Jerome Powell Hints at Rate Cuts – Wall Street and Bitcoin Surge Higher

This year, however, his tone was notably different. Powell suggested that the Fed could soon pivot toward easing, sparking a surge across both traditional markets and cryptocurrencies.

U.S. equities jumped on Friday after Powell signaled that interest rate cuts could be on the table, giving investors fresh optimism after weeks of market pressure. The policy shift talk at Jackson Hole not only lifted stocks but also rippled across the cryptocurrency market, where Bitcoin saw a boost.

The Dow Jones Industrial Average rallied 732 points, or 1.6%, closing at 45,512.25. The S&P 500 climbed 1.2%, while the Nasdaq Composite advanced nearly 1.3%. Traders quickly priced in a 91% chance of a quarter-point cut in September, according to the CME FedWatch tool.

Powell acknowledged that while unemployment remains historically low, monetary policy is already in “restrictive territory.” He highlighted shifting risks to the Fed’s dual mandate of price stability and full employment, pointing to broad changes in tax, trade, and immigration policy that could influence growth and inflation.

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The prospect of rate cuts fueled a market rotation, with investors shifting from megacap technology into small-cap and value plays. Despite Friday’s gains, the S&P 500 and Nasdaq are still down 0.9% and 2% this week, while the Dow managed to hold a 0.3% gain.

Crypto markets also reacted positively to Powell’s remarks. Bitcoin briefly touched above $115,000, adding more than 2.5% in the past hour, as traders bet that looser monetary policy could renew institutional inflows into digital assets. Analysts suggest that lower rates reduce the appeal of bonds and cash, making Bitcoin and other cryptocurrencies more attractive as alternative stores of value. Ethereum and Solana also edged higher in late trading, with market sentiment improving after a choppy August.

The connection between monetary policy and digital assets has grown stronger in recent years, with many investors treating Bitcoin as a high-beta macro asset. If Powell’s dovish tilt results in a September cut, it could reinforce the view that Bitcoin thrives in liquidity-driven environments, potentially setting the stage for another leg higher in the ongoing bull cycle.

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