The crypto market sees a sharp correction as the U.S. stock market waves some concerning red flags.
After reaching an all-time high on March 28, the S&P 500 has faltered, slipping below the 5,150-point threshold on April 12. Bitcoin (BTC) price has also reacted negatively within the same timeframe so it makes sense to analyze if the drivers for the stock market correction also apply to cryptocurrencies.
The S&P 500 index's 2.9% dip from its peak of 5,333 may appear modest, but it marks the first time in four weeks that the U.S. stock market index has traded below 5,120. Persistently high inflation has led investors to doubt the Federal Reserve's (Fed) ability to lower interest rates effectively throughout 2024.
On April 12, major U.S. financial institutions such as JPMorgan and Wells Fargo reported a 4% drop in quarterly net interest income. This figure represents the difference between what banks earn on their assets and what they pay to customers. This issue mirrors the challenges smaller banks faced in 2023, as noted by Yahoo Finance.
