Key Takeaways:
- US stocks dipped Friday but ended with a gain for the week after the Fed meeting kicked off a rally.
- Major averages gained for the week as the central bank indicated three rate hikes on tap this year.
- Bitcoin ETFs saw their worst week of outflows since they debuted in January.
US stocks dipped on Friday, but ended the week with a gain, bolstered by a two-day rally that kicked of Wednesday following the Federal Reserve’s policy meeting.
Over the course of the last five trading days, the S&P 500 index exhibited remarkable strength, marking an impressive rally of 2.3%. Similarly, the Nasdaq Composite and the Dow Jones Industrial Average also showed resilience, posting gains of 1.7% and 1.6%, respectively. The consecutive record closing highs achieved by both the S&P 500 and the Dow on Wednesday and Thursday underscored the prevailing optimism and bullish sentiment pervasive in the market.
This buoyant atmosphere was largely fueled by the dovish commentary emanating from Federal Reserve officials following the conclusion of the central bank’s March meeting. The Federal Open Market Committee (FOMC) revealed its latest dot-plot, which indicated projections for three interest-rate cuts in 2024. Notably, these projections were in alignment with the expectations outlined by traders, as evidenced by data from the CME FedWatch Tool.
However, amidst the backdrop of the market’s overall optimism, bitcoin exchange-traded funds (ETFs) faced considerable headwinds during the week. These ETFs, which represent an accessible avenue for investors to gain exposure to the cryptocurrency market, encountered their most challenging week since their inception at the beginning of the year. Data compiled by Fundstrat revealed a concerning trend, with bitcoin ETFs recording four consecutive days of outflows totaling a substantial $836 million for the week.
This significant outflow from bitcoin ETFs may signal a broader shift in sentiment or investor apprehensions within the cryptocurrency market, particularly in contrast to the robust performance observed in traditional equities. While the stock market continues to enjoy a period of strength and resilience, the challenges faced by bitcoin ETFs serve as a reminder of the inherent volatility and uncertainties inherent in the cryptocurrency landscape.