Major cryptocurrencies have dropped by 2% or more in 24 hours as traders boosted bets of a July Fed rate hike ahead of key economic data releases. According to Bloomberg data, money markets now assign roughly a 50% probability to a Fed rate hike this month, up sharply from about 10% just days ago. The shift follows remarks from Fed Governor Christopher Waller that officials may need to raise rates to bring price pressures under control. Bitcoin had held ground just above $64,000 for the past 12 hours but dipped to $63,400 during early trading, while Ether prices fared a little better, holding above $1,800 for most of the past day following a 15% gain over the past fortnight.
Investors will receive a fresh read on price pressures Tuesday when the Labor Department releases the June consumer-price index at 8:30 a.m. ET. Economists surveyed by Bloomberg forecast that headline CPI will fall below a 4% annual rate, with the report expected to show the first declines in both headline and core inflation since January, following May's readings of 4.2% and 2.9%, respectively. The repricing rippled through fixed-income markets, pushing the two-year U.S. Treasury yield to 4.29%, its highest level since early last year. According to analysts at ING, Fed Chair Kevin Warsh could "if he chooses, emphasize the tameness of inflation expectations" during his congressional testimony, with the U.S. Core Inflation Rate Monthly for June estimated at 0.2% compared to the previous 0.3%.
The week starting July 13 marks the official kickoff of Q2 2026 earnings season, with major financial institutions leading the charge. According to latest reports, JPMorgan Chase (JPM), Goldman Sachs (GS), Bank of America (BAC), Wells Fargo (WFC), and Citigroup (C) all report on Tuesday, followed by Morgan Stanley (MS) and BlackRock (BLK) on Wednesday. The earnings season follows a blowout first quarter that exceeded expectations throughout Wall Street and Main Street alike, setting a high bar for Q2 results. LPL Financial's chief equity strategist Jeffrey Buchbinder noted that margins will be key to potentially keeping up this torrid pace of earnings growth, as corporate America seeks AI productivity gains. Specifically, chip leaders Micron and Nvidia are expected to drive 40% of overall S&P 500 earnings growth, while AI infrastructure stocks are expected to contribute roughly 60%.
The renewed hawkish tilt stems in part from escalating U.S.-Iran tensions and a sharp climb in oil prices. President Donald Trump reinstated a U.S. blockade of Iranian vessels transiting the Strait of Hormuz and demanded a 20% reimbursement fee on all other cargo passing through the critical waterway. West Texas Intermediate crude futures have surged to nearly $80 a barrel from $67 at the start of the month, stoking fresh concerns about inflation. Crude oil prices were up around 4%, with WTI and Brent hitting $74.50 and $79 respectively, while US stock futures opened slightly lower. The escalation of military action in the Middle East is not good for dampening inflation concerns, adding to market volatility.
S&P 500 closed out Friday up 0.4% for a gain of 1.2% on the week, while The Dow gained 0.3% on Friday but still closed the week on a loss of 0.5%. The Nasdaq picked up 0.3% on Friday to close the week up 1.7%, showing strong performance in technology sectors. Total market capitalization has remained steady over the weekend, hovering around $2.26 trillion with a very minor dip on Monday morning after the latest airstrikes. CEX trading volumes rose for the first time in five months in June, with spot climbing 15.3% to $1.11T and RWA perpetual volumes surging to a record $311B. The first test for the S&P 500 will be the financial services sector, with banks expected to deliver another set of booming earnings backed by a mega year for IPOs and trading volumes.
