Consumer Confidence Drops More Than Expected
U.S. consumer sentiment weakened sharply in September, with The Conference Board’s Consumer Confidence Index falling 6.7 points to 81.9 from 88.6 in August. Economists had expected the index to edge higher to 89.
The September reading was the weakest since April 2014, as higher interest rates and rising gasoline prices weighed on household sentiment.
The Expectations Index also declined, dropping 5.9 points to 63.6. It was the third straight monthly decline in the gauge.
Dana Peterson, chief economist at The Conference Board, said confidence had deteriorated notably in September following weaker readings over the previous two months.
Consumers’ assessment of current business conditions turned negative for the first time since September 2024. Views of current labor-market conditions also weakened, although they remained positive.
Looking ahead, consumers expect both business conditions and labor-market conditions to deteriorate over the next six months. They still expect household incomes to increase, but their income outlook has become less positive than in recent months.
On Polymarket, contracts indicating a Democratic sweep of both chambers of Congress were trading near a contract high of 62%. Contracts tied to a Republican sweep stood at 8%.
Job Openings Decline in August
U.S. job openings fell to 7.079 million in August, down from 7.335 million in July and below the 7.23 million economists had expected.
The JOLTS report is considered a lagging indicator, but the latest decline offered one of the clearest recent signs of weakness in the labor market.
The next major labor-market release comes Friday with the September Nonfarm Payrolls report. Economists expect 129,000 jobs to have been added, while the unemployment rate is projected to remain at 4.1%.
Oil Prices Retreat
WTI crude declined more than 3% over the past 24 hours, moving toward $90 a barrel after trading near $106 in mid-September.
Since the war in the Middle East began in February, WTI has spent much of the year between $70 and $100 a barrel.
Bitcoin Futures Leverage Falls
Bitcoin futures open interest has fallen to a year-to-date low of 628,000 BTC, compared with 763,000 BTC at the beginning of August, according to CoinGlass.
At that time, Bitcoin was trading near $63,000 before advancing to a high of $87,500 in mid-September.
The decline in open interest means traders are entering the fourth quarter with less leverage. Retail participation also remains muted, even as Bitcoin approaches a quarter that has historically produced some of its strongest gains.
Bond Market Draws Fresh Buying Interest
Jim Bianco, founder of Bianco Research, said he views the current bond market as a value opportunity and plans to keep buying if yields move higher.
Bianco said the prevailing bearish sentiment toward bonds is creating a substantial cushion for investors buying at yields around 5.2%.
The duration of the WisdomTree Bianco Total Return Fund, which Bianco oversees, has risen above six years. That compares with 5.7 years for the Bloomberg U.S. Aggregate Bond Index.
Bianco has spent months arguing that the Federal Reserve made a major policy mistake by beginning its easing cycle in September 2024. He has pointed to the subsequent rise in bond yields despite lower short-term rates.
With the Fed now tightening and longer-term yields elevated, Bianco said the environment could be setting up for a bond-market rally.
Credit Spreads Widen
Credit markets are also showing signs of increased caution, with spreads between different grades of corporate debt widening over the past two weeks.
Tight credit spreads had previously been cited by Federal Reserve officials, including Fed Chair Kevin Warsh, as evidence that investors remained confident about the U.S. economic outlook.
Bespoke said that relationship has shifted, pointing to a sizable widening between investment-grade and high-yield bonds.
Australia Delivers Another Rate Hike
The Reserve Bank of Australia raised its cash rate by 25 basis points to 4.60% on Tuesday.
It was the central bank’s fourth increase this year and brought its policy rate to the highest level since 2011. The move came as the Federal Reserve, Bank of Japan and European Central Bank have also raised rates, while bond yields remain elevated across global markets.
Bitcoin Reclaims $84,000
Bitcoin advanced 1% to slightly above $84,200 on Tuesday after finding support near $82,500. The recovery came as the 10-year Treasury yield hovered around 5.25%, following Monday’s move to its highest level since 2007.
Ether gained 2% to nearly $2,720, while DOGE rose 3% and XRP added 2%. BNB, SOL and TRX each gained less than 1%. HYPE declined 1%, while ZEC dropped 9% to around $1,423.
U.S. spot Bitcoin ETFs recorded approximately $31 million in net inflows Monday, while Ether ETFs attracted about $17 million, according to SoSoValue. SOL and XRP funds added a combined $17 million. The only U.S. ZEC fund reported a net outflow of roughly $8 million.
Alex Kuptsikevich, chief market analyst at FxPro, said the cryptocurrency market was attempting to rebound from last week’s low near $2.83 trillion. However, he noted that the market remained in a short-term downtrend while below $2.90 trillion.
Kuptsikevich also cited the stronger U.S. dollar and uncertainty surrounding equities as sources of market pressure. He said Bitcoin had found support around previous highs after its recent rally lost momentum, while sustained positive sentiment could put new multi-month highs above $87,000 in focus.
