Market Wrap: U.S. Inflation Eases, DOW Hits Record High, and Bitcoin Price Surges

Market Wrap: U.S. Inflation Eases, DOW Hits Record High, and Bitcoin Price Surges
Market Wrap

The U.S. economy shows signs of stabilization, the stock market hits new highs, and Bitcoin continues its upward trajectory. 

U.S. Inflation Slows to 3.4% in April

Inflation across the United States has eased, providing relief to American families and reassuring central bankers. The consumer price index (CPI) fell to 3.4% in April, down from 3.5% in March. 

This slowdown aligns with Wall Street forecasts, with key factors behind inflation last month being rising housing and fuel costs.

DOW Jones Industrial Average Hits 40,000

Following the news, the DOW Jones Industrial Average achieved a historic milestone, crossing the 40,000-point mark for the first time. Renewed investor hopes for a “soft landing” for the U.S. economy followed a favorable inflation report.

The index, comprising stocks from major companies like Apple and McDonald’s, has gained a modest 6% this year. The S&P 500 and Nasdaq also reached record highs.

Bitcoin Surges Back Toward All-Time Highs

The correlation between Bitcoin and Stocks has only grown with the adoption of the former.

Following the positive CPI data, Bitcoin began surging upwards. It is good to note that the last time BTC hit its previous all-time high price, interest rates were near zero.

Now, a supply-demand imbalance is eclipsing the outlook of higher-for-longer interest rates. Bitcoin’s latest rally was fueled by a slate of ETF approvals and anticipation of the halving event, which cut block issuance in half.

Investors are gaining exposure through bitcoin ETFs, contributing to the surge.

Author’s Take

In as much as the inflation rates went down, they are nowhere near zero, and hence, the increase in prices of Stocks and Bitcoin may be more of market manipulation than organic investor interest.

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