How Low Can Stocks & Crypto Go? September 8th, 2025
A future Fed rate cut is now in focus
Bottom Line: My first rule of money... Never let your money and emotions cross paths. This story is a weekly wake-up call to show you the near-worst-case scenario for stocks and crypto. Why? So, you can plan your financial future with a cool head, not a racing pulse. The odds of a near-worst case outcome almost certainly won’t happen, however if your plan accounts for it – it can help you manage through even the most trying markets like what we’ve experienced this year.
The US stock market is history’s ultimate wealth-building beast. Crypto? It’s minted millionaires from early believers. Fact: Over 90% of the time, investors who try to “time” the market end up poorer than if they just stuck to their original investments. This is about dodging that trap.
Here’s how the big three indexes are faring in 2025 so far:
- DOW: +7% (off less than 1% last week)
- S&P 500: +10% (off less than 1% last week)
- Nasdaq: +13% (up less than 1% last week)
Last week’s abbreviated trading week featured a mostly flat result, however the implications were significant. Weaker than expected ADP and BLS jobs reports led to investors trying to balance optimism regarding future interest rate policy with concerns regarding a potential economic slowdown. As of today, a 100% probability of interest rates being cut has been priced into the market with an 80% probability of an additional rate cut in next month’s meeting as well. However, after the weaker-than-expected jobs reports, many investors have also begun to wonder if President Trump has been right about the Fed being “too late”, his nickname for Chairman Jerome Powell, in moving to cut rates. Also, notably, the next Fed meeting is still a week and a half away.
This week features a slew of economic data that will surely move markets. The data include the ever-important Consumer and Producer Price Index reports for August demonstrating the latest inflation rates for consumers and businesses. Also, geopolitical matters will remain on the radar of investors as well as any hope of peace between Russia and Ukraine seemingly evaporated over the weekend as Russia launched the largest air attack on Ukraine to date. That attack came following a meeting between Presidents Putin and Xi last week seemingly showing the continued closeness of the China-Russia alliance.
As for cryptos...
Here’s a look at where they stand.
- Bitcoin: slightly lower last week +18% YTD
- Ether: slightly lower last week +28% YTD
- BitwiseETF (Top 10 cryptos): +2%, last week +19% YTD
I can’t value cryptos because they have no inherent value. Stocks, though? They’ve got bones. Let’s break down the S&P 500:
- Current P/E: 30.07
- Historic Avg. P/E: 16.17
Translation: On earnings alone, the maximum downside risk is a 46% drop from here—flat with last week as stock prices and fundamentals moved in tandem. The market is still somewhat historically expensive; we have seen a 2% improvement in the fundamental value of the market during this market cycle.
So, What’s Your Move?
If a 46% dip wouldn’t derail your life, you’re probably golden. If it would? Time to call a pro and build a plan that doesn’t leave you sweating bullets—or making mistakes.