The Energy Information Administration reported a buildup of 3.8 million barrels in US crude stocks last week to a total of 419.0 million barrels, while analysts expected a drop of 1.7 million barrels.

Gasoline stocks rose 4.2 million barrels to 232.1 million barrels, while distillate stocks fell 1.7 million barrels to 103.6 million barrels. 

US stock indices rose during Wednesday trading following the release of economic data that boosted expectations of a potential interest rate cut.

ADP data revealed that the US private sector lost 33,000 jobs last month, marking the first monthly decline since March 2023, while estimates had pointed to an increase of 100,000 jobs.

This data supported a rise in the probability of a Federal Reserve rate cut at the July meeting to 23.3%, up from 20% the previous day, according to the CME FedWatch Tool.

A Fed member stated yesterday that the US central bank would put a rate cut on the table for discussion and voting if there is clear evidence of a slowdown in labor market growth.

As for trading, the Dow Jones Industrial Average rose by 0.1% (or 24 points) to 44,518 points as of 16:26 GMT, while the broader S&P 500 index rose by 0.2% (or 15 points) to 6,213 points, and the Nasdaq Composite climbed 0.7% (or 148 points) to 20,350 points.

Nickel prices fell during Wednesday trading amid a rising US dollar against most major currencies, alongside trade concerns and pressure from US President Donald Trump on the Federal Reserve to cut interest rates and on other countries to reach a trade deal.

Traders moved cautiously, awaiting more clarity on these developments, while also anticipating the release of US employment data for June. The dollar rose slightly but remained near its recent lows.

Market participants are closely watching the European Central Bank’s annual conference in Sintra, Portugal, where Federal Reserve Chair Jerome Powell reiterated on Tuesday that the bank will take a “patient” approach regarding further rate cuts, but did not rule out a cut in this month’s meeting, stating the decision would depend entirely on incoming data.

This adds to the importance of the monthly non-farm payrolls report due on Thursday, just before the July 4 holiday. US job openings (JOLTS) data released Tuesday evening showed resilience in the labor market, helping the dollar rebound from its daily lows.

Another factor weighing on the US currency is the ongoing pressure from Trump on Fed Chair Jerome Powell to lower interest rates, raising questions about the central bank’s independence.

On Monday, Trump sent Powell a memo containing a list of key interest rates from global central banks, annotated with handwritten comments. He noted that the US interest rate should be between 0.5% (Japan) and 1.75% (Denmark), adding a remark on Powell’s performance: “As usual... way too late!”

Meanwhile, the dollar index rose by 0.3% to 97.09 as of 15:42 GMT, hitting a high at 97.1 and a low at 96.6.

As for trading, spot nickel prices fell 1.7% to $14,900 a ton as of 15:53 GMT.

Bitcoin (BTC) is currently trading within a tight range after a strong rally last week, as traders remain cautious ahead of key upcoming macroeconomic developments.

Reports indicate that the deadline for US President Donald Trump’s "One Big Beautiful Bill" falls on Friday, while the temporary suspension of tariffs ends in early July, potentially adding a new layer of uncertainty to the market.

This caution was reflected in data from bitcoin exchange-traded funds (ETFs), which saw over $340 million in outflows on Tuesday, ending a 15-day streak of positive inflows since June 9.

As of 12:29 GMT, bitcoin rose 1.2% to $107,800 on CoinMarketCap.

Traders Cut Risk Amid Trade Uncertainty

A report by K33 on Tuesday noted that bitcoin remained in an exceptionally tight range throughout the week, with 7-day volatility falling to 0.79%, the lowest weekly volatility recorded since October 14, 2023, according to the chart included in the report.

Last week’s ceasefire between Iran and Israel triggered a rally that pushed bitcoin up by more than 7%, closing above $108,000. However, the rally stalled, and bitcoin retreated below $106,000 on Tuesday as political discussion resurfaced around Trump’s budget bill and related tariff debates.

The US Senate passed the “One Big Beautiful Bill” on Tuesday with a narrow 51-50 vote. The bill now heads to the House, as Trump seeks to finalize his budget by Friday. Additionally, the suspension of tariffs is scheduled to expire on July 9. Both events could impact bitcoin depending on whether expansive fiscal policy or trade uncertainty prevails.

Besides the bill and the tariff deadline, low liquidity due to the US Independence Day holiday on July 4 may further add to market uncertainty, prompting traders to reduce risk exposure.

Important US economic data is also expected this week, most notably the non-farm payrolls (NFP) report on Thursday, which could once again influence market expectations on the interest rate path.

Early Signs of Weakening Institutional Demand for Bitcoin

New data is showing early signs of weakening institutional demand for bitcoin. According to SoSoValue, US bitcoin ETFs posted $342.25 million in outflows on Tuesday, the highest level of withdrawals since May 30. This also ended a streak of positive inflows that began on June 9. If institutional outflows persist, they could lead to further downside in bitcoin prices.

In a related development, Arizona’s bitcoin reserve bill (HB2324) was revived last month. The bill aims to establish a fund of digital assets confiscated in criminal cases. However, it failed to become law after being vetoed by Governor Katie Hobbs on Tuesday.

Hobbs justified her decision by arguing the bill might discourage local law enforcement from cooperating with state authorities on digital asset seizures.

Bitwise: Bitcoin to Reach $136,000 in July for Three Reasons

Bitwise Asset Management said bitcoin could climb to $136,000 in July for three reasons.

In a report issued Tuesday, the firm stated that bitcoin could overcome its typical summer stagnation and post a 30% surge this month.

First, bitcoin historically gains after geopolitical tensions such as the recent conflict involving the US, Israel, and Iran.

Second, institutions are purchasing more bitcoin than miners are bringing to market.

Third, global interest rate cuts are injecting liquidity into markets, creating a supportive environment for bitcoin and the broader crypto space.

Analysts Andrei Dragos and Ayush Tripathi from Bitwise wrote: “These favorable factors create a constructive backdrop for bitcoin and digital assets as we enter July.”