Bitcoin has turned around and hit a session high, up 4% to $22,000.
It's often been a good leading indicator for sentiment in stock markets, particularly in tech stocks. Money is also flowing into meme stocks and stocks tied to AI as dip buying takes place.
It comes back to the question: What's more important? A strong economy or low interest rates?
Rates are powerful and low rates have fueled incredible returns in risk assets despite a mediocre economy but the market may still have work to do in pricing out a recession. Moreover, if the Fed hikes rates to 5.50%, that's seen by some as 550 basis points of ammunition for the next downturn -- a substantial cushion and a huge Fed put. That's doubly true for those who are convinced that the AI revolution will be deflationary.
So it's not a surprise to see the AI names leading here with NVDA up 3%.
