$470 billion wiped out, Wall Street plunges amid inflation

Panic and crash at the New York Stock Exchange. The day after the Federal Reserve's (Fed) decision to keep interest rates unchanged, the release of the latest Consumer Price Index (CPI) inflation figures dampened the markets. In just a few minutes, over $470 billion in market capitalization evaporated on Wall Street.

In brief

• The CPI inflation index hits its highest level in 4 months, reviving fears of a new rate hike by the Fed.
• Dragged down by a 12% plunge in Alphabet (Google), the stock market is experiencing a massive sell-off of $470 billion.
• Bitcoin remains stable around $80,000, resisting the crash of traditional financial markets.

Inflation (CPI): the numbers behind the Wall Street crisis

The trigger for this stock market drop on Wall Street was the release of official data on the CPI (PCE), the indicator most closely monitored by the Fed to guide its monetary policy. This price shock comes in a tense context as the day before, the Fed announced it would keep interest rates unchanged. However, the CPI inflation figures came in significantly above expectations.

The core CPI inflation index stands at +2.8% year-on-year (compared to +2.6% expected), with a month-on-month increase of +0.3%. Overall CPI inflation rises to +2.7% year-on-year (compared to +2.5% forecast), its highest level in 4 months. These figures immediately reignite fears of high rates. For stock investors, the Fed could halt rate cuts or decide on a new rate hike in December. This triggers panic selling on Wall Street, wiping out $470 billion in stocks.

Google's stock crash masks its crypto project

At the heart of the stock market turmoil, Alphabet (Google) suffers a real crash at the opening of Wall Street with a drop of over 12% in its stock, dragging the rest of the stock market and Nasdaq down due to perceived excessive costs in AI.

|----------------------------|----------------------|-------------------------------------------------------| | Stock / Ticker | Opening Drop | Market Impact (Capitalization) | | Google / Alphabet ($GOOGL) | -12.80% | Drop in the tech sector | | Amazon ($AMZN) | -9.01% | Sharp drop in the e-commerce sector | | Broadcom ($AVGO) | -8.26% | Massive sell-off in chips and semiconductors | | Nvidia ($NVDA) | -6.90% | Heavy sell-offs on the graphics card giant | | Microsoft ($MSFT) | -6.70% | Marked decline in software and Cloud stocks |

Stock indices plummet on Wall Street, data compiled by Cointribune.

However, this drop in Google's stock masks a major announcement for the financial and Web3 market. A few hours earlier, Google unveiled its new crypto custody banking service based on Multi-Party Compute (MPC) technology. This service, already used by Google to secure its own assets on Ethereum and Solana, aims to provide banks with an ultra-secure custody solution against AI-boosted cyberattacks.

Bitcoin at $80,000 resists Wall Street crash

While Wall Street and the stock market collapse, the crypto market shows impressive stability. The price of Bitcoin (BTC) firmly holds above the psychological threshold of $80,000, refusing to yield to the general panic in financial markets. The defense of this zone shows that crypto investors remain buyers.

Moreover, a recent transfer of $500 million in bitcoin to Coinbase Prime signals that major institutional players are closely monitoring the Fed's monetary policy. Therefore, if BTC maintains the $80,000 level amid the Wall Street crash, it will strengthen its role as an alternative safe haven against inflation and the Fed's decisions.

The surge in the CPI inflation index has swept away optimism in the stock market and reignited fears of Fed rates. But in the face of this $470 billion purge on Wall Street, Bitcoin's firmness at $80,000 and Google's entry into crypto custody show that digital assets maintain a solid course despite the financial storm.