Bitcoin lags while the Dow jumps 537 points as earnings and cheaper oil offset chip selloff
The Dow Jones Industrial Average rallied on Tuesday as strong corporate earnings, falling oil prices and a shift away from semiconductor stocks pushed money into other corners of the market.
The Dow gained 537.24 points, or 1.03%, to close at 52,747.32, its third consecutive winning session.
The S&P 500 rose 0.21% to 7,428.78, while the Nasdaq Composite fell 0.22% to 24,876.91, as tech stocks continued to fall.
The VanEck Semiconductor ETF (SMH) fell more than 3%, marking its fourth consecutive loss day. Micron Technology (MU) and Advanced Micro Devices (AMD) each dropped more than 8%.
Lower oil prices helped support the broader market after Iran discussed the Strait of Hormuz with Saudi Arabia and Oman. West Texas Intermediate crude fell about 4% to settle at $79.26 per barrel, while international benchmark Brent crude dropped 4.8% to $84.09.
Investors are now awaiting the Federal Reserve’s interest-rate decision, which is largely expected to hold its benchmark lending rate steady, despite continued inflation making the outlook for the remainder of the year more dubious.
A hold is not completely priced into the market. The CME FedWatch Tool shows a nearly 30% chance of a 25-basis-point rate increase, up from roughly 15% one week ago.
Bitcoin, meanwhile, is showing some of its clearest signs yet that it may be forming a long-term bottom after months of weakness. The cryptocurrency has traded around the $60,000 level for almost two months after falling below $70,000 at the beginning of June.
It remains about 50% below its October record of roughly $126,000. Bitcoin’s advance toward $83,000 in May was viewed as an opportunity to reduce exposure before another period of long-term weakness. Since then, the price has held above $58,000 after surrendering about 60% of the gains recorded during the 2022-to-2025 rally.
Wolfe Research analyst Read Harvey said Bitcoin remains in a broader downtrend and expects the recent move toward $65,000 to lose momentum before another decline.
“Price remains in a clear downtrend beneath the downward sloping 200-day moving average, which it has failed to eclipse since losing it in November,” Read told CNBC.
“We expect this latest stretch of relief to ultimately stall out below the 200-day moving average and reverse to make a new leg lower – as we have already seen play out multiple times this year.”
Read also follows the view that Bitcoin moves in a four-year cycle, historically consisting of three rising years followed by one declining year. Under that pattern, he believes the cryptocurrency could fall below $40,000 in October before reaching a bottom.