Crypto markets opened the week in a cautious mood as all eyes turned to Wednesday’s US Consumer Price Index (CPI) report, a figure that could tilt the Federal Reserve’s hand on whether to raise interest rates again in September. The macro backdrop is currently the dominant driver for risk assets, including Bitcoin and Ethereum, which have been moving in step with equity futures.
Nasdaq 100 futures rose about 0.4% in pre-market trading, S&P 500 contracts added 0.1%, while Dow futures edged slightly lower. The quiet optimism stems from Friday’s shock payrolls report: July nonfarm payrolls fell by 23,000, and the previous two months were revised down by a combined 103,000 jobs. That softness sharply reduced expectations for a September rate hike—Fed funds futures now price only a 44% chance—giving equities and crypto some breathing room. However, the labor market weakness also raises concerns about a broader economic slowdown, a potential double-edged sword for digital assets.
Wednesday’s CPI print (8:30 am ET) is forecast to show inflation slowing to 3.4% year-over-year from June’s 3.5%. A cooler reading would strengthen the case for the Fed to hold rates steady, potentially sparking a risk-on rally across stocks and crypto. Conversely, a hotter number could resurrect rate-hike fears, sending bond yields higher and pressuring Bitcoin and altcoins. Deutsche Bank analysts called the CPI “potentially decisive” for near-term policy pricing.
Oil prices add another layer of uncertainty. Brent crude hovered near $84 per barrel as shipping through the Strait of Hormuz remained severely restricted. Iran indicated a deal on new shipping lanes is “very close,” but no breakthrough has materialized. Persistent energy costs keep inflation risks alive, complicating the Fed’s path. For crypto, expensive oil often feeds through to higher operational costs for miners and can dampen broader speculative appetite.
Amid the macro noise, institutional earnings reports are lending support to risk sentiment. JPMorgan raised its year-end S&P 500 target to 8,000, citing strong AI-driven revenue growth and expanding corporate backlogs. Several AI infrastructure firms—CoreWeave, Cerebras, Super Micro Computer—report earnings this week, offering a real-time check on capital flows into the technology that underpins much of the crypto industry’s future scaling ambitions.
With a temporary government funding measure now approved by the Senate, one political tail risk has receded, though it still needs House approval. For crypto traders, the immediate narrative remains the inflation fight: a benign CPI on Wednesday could open the door for a renewed push toward all-time highs for major digital assets, while a hawkish surprise may snap the recent recovery.
