Risk assets recover from oil-driven selloff as rising yields pressure Fed rate-cut bets.
Bitcoin and global stocks have rebounded from an early-week sell-off sparked by the U.S.-Israel-Iran conflict.
Bond yields, however, continue to climb as traders reassess the outlook for inflation and price out Fed rate cuts.
Strong U.S. economic data and the prospect of a prolonged energy-driven inflation shock call for caution.
$BTC $70,806.97 and global equity markets have stabilized after an early-week sell-off and oil price spike that was triggered by the outbreak of military conflict between the U.S., Israel, and Iran. Bond markets, however, are signaling caution, as rising yields signal renewed inflation concerns and dwindling bets on Fed rate cuts.
BTC, the leading cryptocurrency by market value, traded above $70,000 Friday, up nearly 10% for the week. Prices briefly climbed to nearly $74,000 Wednesday after dropping to around $65,000 over the weekend as geopolitical tensions rattled markets.
The rebound has been mirrored in equity futures. Contracts tied to the S&P 500 slid to a multi-week low of 6,718 points Tuesday before recovering to around 6,840 as of writing. $SOL
The initial risk-off move came as oil prices surged following reports that Iran had blocked oil tankers transiting through the Strait of Hormuz, a critical chokepoint for global crude supplies. Markets stabilized after the U.S. moved quickly to calm fears, promising naval escorts and political risk insurance for oil and gas tankers traveling through the strait.
Still, the bond market remains uneasy. $BTC
