U.S. Stocks, Crypto, and Global Markets Driven by Fed Policy and Tariff Outlook
Last week, global financial markets displayed complex and notable dynamics, propelled by the Federal Reserve’s dovish stance and remarks from Trump suggesting flexibility on reciprocal tariff plans.
U.S. stock indices closed the week higher, the cryptocurrency market showed modest gains, and the dollar, oil, and gold each posted distinct performances.
The three major U.S. stock indices ended the week with gains despite intraday volatility. The Dow Jones Industrial Average rose 1.2% over the week, marking its largest weekly increase since mid-December 2024. The S&P 500 gained 0.51%, snapping a four-week losing streak, while the Nasdaq Composite edged up 0.17%, halting a similar four-week decline.
However, large-cap tech stocks underperformed, with Nvidia dropping 3.26% and Tesla falling 0.53%, extending its nine-week slide. This divergence—rising indices paired with declining tech giants—signals a rotation of capital from high-valuation growth stocks into defensive sectors.
The Fed’s decision to hold interest rates steady, coupled with guidance for two rate cuts within the year, eased concerns over monetary tightening. Meanwhile, Trump’s comments on tariff flexibility offered a glimmer of optimism ahead of the April 2 “tariff deadline.” Together, these factors bolstered market sentiment, though tech weakness suggests waning tolerance for elevated growth stock valuations.
The cryptocurrency market exhibited an upward trend amid fluctuations. Bitcoin dipped to around $81,000 on Tuesday but rebounded after the Fed’s dovish remarks, peaking above $87,000 on Thursday—its highest level in two weeks. It later consolidated around $84,000 before a swift morning surge, reaching $85,721 as of this writing, up 3.18% over the past seven days. Ethereum hovered near the $2,000 threshold, seeking firm footing, while the BNB ecosystem drew attention due to sustained meme coin momentum.
The Fed’s accommodative outlook reduced the opportunity cost of holding high-risk assets, fueling improved sentiment and trading activity. Bitcoin’s rebound and heightened ecosystem engagement underscore continued investor interest in the space.
The U.S. Dollar Index climbed 0.34% last week, its first weekly gain in March, supported by Fed policy expectations. Crude oil prices rose over 2%, extending gains into a second week, driven by shifts in supply-demand dynamics. Spot gold advanced 1.31%, marking its third consecutive weekly increase, highlighting its appeal amid uncertainty.
Attention this week turns to Friday’s release of the PCE Price Index, the Fed’s preferred inflation gauge, which will shape expectations for rate cuts. A tame reading could further lift risk assets. Meanwhile, with the April 2 tariff deadline approaching, markets remain cautious about policy uncertainty. Clarity on tariffs could stabilize recent volatility and set the stage for a new trend.
Last week’s U.S. stock divergence, crypto market uptick, and resilient dollar and gold performance paint a multifaceted picture of today’s financial landscape. Driven by Fed policy and tariff developments, capital flows are shifting, and asset correlations are growing more pronounced. Investors should monitor PCE data and tariff progress while assessing sector rotations and safe-haven demand for strategic positioning.