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Stocks fall on Fed worries, Coinbase stock plunges on SEC crypto probe

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Yahoo Finance’s Jared Blikre breaks down how markets opened on Tuesday.

Video Transcript

[MUSIC PLAYING]

BRAD SMITH: Good morning, everyone. And welcome back to "Yahoo Finance Live." Markets right now have opened lower for the major averages, as we're seeing declines across the board for the Dow, the S&P 500, and the NASDAQ. Let's get on over to Jared Blikre who is live on the floor of the New York Stock Exchange. Jared, early in today's tape, what are we seeing?

JARED BLIKRE: I'm seeing what I saw yesterday after the market, which is Walmart just cratering the entire retail sector. I'm looking at the YFi Interactive, it is a very red board here. And you can just see the damage. Walmart, I guess, I got to give them credit. At least they pre-announced. That's something they failed to do last time stocks took, what, 20%-25% hit in one day. So did Target. This was an absolute disaster. That can't happen.

Everybody thinks the Fed is gonna pivot. Well, that's not gonna be for at least another quarter. Is the Fed gonna blink? I don't think they're gonna do that tomorrow.

When you look inside the market, there are some pretty interesting things going on. I don't want to scare anybody, but the S&P 500 could easily careen down to new lows if Powell holds his ground tomorrow. And that's just the way the market is right now. If he blinks, if he says anything the slightest bit bullish, it could go up.

So we're just in this kind of wait-and-see mode. I don't think the big traders have been in this market for several months. They put on their positions and they're just waiting it out. So either you're hedged, or you're in cash, or you're losing your shirt, pick your poison. But S&P 500 down 17% year to date. It could be worse.

JULIE HYMAN: Whenever you say, I don't want to alarm anyone, Jared, it's like I hold on to the desk here.

JARED BLIKRE: Sorry.

JULIE HYMAN: I don't want to alarm anyone, but we're also seeing shares in Coinbase take a hit. There's a Bloomberg report now suggesting that company is facing another Securities and Exchange Commission probe. So what's going on there?

JARED BLIKRE: I think the writing is on the wall here for everybody to see. [? Gensler ?] has said, de facto, that he is going to regulate these exchanges. He said only Bitcoin is not a security, everything else is. That means it's within the SEC's purview. Also, they're probably going to enact rules-- this is out for proposal right now-- to de facto regulate exchanges. They're gonna have rules into this effect. Probably not going to go into effect until next year, but this is a handwriting on the wall.

So let's take a look at the Coinbase stock, down 7% today. It could be worse for Coinbase. I'll tell you what, I'm looking at a year to date chart-- let me see if I can get some candlesticks up on here-- it is basing. And this looks very similar to the Bitcoin chart. Of course, both are very highly levered to the Fed and money printing as well.

But I think this is constructive that it hasn't sunk to new lows. But as I said, this is all leveraged to the Fed. And it really depends on which coin you want to flip and see what the market thinks Jay Powell has said tomorrow. So we'll have to wait and see. Anyway, not trying to cause any alarm bells or raise any alarm bells here.

BRIAN SOZZI: All right, on that note, Jared, we'll check you later.