Bitcoin and tech stock continue tumbling after strong US GDP data

After Thursday's opening bell, the tech-heavy Nasdaq Composite fell 215.43 points, or 1.246%, to 17,126.98, while the S&P 500 dropped by 21.93 points, or 0.4%. Bitcoin also failed to reverse its near-term downtrend after GDP data showed Thursday that the U.S. economy grew by 2.8% in Q2 2024, beating economist forecasts of a 2% gain.

Inflation pressures, measured by the Personal Consumption Expenditure (PCE) price index, cooled from 3.4% to 2.6%, indicating progress towards the U.S. Federal Reserve’s 2% inflation target.

According to ING Bank economist James Knightly, Friday's month-on-month core PCE print could generate numbers consistent with delivering 2% year-on-year inflation over time. Knightly said that U.S. consumer spending is set to slow in the second half of 2024. "Business surveys certainly point to a weakening outlook with today's numbers not swaying the market from their belief in a September Fed rate cut," he added.

According to the Chicago Mercantile Exchange (CME) FedWatch tool, interest rate traders increased the chances of a rate cut in September to 85.7%.