Will 2025 Rate Cuts Push Markets Higher?

Nasdaq 100 jumped 1.4% this morning, capping the strongest week since November 2024.

Markets are rallying, and the Fed President Chris Waller had this to say during a talk yesterday, per Bloomberg:

“The inflation data we got yesterday was very good”

Equities are surging, bond yields are cooling, and crypto is recovering.

Is this rally sustainable? Let’s break it down

Small Caps Steal the Show

US stocks rallied across the board this week:

  • Russell 2000: +5.01%
  • Nasdaq 100: +3.98%
  • S&P 500/Dow Jones: Both climbed around 3.7%

Bonds Finally Fall

Bond markets welcomed the Fed’s softer tone:

  • US: Fell to 4.57%
  • UK: Down to 4.62%
  • Germany: Dropped to 2.51%

Dollar Won’t Budge

The US dollar still holding its ground as a leader:

  • US Dollar Index: Rose slightly (+0.1%)
  • British Pound: Fell 0.4% to $1.21
  • Japanese Yen: Down 0.3%

Crypto Makes a Comeback

Bitcoin and Ethereum also jumped as confidence in risk assets returned:

  • Bitcoin: +3.9%, breaking above $104K for the first time since December
  • Ethereum: +3.3%, trading at $3,416

Commodities Stay Quiet

Commodities saw slower moves this week:

  • WTI Crude Oil: Fell 0.2% to $78.54 per barrel
  • Gold: Down 0.2% to $2,708 per ounce

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