Fed Rate Hike Expectations Weigh on Markets Amid Ongoing Geopolitical Tensions

The US Federal Reserve's upcoming decision on interest rates is causing market volatility and uncertainty among investors. The Fed will announce its latest decision on Wednesday, July 29, with markets seeing a September hike as likely.

The recent surge in US inflation to a three-year high of 4.1% has put pressure on the Fed to raise interest rates. However, the ongoing geopolitical tensions and oil price drops have tempered expectations for rate hikes. The latest data from the CME Group's FedWatch Tool currently sees a 31% chance of a hike this week.

The correlation between Bitcoin (BTC) and equities remains absent on higher timeframes, but bears watching in case of further rate hikes or market downturns. Corporate earnings in the US have continued to surpass expectations, but historically high valuations may not shield the market from potential pullbacks.