Pre-Market Update: Stocks Soar to New Highs While Bitcoin Sinks — What’s Driving the Split

TLDR

• The Dow Jones Industrial Average closed above 52,000 for the first time on Monday, with Alphabet helping push the index higher.
• The S&P 500 and Nasdaq are on track for their best first-half performance since 2024, up 8.7% and 11.1%.
• Bitcoin fell on bets that the Federal Reserve could raise interest rates, along with talk of Bitcoin sales from Strategy.
• The Supreme Court rejected an attempt to remove Federal Reserve Governor Lisa Cook, keeping the central bank’s independence intact for now.
• The U.S. dollar pushed the Japanese yen to a 40-year low, raising concerns about possible market intervention.

U.S. stock futures rose Tuesday morning as investors closed out the first half of the year on a positive note. The gains followed a record-setting session on Wall Street to start the week.

Dow Jones Industrial Average futures were up about 0.2%. S&P 500 futures also gained 0.2%, while Nasdaq 100 futures rose 0.4%.

The Dow closed above 52,000 for the first time on Monday. Alphabet, a new addition to the index, rose 4.8% and helped drive the gain.

Other members of the so-called Magnificent Seven group of tech companies, including Amazon, Apple, Microsoft, and Nvidia, are also part of the Dow. Caterpillar has been a top contributor to the index’s climb since it passed 51,000, helped by demand for machinery used to build data centers.

Stocks Head Toward Strong First Half

The S&P 500 and Nasdaq are both on pace for their best first half of a year since 2024. The S&P 500 is up 8.7% so far this year, while the Nasdaq has gained 11.1%.

The Nasdaq is also on track for a roughly 20% gain over the past three months. That would mark its best three-month run since 2021. A sharp rise in chip stocks has driven much of that gain.

Analysts at LPL Financial said in a note that while investor enthusiasm has grown, it has not reached extreme levels. They pointed to mixed sentiment surveys and said investor positioning has started to ease from earlier highs.

The yield on the 10-year Treasury note stood at 4.369% early Tuesday, slightly lower than the day before.

Bitcoin Falls as Fed Independence Case Plays Out

Bitcoin dropped Tuesday as traders weighed the chance of a Federal Reserve interest rate increase. Reports of possible Bitcoin sales by Strategy also weighed on the price.

Higher interest rates tend to reduce demand for riskier assets, including cryptocurrencies.

On Monday, the Supreme Court rejected an attempt by President Donald Trump to remove Fed Governor Lisa Cook without full legal review. The decision keeps the Federal Reserve’s independence in place, at least for now.

The ruling comes shortly after Kevin Warsh took over as the new Fed chairman. Warsh is set to speak Wednesday at the European Central Bank’s forum in Sintra, Portugal. Investors will watch his remarks for signs about future interest rate moves.

The U.S. dollar continued to strengthen against other currencies. It pushed the Japanese yen to its lowest level in 40 years, raising the possibility that Japan could step in to slow the decline.

Oil prices fell as traders looked ahead to potential talks between the United States and Iran in Doha. Gold was also on track for a monthly loss as investors priced in expectations that the Fed could raise rates.

A report on U.S. job openings is due later Tuesday. The data could shape expectations for the Fed’s next move on interest rates ahead of Thursday’s jobs report.

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