Palantir Earnings Break the AI Slump, Bitcoin Flows Stay Selective
Digital Asset Market:
Bitcoin is trading near $63,755 and Ethereum near $1,625, with digital assets participating only partially in the broader equity rebound. Bitcoin has recovered from an intraday low near $62,911, but the move remains modest compared with the strength in QQQ and the earnings-led rally across AI-linked equities.Institutional demand is providing support, although the precise scale of Monday’s ETF inflow varies across live trackers. Available estimates range from approximately $18.6 million to $170.1 million of net inflows for August 3, while broader reporting describes ETF demand as resilient despite weak U.S. retail interest. The direction is more important than the disputed total: regulated vehicles are still absorbing supply, but not with enough force to make Bitcoin the market’s leading risk asset. Stablecoin and settlement activity remain structurally better positioned than outright token beta because institutions still need dollar mobility, collateral transfers, and cross-border liquidity regardless of whether Bitcoin leads the equity tape.
Macroeconomics:
The start-of-week macro setup is being driven by an earnings rally, lower oil, and a bond market that remains skeptical. Brent is trading near $81.75 and WTI near $77.86 after dropping roughly 2% to 3%, while the 10-year Treasury yield remains around 4.66% and the 30-year near 5.22%. Markets are receiving energy relief, but the long end is still pricing persistent inflation, fiscal supply, and policy uncertainty.Labor data now becomes the next rate trigger. The June JOLTS report is due this morning, followed by ADP employment data Wednesday and nonfarm payrolls Friday. Consensus expects job openings to ease from 7.59 million to roughly 7.4 million, a level that would still indicate relatively healthy labor demand. A controlled decline would support the soft-landing narrative; a stronger reading could reinforce hike expectations and pressure duration-sensitive assets, while a sharp deterioration would shift the concern from inflation to growth.
Equities:
U.S. equities are extending Monday’s rally, with SPY near $761.88 and QQQ near $712.05. QQQ is outperforming by roughly 1.7%, while the broader market is also receiving support from industrial and consumer earnings. Palantir surged after reporting approximately 93% revenue growth and raising its full-year forecast, while Caterpillar gained following stronger earnings and an expanded backlog.The more useful signal is that earnings leadership is becoming less dependent on a single semiconductor narrative. Palantir is demonstrating commercial demand for enterprise AI, while Caterpillar and McDonald’s show that profits are also supporting industrial and consumer-linked parts of the index. That is healthier than a rally carried exclusively by chips, but it does not remove concentration risk. Investors still need AMD and SpaceX results to confirm that AI compute, infrastructure spending, and funding intensity can translate into durable economics rather than simply rising capital requirements.
The Fed and US Treasury:
Treasuries are stabilizing today, with TLT modestly higher near $82.65, but the long end remains historically restrictive. The 10-year yield recently reached approximately 4.71%, while the 30-year touched 5.25%, its highest level since 2007. Over the last five weeks, the 10-year has risen by roughly 33 bps as markets priced resilient growth, inflation pressure, geopolitical risk, and limited confidence that the Fed can deliver meaningful easing.The next formal Fed catalyst is the release of the July 28-29 FOMC minutes on August 19, leaving incoming labor and inflation data to drive the rates market in the interim. The curve is effectively testing whether strong earnings and lower oil can coexist with yields near multi-year highs. If job openings and payrolls remain firm, risk assets may have to absorb higher discount rates without expecting policy relief. If labor demand cools gradually, the market gets a better chance to extend the equity rally without triggering an immediate growth scare.
Geopolitical:
Geopolitical risk remains broader than the Strait of Hormuz, even though Middle East diplomacy continues to move oil and rates intraday. The more structural issue for institutional portfolios is the overlap between conflict risk, U.S.-China trade fragmentation, European political uncertainty, and technology supply-chain concentration. The IMF’s July outlook describes an uneven global economy in which war shocks are hurting energy importers while AI-linked demand supports countries integrated into the technology value chain, with global disinflation having stalled.That creates two separate transmission channels. Middle East developments affect energy, shipping, inflation, and FX, while U.S.-China strategic competition affects semiconductors, data infrastructure, industrial policy, and access to critical components. Recent supply-chain research suggests that “China+1” diversification has not eliminated Chinese upstream exposure because many ASEAN supply chains remain deeply connected to Chinese intermediate goods. For investors underwriting AI infrastructure, geopolitical diversification therefore requires more than moving final assembly. It requires visibility into upstream materials, equipment, power systems, and cross-border capital access.
View from our desk
Earnings are replacing macro relief as the market’s justification
Monday’s rally began with falling oil and improved U.S.-Iran expectations, but Tuesday’s continuation is being sustained by company-level earnings rather than another broad easing in financial conditions. Palantir’s acceleration and Caterpillar’s backlog demonstrate that investors are still willing to pay for visible demand, even with the 10-year yield near 4.7% and the 30-year above 5%. That is a healthier foundation than a rally based entirely on rate-cut expectations, but it also raises the underwriting threshold. Companies need revenue conversion, pricing power, cash generation, and credible forward guidance because lower discount rates are not available to rescue weak execution. The market is moving from thematic allocation toward earnings discrimination, with strong companies able to outperform despite restrictive rates. Through the remainder of the week, the durability of the rally will depend on whether AMD and other major reports confirm that profit growth is broadening beyond a few exceptional results.
Bitcoin is supported, but it is no longer setting the risk tone
Bitcoin’s recovery into the mid-$60,000s is constructive, particularly with ETF demand remaining positive while retail interest stays subdued. The market structure has become more institutional, but that also means Bitcoin increasingly competes directly with equities, credit, and cash for portfolio allocation. When QQQ can gain more than 1% on visible earnings acceleration, a modest Bitcoin ETF inflow is supportive without being decisive. This is a different environment from earlier phases of the cycle when crypto-specific liquidity could overwhelm the macro tape. Bitcoin now needs sustained allocation demand, not simply a stable price or one positive flow session, to reclaim leadership. We would view continued ETF accumulation alongside calmer long-end yields as the confirmation that matters, while another divergence between strong equities and flat crypto would reinforce the idea that capital remains selective.
The long end is becoming an allocation hurdle rather than a market signal
A 30-year Treasury yield above 5.2% changes the competitive landscape for every long-duration asset. Investors no longer need to accept speculative growth, illiquidity, or execution risk simply to earn a meaningful nominal return, which forces venture, AI infrastructure, credit, and crypto positions to justify their risk premia more explicitly. The market can continue rising with yields at these levels, but the winners will be businesses and assets that demonstrate cash generation, structural demand, or a distinct liquidity function. This also explains why strong earnings can coexist with fragile breadth: capital is available, but it is being rationed against a much higher hurdle rate. The next stage of the cycle should reward operating leverage and capital efficiency more than narrative exposure. Friday’s labor report will determine whether that hurdle begins to ease or becomes even more restrictive.
Happy Trading!
The 1Konto Team
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