Bitcoin experienced a significant drop on Thursday, falling over 4% to close at $70,817. This decline was attributed to the Federal Reserve issuing another warning about high inflation and deciding to keep interest rates unchanged, which seems to have diminished market expectations for a near-term policy shift.
The Federal Reserve Keeps Rates Steady, Raises Inflation Expectations
Following attacks on Middle Eastern energy infrastructure by Iran, volatility in the energy sector has come into focus. Brent crude oil prices surged to over $115 per barrel, driven by heightened concerns over attacks around Iran's South Pars gas facilities, leading to increased risks of supply disruptions. The rise in oil prices has strengthened the dollar and pushed bond yields higher, creating an unfavorable market environment for risk assets.
Stock Markets and Global Markets React to Volatility
On Thursday, U.S. stock index futures declined. The Dow Jones Industrial Average futures fell by 0.3%, while the S&P 500 and Nasdaq 100 futures each dropped by about 0.2%. On Wednesday, both the Dow and S&P 500 indices recorded their lowest closing prices since 2026. Asian stock markets also reflected this downward trend, with cautious sentiment intensifying across global trading markets.
The Bank of Japan decided to keep its policy interest rate unchanged. Bank officials warned that the ongoing instability in the Middle East and oil price fluctuations could complicate Japan's inflation outlook. Traders are turning to the upcoming U.S. weekly unemployment claims data and the Philadelphia Fed manufacturing index for more signals regarding the economic direction.
In corporate news, despite strong quarterly revenue growth, Micron Technology's stock fell over 2% in after-hours trading. Investors are also awaiting earnings reports from major companies like Alibaba and FedEx.
Federal Reserve Chairman Jerome Powell conveyed a message interpreted by investors as indicating limited prospects for rate cuts in the near term, although the Fed has left the door open for a potential cut later in 2026.
Major Cryptocurrencies Decline, Kraken Delays IPO
Since the end of 2025, the decline in cryptocurrency prices and thin trading volumes have reduced the appeal of digital asset companies in the public markets. Kraken has stated that it will reconsider its IPO plans only after market conditions improve.