Will Powell's speech today trigger a market rally? Analyzing multi-asset correlated movements

FOMC Rate Cut Expectations Change, Global Markets Await

Tonight at 22:00 Eastern Time, Federal Reserve Chair Jerome Powell will speak at the Jackson Hole Symposium. The market generally expects this speech to signal a hawkish stance, further dampening investors’ hopes for a rate cut within the year. Data best illustrates the point—the CME FedWatch Tool shows the probability of a Fed rate cut in September has plummeted from 90% a week ago to around 70%, triggering a chain reaction across global assets.

US Dollar Strengths Takes Center Stage, Yen Under Pressure

The shift in Fed policy expectations has directly boosted the US Dollar Index. USD/JPY(USD/JPY) latest quote is 148.72, up 0.24%. The logic behind this is clear: expectations of sustained high US interest rates increase the dollar’s attractiveness, while the Bank of Japan’s rate hike prospects remain uncertain (overnight index swap data shows only a 52% chance of a rate hike in October), making the yen relatively pressured. Analysts point out that in this cycle, US policy moves are more dominant than the Bank of Japan’s measures.

Precious Metals Under Pressure, Gold May Break Key Levels

Another casualty of the dollar’s strength is gold. As of press time, gold prices have fallen 0.23% to $3,331 per ounce. The market consensus is that if Powell’s remarks further reinforce hawkish expectations, gold could continue to decline below $3,300 per ounce. However, on the flip side, if Powell signals a policy shift, the dollar may face a sell-off, potentially benefiting gold’s rebound.

US Stock Futures Slightly Up, Tech Stocks Diverge Significantly

Ahead of the August 22 market open, the three major stock index futures showed modest gains. Dow futures rose 0.32%, S&P 500 futures up 0.25%, Nasdaq 100 futures up 0.21%. However, individual stocks showed mixed performance—NVIDIA(NVDA) fell 1.10% due to supply chain adjustment news (the company requested some component suppliers to suspend H20 chip production), while Tesla(TSLA) rose 0.50%, relatively resilient.

Bitcoin at a Critical Moment: Will Powell’s Speech Catalyze a Breakout?

The crypto market is also holding its breath. Bitcoin(BTC) is currently quoted at $87,300, oscillating amid market uncertainty about the Fed’s policy direction. Technically, if Bitcoin can close above $115,000 (referencing the original support level), it may have room to move higher. Conversely, a drop below $112,000 would target the next support levels at $110,000 and $108,250. Powell’s wording in today’s speech will be a key variable in determining the short-term direction of crypto assets.

Key Point: Tonight’s Powell speech is a “crossroads” for US stocks, forex, precious metals, and crypto assets. Hawkish comments will continue to strengthen the dollar and pressure gold and safe-haven assets; dovish turn could trigger reverse volatility across various assets. The market has priced this in advance; whether the speech exceeds expectations will be crucial in shaping subsequent trends.