Stocks, dollar, gold, oil, and Bitcoin show diverging moves post-Fed rate cut

Markets didn’t sit still after the Federal Reserve slashed its benchmark rate by a quarter percentage point on Wednesday after 10 long months.

What came after was a messy, high-stakes dance across the world’s asset classes, as stocks, commodities, and currencies all moved, but not in one direction.

Traders and investors are trying to make sense of a complicated new environment. Risk is back on the table, but not everything is rallying the same way.

U.S. equity futures were slightly green, but the mood was anything but euphoric. S&P 500 futures ticked up just 0.2%, same as the Nasdaq 100, while Dow Jones futures added a mild 0.1%, that’s 50 points, nothing to write home about.

This lukewarm reaction came after a jittery Wednesday session where the Dow Jones managed a 260-point gain, or 0.57%, while both the S&P 500 and Nasdaq Composite actually dropped.

Gold loses steam while the dollar flexes and bonds plunges

Gold prices slipped as the dollar got stronger, because, of course, that’s what always happens when traders sniff less dovishness from the Fed than they wanted.

Spot gold fell 0.6%, now sitting at $3,637.41 per ounce after briefly touching a record high of $3,707.40 the day before. U.S. gold futures for December sank by 1.2% to $3,671.30.

Silver fell by 0.6% to $41.40 per ounce, and platinum ticked up slightly by 0.5% to $1,371.6, but palladium inched down 0.2%, now at $1,152.24, according to data from Bloomberg. Even SPDR Gold Trust, the heavyweight among gold ETFs, saw its holdings drop by 0.44%, from 979.95 tonnes to 975.66 in one day.

Bloomberg’s dollar index gained 0.4%, the biggest one-day move in two weeks. Traders pulled back on aggressive rate-cut forecasts, and currencies like the New Zealand dollar and the South Korean won took the hit.

Meanwhile, the 10-year Treasury yield dipped by over 3 basis points to 4.045 and the 2-year Treasury yield plunged by over 2 basis points to 3.524%. The 30-year Treasury bond yield is also 3 basis points lower at 4.643%.

Asia-Pacific trades split as energy shock rocks Australia

Markets in Asia didn’t move in sync either. Japan’s Nikkei 225 surged 1.15% and closed at a fresh all-time high of 45,303.43. Gains came mostly from real estate and tech names.

Top performers included Resonac Holdings, which popped over 11%, Sumco Corp, which climbed 7.39%, and Mitsui Mining & Smelting, up more than 5%. South Korea’s Kospi wasn’t far behind, rising 1.40% to end at 3,461.3.

But not everyone had a good day. Australia’s S&P/ASX 200 slumped 0.83%, closing at 8,745.2. The standout loser? Santos, the major Aussie gas producer, whose shares plunged over 11% last week after ADNOC, the oil giant from Abu Dhabi, walked away from an $18.7 billion acquisition.

That acquisition deal had dragged on for months due to pricing and legal headaches, and ADNOC finally tapped out. So Santos is now licking its wounds with its stock down to A$6.78.

Back to Asia, China didn’t exactly glow either. Hong Kong’s Hang Seng Index lost 1.31%, and the mainland CSI 300 dropped 1.16% to land at 4,498.11.

Europe, on the other hand, woke up feeling hopeful. Stoxx 600 was up 0.5% in early London trade, and for once, nearly all regional indexes joined the ride.

The Euro Stoxx Banks Index jumped 0.9% in early trade, while the region’s biggest banks Deutsche Bank, Santander, and Monte dei Paschi all surged by about 2% respectively, which we think means that financials could benefit from the transatlantic macro picture.

And finally, no global cross-asset report would be complete without Bitcoin. The crypto king was caught in the middle; neither rallying hard nor breaking down. That alone is telling.

In an environment where stocks are twitchy, gold is fading, and the dollar is punching up, Bitcoin’s sideways grind says more than a breakout would. At press time, the OG crypto was worth $117,782.