Softening U.S. job market, potential Biden withdrawal, U.S. stocks close lower for the second consecutive day

The latest US employment data weakened, increasing the probability of a Fed rate cut. However, with market weighing political uncertainties and the sell-off of large tech stocks, major US stock indices closed lower, with the Dow falling over 530 points. Cryptocurrency trends remained relatively stable, with Bitcoin dropping below 64K, while Ether stabilized above 3,400 due to news of the upcoming launch of an Ethereum spot ETF.

Ethereum spot ETF fee revealed, expected to officially launch on 7/23

Softening of the U.S. Job Market

The latest data released by the U.S. Department of Labor on July 18 showed that the number of initial jobless claims last week saw the largest increase since early May, and the number of continued jobless claims also rose significantly, further indicating a softening job market.

For the week ending July 13, the seasonally adjusted number of initial jobless claims in the U.S. was reported at 243,000, far exceeding the market expectation of 229,000, representing an increase of 20,000 from the revised previous value of 223,000.

The weekly increase in U.S. initial jobless claims, coupled with an unemployment rate rising to 4.1%, reaching a new high since 2021. The slowdown in the job market, along with recent cooling inflation, further supports market expectations for the Federal Reserve to cut interest rates in September. According to CME Group's FedWatch, investors believe there is a high probability of a rate cut in September at 98.1%, with slightly increased probabilities for additional cuts in November and December.

Possible Withdrawal of Biden

Since the disastrous debate three weeks ago, calls for Biden to withdraw from the race have been increasing. According to a report by CNBC, donors have decreased, and the donations are no longer sufficient to meet the demands of his campaign to aggressively expand in the three months leading up to the presidential election.

While Biden has repeatedly emphasized that he will stay in the race after the debate, he has also mentioned that he may consider withdrawing if there are health issues. Recently, Biden tested positive for COVID-19 and has returned to his residence for rest, missing scheduled campaign events.

Several individuals close to Biden have revealed that the President's attitude towards stepping down has shifted.

TSMC Once Again Reports Outstanding Performance

Taiwan Semiconductor Manufacturing Company (TSMC) has once again reported outstanding performance at its investor conference, expressing optimism for the future of AI and smart phones. TSMC's ADR rose by 0.39%. In response to former U.S. President Trump's previous remarks about "Taiwan taking over the chip market" and "should pay protection fees," Chairman Mark Liu also responded to this during the conference, stating that TSMC's overseas expansion plans will not change due to these comments.

However, large-cap tech stocks are still under pressure, while market funds are shifting towards smaller stocks with higher sensitivity to interest rates as expectations for rate cuts heat up.