Stocks, Cryptocurrencies Dive As Fear Of New Interest Rate Hikes Mounts

Major indexes are down this week after minutes from the latest FOMC meeting revealed that most Fed governors support raising interest rates even further before the end of the year.

Some fragmentation within the board began to appear in the July meeting that took interest rates to between 5.25%-5.5%. Certain members stated they would support further rate pauses, breaking away from the unanimity of opinion that marked the first meetings in the wave of rate hikes that started in March 2022.

The S&P 500 lost 2% this week and the Dow Jones gave back 2.2%. The Nasdaq is down 2.29%.

Fed talks also affected the cryptocurrency sphere. Bitcoin BTC/USD lost more than 11% over the last five days, with a marked drop Thursday evening. Ethereum ETH/USD also plunged, losing 9.94% of its value by Friday.

Analysts pointed to a large sell-off of Bitcoin by Elon Musk's SpaceX on Thursday as one of the reasons leading to the drop.

A filing for bankruptcy by Chinese property giant Evergrande also disrupted both the equity and crypto markets.

Walmart WMT lost 2.44% of its value this week although the company beat the analyst consensus estimate on revenue, which was up 5.7% year-on-year in its second-quarter earnings report. Although positive performance allowed management to raise its outlook for the rest of the year, investors continue to respond to the general trend of volatility with the retail giant. Retail competitor Target TGT lost 0.6% of its value this week. As opposed to Walmart, Target's online sales fell last quarter, while missing analyst expectations and slashing its outlook in the latest earnings report. 

While Target's losses are not as significant this week as Walmart's, the larger picture tells a different story. Walmart is up 6% in the last six months, while Target is down a whopping 21%.

Bank stocks also dropped this week as credit rating agency Fitch Ratings warned that a potential dip in the industry's rating would cause the firm to review the ratings of specific banks, including possible downgrades for JPMorgan Chase JPM, which was down 3% on the week.

Hawaiian Electric Industries, Inc. HE, which is the largest supplier of electricity in the island state, lost 31.15% of its stock value this week as suspicions arose that the company might be behind a devastating fire in Maui that took the lives of at least 111 people.

Cisco Systems Inc CSCO is one of the exceptions this week. Shares are up 2.3% after the company's quarterly call beat expectations on revenue and earnings, and management communicated a rebound in product orders, possibly led by AI enthusiasm.

What to watch: Some high-profile companies continue to report quarterly earnings next week. Zoom Video Communications Inc ZM will post on Monday, Lowe’s Companies Inc LOW on Tuesday and Nvidia NVDA will do so on Wednesday. Software company Inuit Inc INTU will report on Thursday.

Next week will also shed light at the state of the real estate market, with reports of existing home sales for the month of July coming out on Monday, and new home sales on Wednesday.

Investors should keep an eye out for Fed Chair Jerome Powell's speech on Friday morning, which will likely affect the course of the market for that day.