Crypto Market, S&P 500 Rally as PPI Data Fuels Rate Cut Hopes

TLDR

Table of Contents

Bitcoin jumped above $114K, hitting a 2-week high after lower-than-expected PPI data.
S&P 500 opened at a record high of 6,550 following strong tech stock gains.
Crypto market cap rose over 2%, reaching $3.91 trillion according to TradingView data.
Market fully prices in a Fed rate cut, with rising calls for a 50 bps cut in September.

Bitcoin surged to a two-week high while the S&P 500 reached another record level after U.S. PPI data came in below expectations. With traders now fully pricing in a Federal Reserve rate cut at the next FOMC meeting, both crypto and equity markets are reacting with optimism. Hopes of a larger-than-expected rate cut are also gaining momentum among economists and investors.

Crypto Market Sees Broad Gains as Bitcoin Breaks Key Level

The total cryptocurrency market cap rose more than 2% today, reaching $3.91 trillion, according to TradingView data. Bitcoin led the rally, climbing past the $114,000 mark, a level not seen in over two weeks. Ethereum followed closely, breaking above $4,400, while BNB also saw a sharp move, hitting a new all-time high above $900.

Other top digital assets, including Solana and XRP, were also in the green, contributing to the broad market rise. Traders are reacting to the softer Producer Price Index (PPI) report, which has raised expectations of a near-term rate cut by the Federal Reserve.

Source: TradingView: Total Crypto Market Cap

Market analysts note that falling inflation could support digital assets if interest rates come down. A rate cut reduces the cost of capital, which could make risk assets like cryptocurrencies more attractive.

S&P 500 Opens at All-Time High, Oracle and NVIDIA Lead Gains

The S&P 500 opened at a record high of 6,550 after closing yesterday at 6,512, also a record. Gains were driven by strong performances from major technology stocks. Oracle led the index with a rise of more than 40%, following a revenue forecast upgrade.

NVIDIA also gained nearly 5%, recording the highest performance among the so-called “Magnificent 7” tech stocks. The overall strength in tech pushed the broader market higher, with all major sectors in positive territory.

Source: TradingView; S&P 500 Daily Chart

Trading volumes were also higher than usual, suggesting strong investor participation. The rally follows the release of the PPI data, which showed that inflation pressures in the production pipeline have eased, increasing expectations for monetary policy easing.

Rate Cut Expectations Grow as Fed Faces Pressure

Following the latest inflation data, the market now fully expects the Federal Reserve to cut interest rates at its upcoming September FOMC meeting. The CME FedWatch Tool shows a 100% probability of a rate cut, with growing calls for a larger move than previously expected.

BlackRock’s Chief Investment Officer Rick Rieder has again called for the Fed to act, saying a cut is needed to support economic growth. Mohamed El-Erian, former CEO of PIMCO, said on CNBC that a 50 basis points (bps) cut is justifiable based on the weakening labor market data.

“Given the jobs data and soft inflation, I’d argue for a 50 bps cut,” El-Erian stated during the interview. He emphasized that current conditions give the Fed room to move more aggressively.

U.S. President Donald Trump also weighed in, urging the Fed to make a “big” rate cut. On Truth Social, he suggested that the central bank should consider a 100 bps cut, following the PPI report.

As the September FOMC meeting approaches, markets will closely watch upcoming data releases and Fed comments. Any shift in the tone from Federal Reserve officials could influence expectations and market movement.

Stay Ahead of the Market with Benzinga Pro!

Want to trade like a pro? Benzinga Pro gives you the edge you need in today's fast-paced markets. Get real-time news, exclusive insights, and powerful tools trusted by professional traders: