The Fed Hiked | Wall Street Fell 631 Points | CLARITY Died | Bitcoin Holds Near $77K

The Fed delivered its first rate hike since 2023. The harder message came after it.

Rates rose 25 basis points to 3.75% to 4.00% in a unanimous vote. The Dow fell 631.21 points, or 1.21%, to 51,461.90. The S&P 500 lost 0.45% to 7,551.81, while the Nasdaq slipped just 0.01% to 25,978.42.

Stocks had been higher before the decision. They turned lower when Chair Kevin Warsh said recent inflation data show no clear improvement. The dot plot added pressure, with 16 of 18 officials expecting at least one more hike this year.

Financials led the decline. Goldman Sachs (GS) fell 3.96%, JPMorgan (JPM) lost 1.01%, and the financial sector dropped 2.4%.

Asia had rallied before the decision. Japan’s Nikkei gained 0.69% to 63,923, while South Korea’s Kospi rose 1.37%. U.S. futures point higher this morning, with S&P 500 futures up 0.56%, Dow futures up 0.67%, and Nasdaq futures up 0.54%.

Darden (DRI) reports before the open. FedEx (FDX) and Lennar (LEN) follow after the close, giving markets fresh reads on spending, freight and housing.

The Signal

The Fed hiked and warned of more. Futures are higher anyway. That gap is Thursday morning’s first test.

The hike was priced. The dot plot was not.

Goldman Sachs had expected only a narrow 10-8 split in favor of another 2026 hike. Instead, 16 of 18 officials expect at least one more move this year.

Markets now put roughly 50% odds on another hike in October.

The bond market is adjusting. The 2-year yield reached its highest level since 2024, while the 10-year crossed 5% before settling near 4.998%.

Wells Fargo cut its year-end S&P 500 target to 7,700 from 7,950. It also cut technology to equal weight and raised healthcare to overweight, citing high valuations and risks to data-center spending.

Macro Signal

The first hike was expected. The path was not. October is now a live meeting, and the 10-year near 5% keeps the pressure on every rate-sensitive asset.

Oil is falling, but the inflation shock has already reached the Fed.

Brent slipped to $104, while WTI traded near $100. Saudi Arabia may restore about half the capacity of its damaged East-West pipeline within days, with full operations expected within six weeks.

The pipeline gives Saudi crude a route around Hormuz. U.S. Energy Secretary Chris Wright said 18 million barrels of crude and petroleum products moved through the Strait this week with U.S. military support.

U.S. crude inventories fell by 640,000 barrels, while earlier private data had pointed to a 7.1 million barrel build.

Brent is still up 16% over the past month and 57% from a year ago. That energy shock has already fed the inflation readings Warsh used to support Wednesday’s hike.

Energy Signal

Oil is easing on repair hopes, not a full resolution. The inflation it created is already part of Fed policy.

The AI spending cycle is still running against higher rates.

SpaceX (SPCX) rose 5.15% Wednesday to $150.88, its second straight gain. Starship’s 14th test flight is set for September 22, with another Starlink deployment and booster-catch attempt planned.

Oracle (ORCL) gained 2% to $143.16. Goldman Sachs estimates hyperscaler AI spending will reach about $800 billion this year and $1.2 trillion in 2027.

That scale helps explain why a 25-basis-point hike has not stopped AI investment. The larger risk is the long end. A 10-year yield near 5% raises the cost of every future dollar of growth.

Financials are feeling that pressure first. Housing gets its test tonight when Lennar reports.

Capital Signal

AI spending is not stopping for one hike. The question is how long a 5% 10-year can stay beside a trillion-dollar capex cycle.

Bitcoin trades near $77,000 after losing both a policy catalyst and easy money in the same week.

The CLARITY Act failed 49-50 Tuesday, short of the 60 votes needed to advance. Polymarket odds of passage in 2026 have collapsed from 82% in February to roughly 7%.

The reaction reached flows. U.S. spot Bitcoin ETFs lost $450 million on the day of the vote, while $570 million in leveraged crypto longs were liquidated.

XRP fell more than 7% toward $1.29. Bitcoin’s Coinbase premium also dropped to a one-month low, pointing to weaker U.S. spot demand.

Zcash moved the other way. ZEC is up roughly 130% over the past month as holders backed changes aimed at faster transactions and a Bitcoin-style halving schedule.

Institutional infrastructure is still moving. Circle (CRCL) launched its Arc blockchain, while Deutsche Bank is nearing the launch of a crypto custody service for institutional clients.

The Verdict

Congress stopped. Crypto infrastructure did not. Bitcoin is paying for the policy setback while institutions keep building around it.

Thursday opens with policy and capital moving at different speeds.

The Fed hiked and signaled another move. The 10-year sits near 5%, yet AI spending is still headed toward $1.2 trillion in 2027.

Crypto has the same split. CLARITY failed, Bitcoin ETF flows turned sharply negative, and leveraged longs were cleared. Yet Circle and Deutsche Bank continue building the rails for institutional use.

Oil adds the final link. Brent remains near $104 even as Saudi repair hopes grow, keeping an inflation input inside the Fed’s next decision.

October is now live. CLARITY is stalled. Bitcoin sits near $77,000.

Policy is tightening.

Capital is deciding where it can keep moving.