Jerome Powell Hints at Rate Cuts: Wall Street and Bitcoin Rise Sharply

American stocks surged on Friday after Powell signaled that interest rate cuts could be considered, providing investors with new optimism after weeks of pressure in the market. The speech on policy changes at Jackson Hole not only boosted the stock market but also spread to the crypto market, where Bitcoin experienced strong growth. The Dow Jones Industrial Average rose 732 points, or 1.6%, closing at 45,512.25. The S&P 500 increased by 1.2%, while the Nasdaq Composite rose nearly 1.3%. According to CME's FedWatch tool, traders quickly predicted a 91% chance that the Fed will cut interest rates by 0.25 points in September. Powell acknowledged that although the unemployment rate remains at a record low, monetary policy is now in a "restrictive zone." He emphasized the shifting risks to the Fed's dual mandate of price stability and full employment, while also pointing out the broad changes in tax, trade, and immigration policy that could affect growth and inflation. The prospect of cutting down the whales has driven the shift in the market, as investors pivot from large-cap tech stocks to small-cap and value stocks. Despite the gains in Friday's trading session, the S&P 500 and Nasdaq still fell by 0.9% and 2% this week, while the Dow Jones managed to maintain a gain of 0.3%. The crypto market also reacted positively to Powell's statements. Bitcoin briefly reached the $113,000 mark, rising over 2% on the day, as traders bet that a more lenient monetary policy could rejuvenate the flow of investment from institutions into digital assets. Analysts believe that lower interest rates reduce the attractiveness of bonds and cash, making Bitcoin and other cryptocurrencies more appealing as alternative value storage channels. Ethereum and Solana also saw slight increases at the end of the trading session, with market sentiment improving after a volatile August. The relationship between monetary policy and digital assets has become tighter in recent years, as many investors view Bitcoin as a macro asset with a high beta coefficient. If Powell's dovish stance leads to interest rate cuts in September, it could reinforce the view that Bitcoin thrives in a liquidity-based environment, potentially setting the stage for another price surge in the ongoing bull cycle.