Investing.com – Take a peek at the top 5 things that rocked U.S. markets this week.
Growing inflation jitters within the Fed's ranks
Federal Reserve policymakers supported the notion that a gradual approach to increasing interest rates will be warranted but concerns grew over the slowdown in inflation, according to the minutes of the Fed's last policy meeting on September 19-20 released on Wednesday.
The minutes showed that a “few” officials urged the central bank to hold off further rate increases until the trend of slowing inflation abated.
Fed members’ concerns over the slowdown in inflation were justified as inflation data on Friday fell short of expectations pressuring both the dollar and U.S. 10-Year as investors questioned the pace of future rate hikes.
Crude oil prices steady above $50
Crude oil prices settled higher for the week on Friday, as investors weighed an expected fall in global oil demand against possible supply disruptions amid unrest in the Middle East.
As was expected, President Donald Trump on Friday decided against certifying the 2015 Iran nuclear agreement, raising the risk of doing business in the Middle Eastern nation.
Under the agreement, Iran agreed to restrict its nuclear programme for at least 10 years in exchange for lighter economic sanctions that had crippled its economy.
Meanwhile, investors monitored ongoing unrest in Iraq following an independence referendum in Iraq’s Kurdistan region last month that threatens to disrupt the operation of a pipeline that carries 500,000-600,000 barrels of crude per day.
Bitcoin hits record highs
Bitcoin’s market cap edged closer to $100bn on Friday after the popular digital currency saw its price jump above $5,900 for the first time ever.
Rumors that China was considering to lift its ban on domestic exchanges was the initial catalyst for the sharp rally. Bitcoin has gained more than 20% since its crash which followed after China decided to ban bitcoin exchanges last month in an effort to clamp down on bitcoin-related activity.
Some analysts noted, however, that the upcoming hard fork in Bitcoin creating the offset ‘Bitcoin Gold’ was an additional reason for the uptick in demand as Bitcoin Gold will be freely distributed to current bitcoin holders.
Bitcoin traded at $5,588, up 2.72%.
US stocks rallied as earnings season got underway
The Dow Jones Industrial Average and Nasdaq Composite raced to a record close Friday on growing investor optimism that third-quarter earnings will beat expectations.
Financials, mainly banks, got the earnings season underway this week as BlackRock Inc (NYSE:BLK), JPMorgan Chase & Co (NYSE:JPM), Citigroup Inc (NYSE:C) and Bank of America Corp (NYSE:BAC) reported earnings that topped expectations.
A slump in fixed-income trading revenue weighed on overall results as volatility over the third quarter remained subdued.
Goldman Sachs Group Inc (NYSE:GS) will carry the earnings baton for financials with an earnings report due next week while Netflix (NASDAQ:NFLX) kicks off earnings for the tech sector with third-quarter results after US markets close on Monday.
Gold got its groove back
Gold prices snapped a four-week losing streak as signs of a continued slowdown in inflation pressured yields and the dollar, lifting sentiment on the precious metal.
Recent data, however, failed to support the turn in sentiment on gold prices as net bullish bets on gold fell to 200,100, according to a report from the Commodity Futures Trading Commission (CFTC) on Friday.
Renewed geopolitical uncertainty could support further upside in gold prices after North Korea revived an earlier threat to strike Guam following ongoing U.S-South Korea military drills.
Gold prices traded at $1,305.40, up 0.69% on Friday.