Dollar Falls As Fed Minutes Cement September Rate Cut; Bitcoin Rallies, Gold Miners Jump To 16-Month High
Portfolio Pulse from Piero Cingari
The Federal Open Market Committee (FOMC) minutes from July have increased expectations for a rate cut in September, leading to a decline in the U.S. dollar and a rise in gold miners and Bitcoin. The Invesco DB USD Index Bullish Fund ETF (UUP) fell, while the SPDR S&P 500 ETF Trust (SPY), Invesco QQQ Trust (QQQ), Materials Select Sector SPDR Fund (XLB), SPDR S&P Metals & Mining ETF (XME), and VanEck Gold Miners ETF (GDX) saw gains.
August 21, 2024 | 7:55 pm
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NEGATIVE IMPACT
The Invesco DB USD Index Bullish Fund ETF (UUP) fell by 0.3% as expectations for a Fed rate cut in September increased, marking its fourth consecutive session of losses.
The FOMC minutes increased the likelihood of a rate cut, which typically weakens the dollar. As UUP tracks the USD, it fell in response.
CONFIDENCE 90
IMPORTANCE 70
RELEVANCE 80
POSITIVE IMPACT
The VanEck Gold Miners ETF (GDX) rose 0.5%, reaching a 16-month high, as gold prices increased post-FOMC minutes.
Gold miners benefit from higher gold prices, driven by expectations of lower interest rates, boosting GDX.
CONFIDENCE 90
IMPORTANCE 70
RELEVANCE 80
POSITIVE IMPACT
The Invesco QQQ Trust (QQQ) gained 0.5% as tech stocks remained strong following the FOMC minutes.
Tech stocks often benefit from lower interest rates, contributing to QQQ's gains.
CONFIDENCE 85
IMPORTANCE 50
RELEVANCE 60
POSITIVE IMPACT
The SPDR S&P 500 ETF Trust (SPY) rose by 0.4% as Wall Street indices held their gains following the FOMC minutes.
The market's expectation of a rate cut is generally positive for equities, leading to gains in SPY.
CONFIDENCE 85
IMPORTANCE 50
RELEVANCE 60
POSITIVE IMPACT
The Materials Select Sector SPDR Fund (XLB) rose 1.2% as materials sector extended gains post-FOMC minutes.
Materials sector benefits from expectations of economic growth and lower rates, boosting XLB.
CONFIDENCE 85
IMPORTANCE 60
RELEVANCE 70
POSITIVE IMPACT
The SPDR S&P Metals & Mining ETF (XME) rose 0.4% after the FOMC minutes, with session gains reaching 1.9%.
Metals and mining stocks benefit from higher gold prices and economic optimism, leading to XME's gains.
CONFIDENCE 85
IMPORTANCE 60
RELEVANCE 70