Markets got the rate cut they wanted, but along with it, a sobering message from the Fed they didn’t see coming. Jerome Powell’s warning that more easing may not be in the cards this year rattled investors, sending the Dow into a reversal and triggering a bloodbath in the crypto market led by Bitcoin.
Summary
- The Federal Reserve cut interest rates by 0.25%, lowering the benchmark range to 3.75–4%.
- Chair Jerome Powell signaled no guarantee of further cuts in December, citing inflation and labor risks.
- Stocks reversed record gains while Bitcoin and major cryptocurrencies tumbled, triggering a broad risk-off retreat.
On October 29, the Federal Reserve delivered a widely anticipated quarter-point interest rate cut. Yet, in a move that caught the market off guard, Chair Jerome Powell promptly doused any expectations for a follow-up in December. The decision lowers the benchmark rate to a range of 3.75% to 4%.
Initially, the news propelled the Dow Jones and S&P 500 to fresh all-time highs. But those gains evaporated minutes into Powell’s press conference. He underscored the Fed’s data-dependent stance, pointing to elevated inflation and rising “downside risks to employment” as conflicting forces that will keep the central bank on hold.
“In the committee’s discussions at this meeting, there were strongly differing views about how to proceed in December,” Powell stated. “A further reduction in the policy rate at the December meeting is not a foregone conclusion. Far from it.”
Markets reverse course as Powell tempers expectations
The Dow Jones Industrial Average nosedived, surrendering a 200-point advance to finish the day down 166 points. The S&P 500 fell 0.4%, and the Nasdaq Composite dipped 0.1%. In a matter of minutes, Powell’s commentary had reframed the entire trading narrative, dragging markets from record intraday highs to a negative close.
The turbulence wasn’t confined to traditional finance. The crypto market, which has increasingly tracked the trajectory of tech stocks, endured an even sharper downturn. The total market cap was slashed by 2.5% in 24 hours, dropping to $3.78 trillion.
Leading the decline, Bitcoin (BTC) recoiled from a daily high of $115,028 to hover around $110,271 as of press time, according to crypto.news data. The move wiped out over 2% of its value in just one hour, cementing a nearly 4% loss on the day. Ethereum (ETH) saw a 5.26% plunge that dragged its price from a peak above $4,116 down to $3,896.
XRP, Binance Coin (BNB), and Solana (SOL) all registered losses of at least 3%. The parallel slides across both stock and crypto markets painted a clear picture: a sudden, broad retreat from risk.
