of the Fed’s outlook for the economy and how the central bank views transitory inflation. Investors remain worried that high inflation could threaten the lofty valuations of the stock market, particularly tech stocks. In addition, the spike in consumer-price inflation could prompt the Federal Reserve to unwind some of its monetary support that has been helping the stock market move higher.
Musk Fuels Bitcoin Speculations
Meanwhile, in cryptocurrency, the frothy valuations of digital assets have been sliding after a series of erratic tweets by Tesla CEO Elon Musk prompted another selloff in the last hours. Bitcoin fell to its lowest level since February. The orange coin slipped near the $42,000 mark as Elon Musk continued to criticize Bitcoin.
The Tesla chief even implied Tesla might have sold or could sell its Bitcoin holdings this quarter ending June. When a user suggested that “Bitcoiners are going to slap themselves next quarter when they find out Tesla dumped the rest of their Bitcoin holdings,”, Mr. Musk replied with one word: “Indeed”. The speculation that Tesla had sold its Bitcoins prompted a selloff in the coin. To clarify, Mr. Musk posted a tweet saying “Tesla has not sold any Bitcoin.”
“Bitcoin is actually highly centralized” the billionaire engineer commented in another tweet. Bitcoin on Monday remains pressured and is currently trading in its sixth day of consecutive losses. The total market capitalization has shed roughly $500bn over the past five days as crypto market participants have been wary to stay in the volatile digital asset space.
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