Bitcoin pushed higher on Monday, extending its weekend advance even as the S&P 500 pulled back from record levels. The divergence comes just two days before the Federal Reserve releases minutes from its July policy meeting, where officials left rates unchanged but were far from unanimous.
Why the minutes matter
The Fed's July 28-29 gathering produced a 9-3 vote to hold rates at 3.50%-3.75%, with three members dissenting in favor of a quarter-point hike. Wednesday's minutes will offer a fuller picture of the debate — and whether the dissenters are gaining ground. Futures markets currently price in only about a 35% chance of a hike at the September meeting, according to CME FedWatch.
That uncertainty has weighed on stocks. The S&P 500 closed down on Monday, retreating from its recent highs near 7,800. It's still up more than 13% year-to-date, but the momentum has cooled as investors worry about sticky inflation and a slowing consumer.
Inflation fears bubble up
Oil prices climbed as US-Iran tensions flared, reviving concerns that energy costs could keep pushing inflation higher. Long-term Treasury yields hit levels not seen in nearly two decades, a sign that bond traders are bracing for a prolonged stretch of elevated borrowing costs.
On the data side, July retail sales fell — a weak number that suggests the consumer is starting to crack. That's a problem for the Fed, which has been trying to cool demand without tipping the economy into recession. The market is now looking to Home Depot and Walmart earnings this week for confirmation that the slowdown is real.
Bitcoin's quiet strength
Bitcoin's rally stands out precisely because it's happening while risk assets elsewhere are struggling. The move builds on a weekend gain, but the cryptocurrency remains well below its 2025 highs. So Monday's climb looks more like a relief bounce than a full-blown breakout — at least for now.
Traders will be watching to see if Bitcoin can hold its ground once the Fed minutes hit. If the tone is more hawkish than expected, the rally could fade as quickly as it started.
