Risk-Off Sentiment Dominates a Volatile Week for Digital Assets

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Last week Wall Street indexes saw a broad rally on Friday, with the S&P 500 rising 0.6%, the NASDAQ Composite gaining 0.4%, and the Dow Jones Industrial Average climbing 0.7%. This positive momentum was fueled by the core PCE price index data for August, which showed a 0.2% monthly and 2.9% annual increase, both in line with expectations. The stable inflation reading solidified investor bets on future Federal Reserve easing, with markets now pricing in a 90.8%probability of a rate cut in October and a 63.8% chance for an additional cut in December. Although the annual inflation rate remains above the Fed's 2% target, the data was seen as constructive because it suggested that factors like trade tariffs had not caused an unexpected price spike, giving policymakers more room to proceed with their anticipated rate reductions. However, despite Friday's strong finish, it wasn't enough to turn the tide for the week, as all three major indexes ended with losses. The weekly downturn was primarily caused by an earlier sell-off in technology stocks, which had pulled the markets down from their recent record highs.