Last week, the market experienced a major turnaround—risk sentiment suddenly reversed 180 degrees. On the stock market side, the technology sector led the decline, and the yield curve also started to steepen bearishly, with disappointing earnings forecasts from Oracle and Broadcom further depressing overall risk assets. Year-end profit-taking and sector rotation combined, causing the Nasdaq to plunge by as much as 2%, making the scene quite awkward.

What’s even more heartbreaking is the legal turmoil. The Supreme Court is scheduled to rule on certain tariff authority issues this week. If the ruling is unfavorable, the U.S. government may have to refund approximately $200 billion in tariffs to importers. This money would need to be raised through debt issuance, directly impacting government finances—after all, tariffs are a significant source of revenue in this year’s budget. Influenced by this expectation, the 10-year U.S. Treasury yield has been testing the multi-month high of 4.20%, and it’s on the verge of breaking through. Just in the past two weeks, the 2/10-year yield curve has steepened by about 15 basis points.

The bond market’s long end also faces another pressure. If a candidate inclined toward easing policies is appointed as Federal Reserve Chair, it would offset the Fed’s recent dovish tone regarding the downside risks to employment. Although this week’s non-farm payroll report may show an increase in the unemployment rate, the market currently prices only about a 25% chance of a rate cut in January, and the rate cut expectations for 2026 are only slightly more than two. In this environment, how is cryptocurrency performing? Continuing to decline. Against the backdrop of liquidity exhaustion, prices continued to fall on Friday and Monday, coupled with rumors of large market makers selling off inventories, and the aftershocks of the October 10 event are still lingering. In recent weeks, liquidity and trading volume have noticeably contracted, and the over-the-counter market is even more sluggish.