Recently, the U.S. stock market has fallen for three consecutive days, and this sentiment has also spread to the Crypto Assets sector. Although the fall in the Crypto Assets market is relatively limited, the market seems to be in a peculiar situation: good news is instead viewed as bad news. The fundamental reason for this phenomenon lies in the market's continued cooling expectations regarding the Fed's interest rate cuts.

Over the past three days, multiple factors have triggered a market correction. First, Fed Chairman Powell indicated that stock valuations might be too high, sparking a risk-averse sentiment among investors. Second, new home sales data unexpectedly rose, which the market interpreted as a signal that the economy might be overheating. Finally, the number of initial jobless claims fell to its lowest level this year, further strengthening expectations of economic resilience, leading to continued falls in the US stock market.

These economic data, which should have been viewed as positive, are interpreted by the market as unfavorable factors. The reason is that strong economic data may slow down the Fed's pace of interest rate cuts. The previously widely expected timetable for interest rate cuts may need to be reassessed, challenging the earlier upward momentum based on this expectation.

The upcoming Personal Consumption Expenditures (PCE) data will be an important indicator for the market. If the month-on-month data falls back, it may alleviate the market's selling pressure; however, if the year-on-year data remains high, it may further suppress expectations for interest rate cuts. Currently, the market's expectation probability for the Fed not cutting rates in October has risen from 10% to 15%, and it could quickly increase to 50% to 60%, which may amplify the potential fall in the market.

Overall, the current market correction is mainly due to adjustments in sentiment, as the previous rise may have overly reflected expectations of interest rate cuts. This short-term cooling period should be seen as a normal adjustment process for the market. For Crypto Assets investors, maintaining a cautious outlook and appropriate risk control remains a wise choice. During this period of uncertainty, closely monitoring macroeconomic indicators and policy trends will help to better grasp market movements.