Stocks and Crypto Face Volatility as The Fed Holds Rates Steady

JAKARTA — Market participants are bracing for a prolonged period of high interest rates in the United States, as the Federal Reserve shows no immediate signs of pivoting. This hawkish outlook is casting a shadow over both stock and cryptocurrency markets, creating a challenging environment for investors globally.

The growing consensus that the Fed will maintain higher rates longer than anticipated stems from recent US inflation data. The Personal Consumption Expenditures (PCE) Price Index—the Fed’s preferred inflation gauge—climbed to 3.8% annually in April 2026, up from 3.5% the previous month. Furthermore, the Core PCE, which excludes volatile food and energy costs, rose to 3.3%, marking one of the highest levels in nearly three years.

Reku analyst Fahmi Almuttaqin noted that this data has significantly rattled global investor sentiment. According to Fahmi, market expectations for interest rate cuts have been pushed further into the future, a shift underscored by the rising yields on US government bonds.

“High inflation, geopolitical dynamics in the Middle East, and the impact of new US trade tariffs are beginning to create substantial pressure on risk assets, including technology stocks and the crypto market,” Fahmi stated on Saturday (May 30, 2026).

Tech Sector Resilience and Market Rotations

While the AI-driven rally in the US tech sector continues to be a primary magnet for investment, bolstered by robust digital infrastructure spending and corporate expansions, the tide may be turning. The rising cost of capital is beginning to weigh on high-growth stocks that have fueled Wall Street’s momentum over the past two years.

While AI giants like NVIDIA, Microsoft, and Palantir Technologies remain at the center of investor interest, climbing US Treasury yields are triggering a strategic rotation of funds into more defensive sectors. Conversely, electric vehicle stocks like Tesla are facing headwinds from cooling consumption and high borrowing costs, while highly leveraged companies are struggling with more difficult debt refinancing conditions.

Fahmi also highlighted the intensifying speculation surrounding a potential SpaceX IPO. The surge in SpaceX’s valuation in private markets reflects a broader appetite among global investors for strategic sectors such as AI, satellite technology, defense, and space infrastructure.

“If the SpaceX IPO materializes in the coming weeks, it could become one of the largest public offerings in modern market history and may temporarily draw significant liquidity away from other tech sectors,” he explained.

Navigating Global Macro Sensitivity

Fahmi emphasized that global markets are currently in a phase highly sensitive to every piece of US economic data. He outlined two primary scenarios for the future: if inflation remains sticky and the Fed maintains its hawkish stance, both stocks and cryptocurrencies could face further corrections due to global liquidity constraints. However, if inflation begins to ease in the coming months, markets could enter a new expansionary phase, fueled by the AI boom, institutional crypto adoption, and expectations of monetary easing.

For Indonesian investors, these trends underscore the deep interconnectedness of the global economy. Movements in the rupiah, US bond yields, American inflation, Wall Street tech stocks, and Bitcoin prices are now tightly woven into a single macroeconomic ecosystem.

“In a phase like this, disciplined risk management and the ability to interpret shifts in global liquidity flows are far more important than simply chasing short-term market trends,” he concluded.

Disclaimer: This article is for informational purposes only and does not constitute financial advice to buy or sell any assets. Investment decisions are the sole responsibility of the reader. Bisnis.com is not liable for any losses or gains resulting from investment decisions made based on this information.