What is causing the stock market to surge and Treasury yields to dip, while Bitcoin reaches its highest level since 2023?

At the start of the week, investors were leaning towards riskier assets due to a drop in Treasury yields and a weakened US dollar. All major US indices saw gains during midday trading, except for the energy sector. Bitcoin experienced a rally of 3.5%, reaching its 2023 highs. Notably, billionaire hedge fund investor Bill Ackman announced the covering of his short positions on US Treasuries in response to global risks and concerns of a potential economic slowdown. Despite these concerns, risk sentiment remained strong as the financial markets entered a critical week leading up to the Federal Reserve meeting. Four major corporations, including Alphabet, Microsoft, Meta Platforms, and Amazon, are expected to release their earnings reports, adding to the market dynamics. Economic data to monitor closely includes the initial estimate for the third-quarter growth rate of the US economy, with economists predicting a robust increase. Traders are also keeping an eye on the escalating conflict in the Middle East. In terms of US index performance, the S&P 500 rose 0.6%, the Nasdaq 100 increased by 1.1%, the Dow Jones Industrial Average saw marginal gains, and the Russell 2000 rose by 0.3%. Looking at specific stocks, Chevron Corp. fell over 3% after acquiring Hess Corp. in a $53 billion all-stock deal, while Nvidia Corp. rose 3.5%. Bitcoin-related stocks, such as Marathon Digital Holdings, Coinbase Global Inc., and Riot Platforms Inc., saw notable increases. Okta Inc. faced a decline of 8% following a security breach announcement. In commodities, crude oil fell by 2.9%, Treasury yields decreased, and the US dollar index was down by 0.5%. European equity indices rebounded, and gold and silver experienced slight declines.