U.S. equities, government bonds, and crude oil rallied on renewed hopes of de-escalation in the Middle East, while crypto markets remained under sustained pressure despite the improved risk tone.
According to Axios, U.S. and Iranian negotiators have drafted a 60-day memorandum of understanding aimed at extending the ceasefire and opening discussions on Iran’s nuclear program. President Donald Trump has not yet approved the proposal.
The report followed overnight U.S. airstrikes on an Iranian military facility near the Strait of Hormuz, a key energy shipping corridor that has been central to macro market volatility in recent months.
Despite widespread skepticism among traders over repeated ceasefire headlines, risk assets responded positively to the latest developments. The Nasdaq reversed earlier losses to gain 0.6%, while WTI crude fell sharply, dropping below $90 per barrel as supply disruption fears eased.
Crypto, however, failed to participate in the broader risk-on move. Bitcoin remained under pressure, slipping back below $73,000 after briefly attempting to recover earlier losses. The asset is down roughly 2.7% over the past 24 hours, reflecting continued weakness in digital asset sentiment.
Following the Axios report, U.S. Treasury Secretary Scott Bessent warned that Washington would not tolerate any efforts to impose tolls on shipping through the Strait of Hormuz. He pledged aggressive sanctions against parties involved in disrupting commercial traffic through the strategic waterway, stating that the Treasury would target entities directly or indirectly facilitating such measures.
On the macro front, the first inflation reading released under Federal Reserve Chair Kevin Warsh showed price pressures accelerating. The Personal Consumption Expenditure (PCE) index rose to 3.8% year over year in April, up from 2.8% in February, marking its highest level in nearly three years.
Fitch Ratings’ head of U.S. economics, Olu Sonola, said the data highlights a worsening inflation backdrop. “This is not just a headline inflation problem: core inflation is moving the wrong way too,” he said. “Price pressures are likely to persist over the next few months… The Fed is stuck — and the heat is clearly being turned up.”
While traditional markets reacted to easing geopolitical tensions and shifting inflation expectations, crypto assets continued to lag, underscoring persistent weakness in risk appetite within the digital asset sector.
