JPMorgan’s latest comments have raised alarm among traders and investors, as the firm downplays the chances of a bull market despite widespread expectations for Federal Reserve rate cuts.
According to JPMorgan’s Mislav Matejka, any potential rate reductions are likely to be reactive measures to slowing growth rather than catalysts for a market rally.
In a recent update, Matejka noted that September, traditionally a tough month for U.S. equities, coupled with heightened political and geopolitical risks, could dampen market optimism. The S&P 500 and MSCI All-Country World Index have reached record highs, partly due to speculation about upcoming Fed actions, but JPMorgan anticipates that rate cuts might not sustain this momentum.
The crypto market, meanwhile, is also adjusting to the news. Despite expectations for rate cuts, Bitcoin and other cryptocurrencies have struggled to gain traction. BitMEX co-founder Arthur Hayes highlighted a 10% drop in Bitcoin’s value since recent rate cut discussions began, suggesting that the anticipated benefits of such cuts are not materializing.
Additionally, Hayes pointed out that the Reverse Repo Program (RRP), which allows institutions to park funds with the Fed, might be pulling investment away from riskier assets like cryptocurrencies. As a result, both stock and crypto markets are navigating uncertainty as they await further developments.
Coinbase has emerged as the best-performing stock in the S&P 500 for June, climbing 43% amid a surge of bullish momentum driven by regulatory clarity, product innovation, and deeper institutional interest in crypto.
Coinbase CEO Brian Armstrong has spotlighted a significant acceleration in institutional crypto adoption, driven largely by the surging popularity of exchange-traded funds and increased use of Coinbase Prime among major corporations.
The latest market turbulence, fueled by geopolitical tensions and investor fear, offered a textbook case of how sentiment swings and whale behavior shape crypto price action.
Jefferies chief market strategist David Zervos believes an upcoming power shift at the Federal Reserve could benefit U.S. equity markets.