Powell suppressed expectations of rate cuts, U.S. stocks recorded their biggest weekly drop in two months, and market sentiment fell

After a strong post-election rally, market sentiment cooled last week as Federal Reserve Chairman Powell seemed intent on slowing down the pace of rate cuts, cooling the excitement generated by the "Trump deal."

According to 4E monitoring, the three major U.S. stock indexes continued to weaken after hitting new highs on Monday last week. The sharp cut in interest rate expectations on Friday put pressure on U.S. stocks to fall across the board. The S&P 500 index fell 2% in the past five trading days, wiping out half of its gains since the election. The Dow Jones Industrial Average fell 1.24% this week, and the Nasdaq fell 3.15% this week, the largest weekly drop since September.

After Bitcoin broke through $93,000 on Wednesday to hit a record high, it began to converge but showed resilience under the pullback of the U.S. stock market. It is currently fluctuating in a narrow range around the $90,000 mark. As of press time, Bitcoin is trading at $90,799, up nearly 12% in 7 days. Other altcoins followed the fluctuations of Bitcoin, and SOL benefited from the continued enthusiasm of MEME, showing strong rebound and upward momentum.

In terms of foreign exchange, the Fed's expectations for rate cuts have cooled, causing the dollar to continue to strengthen and hit its highest level in more than a year. The dollar index rose 1.6% last week and rose for seven consecutive weeks. The strong dollar impacts everything and continues to put pressure on commodities. Spot gold fell by about 4.6% last week, the largest weekly drop in three years, and fell nearly 9.3% from its historical high. U.S. oil fell by nearly 5% and Brent oil fell by nearly 4%.

The current market focus is on inflation concerns after the Trump administration took office and the Fed's more hawkish outlook. Powell's speech on Thursday basically said that Fed officials do not need to rush to cut interest rates, causing traders to slash their expectations of rate cuts. The decline in sentiment and uncertainty in monetary policy have increased the market's upward resistance. In particular, we need to pay attention to Nvidia's financial report on Wednesday, which directly determines whether the AI narrative of US stocks can continue.