Ndax Wealth: Market Report May 20

Hotter inflation data drove the sharpest move higher in U.S. interest rates since 2007. Bitcoin pulled back from above $80,000 USD to around $76,700 USD, equities sold off in expensive tech names, and the Senate Banking Committee advanced the CLARITY Act in a bipartisan vote. 

The pullback: Bitcoin retraced to near $76,700 USD after hotter CPI and PPI data and a stronger dollar drove a sharp repricing in rates. Spot Bitcoin ETFs saw their first meaningful weekly outflows since January, more than $800 million USD in long liquidations hit a 24-hour stretch, and the Crypto Fear and Greed Index fell from 73 to 26 in a week.

Beneath the surface, corporate treasury buying continued at scale and the Senate Banking Committee advanced the CLARITY Act in a bipartisan vote. The 21Shares Hyperliquid ETF launched, and stablecoin settlement on networks such as Tron continued to expand.

What to watch: Whether Bitcoin can stabilize above the $76,000 USD region, and Nvidia's earnings release on Wednesday, May 20, which has become a cross-market catalyst for AI-linked digital asset narratives. 

The repricing: April CPI surprised at 3.8% year-over-year, the highest since May 2023, and PPI recorded its largest monthly gain since early 2022. The 10-year yield climbed above 4.65%, the 30-year reached levels not seen since 2007, and Kevin Warsh was confirmed as the next Federal Reserve Chair.

The bigger picture: Economic activity has not weakened enough to offset inflation concerns, an environment many participants now describe as stagflationary rather than recessionary. The FOMC minutes are due May 20, with flash PMI and employment data also on the radar. 

From record to repricing: The S&P 500 briefly surpassed 7,500 and the Dow reclaimed 50,000 earlier in the week before hotter inflation and rising yields triggered selling in expensive tech and semiconductor names. Both indexes retreated from record highs as investors reassessed equity risk premiums against a higher cost of capital.

Nvidia's earnings release after the close on Wednesday, May 20, is the next major focus. Options markets are pricing one of the largest single-stock post-earnings moves in history, with sector rotation into more defensive areas like healthcare and staples already evident. 

In rates and FX: The U.S. 30-year yield climbed above 5.18%, its highest since 2007, while the 10-year pushed past 4.65% on persistent inflation and reduced confidence in near-term easing. The dollar strengthened alongside rising yields, pressuring gold and risk-sensitive assets.

Energy and gold: Brent crude traded between $107 USD and $110 USD per barrel and WTI hovered above $102 USD as Strait of Hormuz tensions supported a geopolitical risk premium. Gold softened despite the inflation backdrop, with rising real yields and dollar strength outweighing safe-haven demand. 

• Senate Banking Committee advances the CLARITY Act in a bipartisan vote. (Bloomberg)
• SEC nears tokenized equity exemption. (Bloomberg)
• Iran launches Bitcoin-backed shipping insurance. (Bloomberg)
• Strategy announces $1.5 billion USD convertible note repurchase. (CoinDesk) 

With Bitcoin retracing from multi-month highs, interest rates moving sharply higher, and Nvidia earnings approaching, volatility has expanded across asset classes. Whether you're looking to add exposure or manage risk, our OTC desk can help you move efficiently. Please reach out any time for more information about trading or available services.