Introduction
What Jeremy Powell said at the Jackson Hole Economic Symposium sent the market into a tizzy.
His change in tone gave investors hope that interest rate cuts could happen soon.
This analyzes the same event—how Powell’s remarks fueled a massive rally in both cryptocurrency and the stock market.
Key Points
1. Powell’s change in simple words
Powell pointed to weak signals in the labor market, which indicated that interest rate cuts could happen at the next meeting.
This was considered a ‘dovish’ stance, which raised hope in the market.
2. Crypto market reaction on this
Bitcoin reached nearly $116,500, Altcoins like Ethereum and Solana also saw a sharp surge.
Ethereum prices rose by 9-14%.
3. Stock Market Rally
The Dow Jones average jumped 846–890 points to a record high, with the S&P 500 and Nasdaq also gaining sharply.
Investors showed strong interest in tech and rate-sensitive stocks, leading to broad market highs.
4. Interest rate cut expectations
Prediction markets such as the CME FedWatch Tool and Polymarket pegged the probability of a 25 basis point rate cut in September at around 85–90%.
5. Global impact
Apart from the US, European and British indices also saw gains. The dollar weakened, boosting foreign investment.
6. Market analysis and caution
Many analysts described it as a "late-summer rally"—a bullish wave despite volatility.
Some predicted further volatility in September–October.
7. Crypto and stock market correlation
Markets are “correlated”—when stocks rise, crypto often rises as well.
1. What did Powell say?
In a speech at Jackson Hole, Powell spoke of a “curious balance” in the labor market—a slowdown in both workers and jobs—raising fears that jobs were at risk. He also said that current policy could be reviewed, which was a clear signal that interest rate cuts were possible.
2. How were cryptocurrencies affected?
Investment in risk asset ,particularly crypto rose as markets rallied in hopes that financial conditions would ease. Bitcoin, Ethereum, Solana, XRP, and Dogecoin all surged significantly. Ethereum saw a gain of up to 14%, while Bitcoin also rose 4–5%.
3. Stock market rally
The Dow Jones jumped about 846–890 points on a daily basis, with the S&P 500 and Nasdaq also gaining 1.5–1.9%. The rally was particularly driven by technology and rate-sensitive sectors.
4. How did the probability of a cut look ?
CME FedWatch and Prediction Markets put the probability of a 25 basis point cut in September at 85–90%, much higher than in the past.
5. Global reaction
Indices in Europe and the UK also rose following this policy signal, with dollar weakness making a US exit more attractive.
6. Analyst opinion
Some experts called this a "late-summer rally"—a temporary surge that could be seen stagnating or reversing again in September–October.
Conclusion
It is clear that Powell’s Jackson Hole speech raised investors’ hopes, leading to a massive rally in both crypto and stock markets.
This rally was a sign of enthusiasm and risk appetite in the financial markets.
However, it should also be noted that such rallies are often temporary not permanent.The market direction may change again as more data comes in over the next few months.
