Digital Assets Climb Out of Red, Mirroring Gains in Broader U.S. Markets

Stocks and Crypto Diverge as Markets Digest Grim U.S. Economic Data

Markets were jolted Wednesday by fresh signs of stagflation in the U.S., as a sharp drop in job creation and a surprise GDP contraction triggered volatility across asset classes.

The ADP employment report showed just 62,000 jobs were added in April, marking the weakest gain since July 2024 and falling far short of the 108,000 forecast. Minutes later, the government reported that GDP shrank by 0.3% in the first quarter, versus expectations of modest growth. A steep rise in imports—spurred by anticipation of tariffs—contributed heavily to the downturn.

Adding to concerns, inflation pressures remained elevated. The core PCE price index rose 3.5% for the quarter, outpacing forecasts of 3.1%.

Stocks initially sank on the data, with the Nasdaq down over 2% and the S&P 500 sliding 1.5%. Bitcoin and major cryptocurrencies followed suit in early trading, but BTC later pared losses and hovered near $94,300, down 1% on the day.

While traditional markets attempted a midday recovery, crypto assets struggled to regain momentum, weighed down by lingering concerns over economic uncertainty and monetary policy direction.