Tariff Chaos Crashes Stocks: Can Crypto Survive the Fed’s Next Move?
Dow falls 390 points as Trump’s tariffs spark trade fears. Will Fed’s May 7 meeting lift Bitcoin or deepen the crypto dip?
Tariff Chaos Crashes Stocks: Can Crypto Survive the Fed’s Next Move?
The stock market stumbled on May 6, 2025, with the Dow Jones Industrial Average dropping 390 points, or 0.95%, to 40,829, as reported by crypto.news. The S&P 500 fell 0.77%, and the Nasdaq slid 0.87%, driven by fears over President Trump’s tariff plans, including a 10% universal import levy. With the Federal Reserve’s May 7 meeting looming, investors are anxious about how these tensions might impact cryptocurrencies like Bitcoin ($BTC). Here’s what’s going on and what it means for crypto.
What’s Happening?
Trump’s tariff threats, including steep duties on Chinese goods, have raised concerns about inflation and slower global trade, souring investor sentiment. The Fed’s two-day meeting, expected to keep rates at 4.25%–4.5%, adds uncertainty, with Chair Jerome Powell’s comments likely to sway markets. Bitcoin dipped slightly to around $92,500, but its year-to-date drop of 10% outperforms the Nasdaq’s 16% decline, hinting at resilience. Posts on X reflect trader caution, with some seeing $BTC as a hedge against economic turmoil.
Trump’s tariff threats, including steep duties on Chinese goods, have raised concerns about inflation and slower global trade, souring investor sentiment. The Fed’s two-day meeting, expected to keep rates at 4.25%–4.5%, adds uncertainty, with Chair Jerome Powell’s comments likely to sway markets. Bitcoin dipped slightly to around $92,500, but its year-to-date drop of 10% outperforms the Nasdaq’s 16% decline, hinting at resilience. Posts on X reflect trader caution, with some seeing $BTC as a hedge against economic turmoil.
Why It Matters
Tariffs could raise costs, hitting stocks and riskier altcoins hardest. Bitcoin, however, is increasingly viewed as a safe haven, like gold, which hit record highs. A dovish Fed signal—hinting at rate cuts—could boost $BTC toward $100,000, as some predict. But a hawkish stance, addressing tariff-driven inflation, might pressure crypto prices, especially if stocks keep falling. The Fear & Greed Index at 39 shows market unease, yet $38.8M in Bitcoin ETF inflows suggests institutional interest persists.
Tariffs could raise costs, hitting stocks and riskier altcoins hardest. Bitcoin, however, is increasingly viewed as a safe haven, like gold, which hit record highs. A dovish Fed signal—hinting at rate cuts—could boost $BTC toward $100,000, as some predict. But a hawkish stance, addressing tariff-driven inflation, might pressure crypto prices, especially if stocks keep falling. The Fear & Greed Index at 39 shows market unease, yet $38.8M in Bitcoin ETF inflows suggests institutional interest persists.
What’s Next?
Powell’s tone today will be critical. A nod to easier policy could spark a crypto rally, but ongoing trade war fears or high rates may deepen the dip. Investors should monitor $BTC’s $90,000 support level and diversify.
Powell’s tone today will be critical. A nod to easier policy could spark a crypto rally, but ongoing trade war fears or high rates may deepen the dip. Investors should monitor $BTC’s $90,000 support level and diversify.
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The information provided on trafy.io does not constitute investment advice or recommendations. All investment and trading activities involve risks, and readers are advised to conduct their own research before making decisions.
NOTICE:
The information provided on trafy.io does not constitute investment advice or recommendations. All investment and trading activities involve risks, and readers are advised to conduct their own research before making decisions.
