Crypto and Stock Markets Navigate Mounting Policy Uncertainty in Early 2026

Both crypto and stock markets find themselves in a holding pattern as traders grapple with major policy decisions on the horizon. Bitcoin has pulled back sharply from earlier levels, trading near $76.79K on February 1st with a 24-hour decline of 1.35%, while Ethereum faces even steeper headwinds at $2.31K—down 3.21% over the same period. These moves reflect broader uncertainty gripping financial markets ahead of critical government decisions that could reshape asset valuations across both sectors.

The immediate catalyst keeping traders on edge is the Supreme Court’s stance on tariff authority. Prediction markets currently assign just a 24% probability that the Court will uphold President Trump’s use of emergency powers for imposing duties under the International Emergency Economic Powers Act. For investors, the ambiguity matters more than any single ruling: depending on the outcome, policymakers could pursue workarounds that push long-term bond yields higher and tighten global liquidity conditions. This potential policy shift explains why crypto and stock investors remain cautious despite the broader economic backdrop.

Bitcoin Under Pressure: When Policy Uncertainty Meets Technical Reality

Bitcoin’s descent from the $91,000 levels mentioned just days earlier underscores how quickly sentiment can shift when macro headwinds accelerate. January’s tariff tantrum—characterized by sharp liquidation cascades and momentum-driven selloffs in crypto markets—offers a preview of what happens when policy shocks interact with leveraged positions. What’s crucial to note: these episodes typically reflect forced selling rather than genuine exits from the asset class. Trend-following traders who cut exposure early fared better than those caught holding through the volatility.

Ethereum’s 3.21% decline, steeper than Bitcoin’s percentage drop, reflects the typically higher sensitivity of altcoins to macro shocks and deleveraging cycles. Yet looking beyond the daily price action, crypto has demonstrated resilience through repeated tariff-related episodes, suggesting that longer-term conviction among institutional holders remains intact.

Stock Futures Stall as Traders Await Economic Data

U.S. stock index futures painted a picture of stasis on Friday morning, with Dow contracts, S&P 500, and Nasdaq 100 all showing minimal movement. The real catalyst will arrive with the December employment report—economists expect 70,000 new jobs were added with unemployment ticking down to 4.5%. For stock investors, this data matters because it directly influences Federal Reserve thinking ahead of their rate decision in less than three weeks.

The jobs data also carries extra weight given recent disruptions: a government shutdown pushed back November and October employment releases, creating information gaps that markets are now eager to fill. The combination of delayed data and tariff uncertainty means Friday’s jobs report could spark significant moves across equities, especially given how correlated the stock market has become to Fed policy expectations.

Looking Ahead: Gold Prices and Long-term Market Positioning

HSBC’s recent forecast sees gold potentially climbing to $5,050 per ounce in early 2026, driven by geopolitical tensions and swelling government debt levels. However, the bank warns of possible pullbacks later in the year should risks ease or the Federal Reserve adopt a more hawkish stance—a key reminder that even bullish outlooks come with expiration dates.

Year-to-date performance has been solid for traditional equities: the S&P 500 is up nearly 1% for the week, while the Dow has surged roughly 1.8% and the Nasdaq Composite added 1.1%. These gains position stock markets favorably, but they also build in expectations that could evaporate if Friday’s data disappoints or the Supreme Court ruling creates fresh uncertainty.

Both crypto and stock investors should prepare for near-term volatility while policy decisions work through the system. The resolution of these uncertainties—whether through the tariff ruling or employment data—will likely reset market positioning across multiple asset classes and potentially unlock fresh directional moves in 2026.