Live updates: Bitcoin edges above $64,000 as Fed holds policy steady

Meta (META) minutes ago reported second-quarter EPS of $6.18 versus Street estimates of $7.14. Revenue of $60.8 billion topped forecasts for $60.4 billion.

The mid-point of third-quarter revenue guidance of about $63 billion was in-line with estimates.

The company lifted the lower end of full-year AI-related capex spending, now seeing $130 billion-$145 billion versus $125 billion-$145 billion previously.

Shares are lower by 5.4% in after-hours trading.

The ten-year Treasury yield has jumped 5.5 basis points to 4.66% after the Fed left overnight rates steady. At the same time, the two-year yield has slid six basis points to 4.22%

The action shouldn’t be surprising, given that many had placed bets the Fed might hike rates today. The unwind of those bets would likely pressure two-year rates.

Still, other things being equal, a steepening yield curve could be read as markets baking in a rate of inflation higher than previously thought.

U.S. stocks, meanwhile, after briefly moving into positive territory, have resumed lower, with the Nasdaq down 0.6% and the S&P 500 off 0.75%.

Bitcoin too has given up its knee-jerk gain, now trading just below $64,000, up 0.45% over the past 24 hours.

Fed chairman, Kevin Warsh said this week’s policy meeting — which resulted in three dissents from the vote to hold rates steady — included a “robust” discussion.

Asked about the recent sharp rise in yields, Warsh said the Fed is observing that move, but trying to stay out of it. “Even if we haven’t done much, markets have quite a bit.”

The Federal Reserve left its benchmark fed funds rate range unchanged at 3.50%-3.75% on Wednesday, extending its pause for a sixth consecutive meeting as policymakers continue to grapple with stubborn inflation.

The price of bitcoin BTC$84,117.13 rose modestly immediately after the decision, now up 1.25% over the past 24 hours to $64,500. U.S. stocks have narrowed losses, the Nasdaq is now down just 0.1% after being lower more than 1%.

The decision came after one of the most uncertain pre-meeting setups in years. Futures markets had assigned roughly a 65% probability to a hold and 35% odds of a quarter-point increase, according to CME FedWatch data.

It was an unusual setup, as for years, the Fed had typically tried to communicate to markets the direction it was going to take on policy.

There were three dissents from the vote to hold steady, with nine voting in favor.

Attention now turns to Chair Kevin Warsh's post-meeting press conference. Warsh has been openly critical of the Fed's traditional use of forward guidance and the quarterly "dot plot," and investors will be watching closely for signs that the central bank's communication strategy is changing under his leadership.

Morgan Stanley executives say tokenization could be the technology that brings digital assets to a broader group of investors. During a panel discussion, Denny Galindo, investment strategist for Morgan Stanley Wealth Management, said tokenized products are gaining momentum and could become the first exposure many investors have to blockchain-based finance.

"I think we're going to see a lot of mainstream impact from something tokenized that people can buy that they used to have a hard time getting access to," Galindo said. "That'll probably be the first way crypto reaches people who aren't thinking about it all the time."

Galindo also said many investors have stopped at bitcoin BTC$84,117.13, but growing access to ETFs and other digital asset products is creating new opportunities for portfolio construction. He noted that the appropriate allocation depends on whether investors view bitcoin as digital gold, a venture-style investment or a portfolio diversifier, underscoring the need for education as digital asset offerings continue to expand.

An early attempt at a revival of the AI momentum trade has faded about an hour into Wednesday’s session.

Familiar former favorites like SanDisk, Micron, AMD, Applied Materials and KLA Corp. are lower by 3%-6%, while Nvidia is down 2.4%. The VanEck Semiconductor ETF (SMH) is down 2.5% today and nearly 20% month over month.

“Everyone owned some version of the AI momentum trade and many were slow to react to the rollover in AI winners and hardware,” said Goldman Sachs following yesterday’s carnage. “The last few days have seen multiple-sigma moves across long/short books without much movement in the broader indices. This is much more a deleveraging and de-grossing event than a macro one.”

The broader Nasdaq is down just 0.8% as Microsoft, Meta, Google, and Amazon trade closer to unchanged.

Bitcoin remains higher by nearly 2% over the past 24 hours at $64,300.

Speaking with Fox News minutes ago, President Trump said Iran will be hit hard in response to last night’s missile attack on U.S. forces in Jordan.

Oil extended a 4% rise to nearly 7% following the comments, now trading at $84.63.

Nasdaq 100 futures slipped about 0.5% and are now down 0.2%.

Bitcoin has edged lower, but remains higher for the day at $64,200.

In what’s being described as a “surprise attack” in the WSJ, U.S. forces in Jordan were fired upon by missiles overnight.

The missiles were reportedly intercepted and caused no damage.

WTI crude oil surged 4.3% to $82.68 on the news, but broader markets appear mostly unaffected.

U.S. stock index futures are pointing to small opening gains, and bitcoin is sporting a 1.5% advance to $64,400.

Today’s main event is the Federal Reserve rate decision, and markets are leaning to the U.S. central bank staying on hold, but have priced in about a 35% chance that Kevin Warsh and team will surprise with a 25 basis point rate hike.

South Korea’s benchmark equity index, Kopsi, dropped 6% Wednesday, deepening the bear market that began after it hit a peak of 9,385 points on June 19. Since then, it has crashed by nearly 40%.

The massive decline has been led by heavy slumps in shares in Samsung Electronics and AI-linked chip maker SK Hynix. AI related stocks have recently fallen out of investor favor worldwide as investors question valuations.

Some analysts believe that capital outflows from overheated AI trades could potentially find their way into the crypto market.

“As the AI trade gets repriced, bitcoin may capture some of the value,” 10x Research said on X. “Korea's Kospi just dropped 42%, dragged down by the same AI-trade tech names driving private LLM valuations. If that correlation holds, Anthropic and OpenAI are due for a serious repricing, and the reason isn't demand, it's commoditization.”

Bitcoin’s annualized 30-day implied volatility index, BVIV, the so-called fear gauge, continues to hover below 40%, well below highs above 60% seen during the early June and early February price sell-offs.

The index is influenced by demand for options, or hedging instruments.

So, the low reading indicates limited demand for protective options and suggests traders see little reason to brace for sharp price swings in the near term.

This stability contradicts the uncertainty surrounding Wednesday’s Fed rate decision. While most observers expect the bank to keep rates unchanged, some, including hedge fund giant Citadel, expect a hike in borrowing costs.

The CME’s FedWatch tool now assigns roughly a 35% probability to a rate hike at the upcoming FOMC meeting, an unusually high level of uncertainty for this late in the decision cycle. Fed moves are normally almost fully priced for a single outcome – hold, hike, or cut – by this stage.