On June 11 local time, President Trump told reporters in the Oval Office that a "major reconciliation on war and Iran" had just been reached, and that a preliminary agreement aimed at ending the conflict was close to completion. This statement immediately triggered a sharp reaction across global financial markets.
Just hours earlier, Trump had said he would launch a "very fierce attack" on Iran, threatening to seize Khark Island and other oil facilities in the near future. The rapid shift from threats of war to talk of a peace deal dramatically reshaped market sentiment in a very short period.
Trump revealed that the agreement was in its final drafting stage and could be signed in Europe by the end of the week. Once signed, the long-closed Strait of Hormuz would "immediately reopen." According to media reports, the core terms of the memorandum of understanding require Iran to reopen the strait without charging transit fees and restore pre-war shipping volumes within 30 days. Iran would receive a 60-day temporary sanction waiver and commit never to acquire nuclear weapons.
Iran’s response was noticeably more cautious. A spokesperson for the Iranian Foreign Ministry called reports of the deal "speculation," emphasizing that "no content has been finalized yet." Reuters cited sources saying that while a political understanding had been reached, some issues still required detailed discussion. The market is well aware of this gap—statistics show that Trump has claimed more than 30 times that a peace deal was imminent, but none have materialized.
Nevertheless, the market’s reaction to this "anticipated anticipation" was intense. Over the next 24 hours, the price movements of five major global asset classes—cryptocurrencies, US equities, gold, crude oil, and the US dollar—displayed an extremely rare pattern of simultaneous divergence.
Why Did Crude Oil Plunge While Gold Surged?
Typically, crude oil and gold respond very differently to geopolitical events: Middle East conflicts push oil prices higher and suppress gold (as rising real interest rates weigh on non-yielding assets), or both rise if conflict escalates and risk aversion dominates. But this time, the US-Iran signals triggered a market reaction that wasn’t standard risk aversion, but rather an asset price correction driven by the rapid unwinding of "war premiums."
After Trump’s remarks, international crude oil futures dropped sharply. Brent crude plunged to about $89 per barrel, down 4.4% on the day; WTI fell 2.6%, settling at $87.71 per barrel, its lowest since April. Prior to the outbreak of the US-Iran conflict, the effective closure of the Strait of Hormuz had imposed a "war premium" of roughly 15%-20% on global energy markets. The reconciliation signals indicated that this premium was now being priced out.
Meanwhile, gold prices soared. London spot gold rose 3.45% to $4,212.22 per ounce; spot silver jumped 6.25% to $67.353 per ounce. Some reports noted that gold surged nearly $100 intraday, with spot gold approaching $4,170 per ounce.
There are two intertwined logic lines behind this counterintuitive phenomenon.
First is the core inflation logic. US CPI data for May, released on June 10, showed a year-over-year increase of 4.2%, with core CPI up 2.9%, in line with expectations. Core CPI rose 0.2% month-over-month, lower than expected, indicating that underlying inflation pressures were less severe than previously feared. Against the backdrop of Middle East conflict driving energy prices higher and May’s energy CPI surging 23.5% year-over-year, the moderate level of core inflation was seen as a relatively positive signal. Inflation concerns eased temporarily, US Treasury yields fell, with the 10-year yield dropping 10 basis points in a single day to 4.45%. For non-yielding assets like gold, falling real interest rates provided direct price support.
Second is the cross-asset reallocation of risk-averse capital. During the US-Iran conflict, some safe-haven funds flowed into gold. As the war premium began to fade and the dollar’s credit narrative remained unchanged, these funds didn’t exit but chose to continue holding gold. This stands in stark contrast to the rapid unwinding of the war premium in oil—oil prices correct for short-term supply shocks, while gold pricing is rooted in long-term judgments about sovereign credit and real interest rate trends.
What’s Driving the Synchronized Rally in US Equities and Cryptocurrencies?
The simultaneous rise of US equities and crypto assets in this market cycle is a clear departure from traditional risk-aversion logic. It reflects the fact that the pricing framework for these assets has moved beyond the simple "risk-on/risk-off" dichotomy and now centers on liquidity expectations and the restoration of risk appetite.
After Trump signaled reconciliation, all three major US stock indices closed higher. The Dow Jones Industrial Average rose about 930 points, up 1.86%, closing at 50,848.75; the S&P 500 gained 1.75% to 7,394.30; the Nasdaq climbed 2.54% to 25,809.66. Chip stocks led the rally, with the Philadelphia Semiconductor Index up 7.91% and several stocks rising more than 10%. The Nasdaq 100 jumped about 3.5% for its best single-day performance in over a year.
The main driver behind the US equity rebound was cooling inflation expectations leading to lower interest rates. The 10-year Treasury yield dropped 10 basis points to 4.45%, and the 7-year yield fell 12 basis points, directly easing valuation pressure on growth and tech stocks. Notably, even though May’s Producer Price Index (PPI) rose 1.1% year-over-year—above expectations—it didn’t stop Treasury yields from falling. The market prioritized pricing in "war premium unwinding" and "manageable core inflation," two longer-term macro variables.
The crypto market also saw a strong rebound. After a week of extreme fear, Bitcoin surged from a low of $61,944 on the morning of June 12, peaking at $63,933 and currently trading around $63,504, up 2.5% in 24 hours. Ethereum recovered to $1,669. Across the network, total liquidations reached about $269 million in 24 hours, with 72.6% coming from short positions—a systematic short squeeze.
Gate’s market data shows that as of June 12, 2026, Bitcoin was consolidating in the $63,000 to $64,000 range. In the short term, bullish momentum remains, but the $63,500 to $64,000 zone is still a key technical resistance.
The logic behind the synchronized rise in crypto and US equities is clear. Cooling inflation expectations (core CPI below forecast) reduced the urgency for further Fed tightening, improving global liquidity and directly supporting crypto, which is highly sensitive to liquidity. ETF fund flows also support this view—although US spot Bitcoin ETFs saw net outflows for over 13 consecutive trading days through June 11, totaling more than $4.3 billion, the pace of outflows slowed marginally after the CPI data and US-Iran signals.
Another structural shift at the institutional level is worth noting. Crypto asset flows are gradually "decoupling" from their high correlation with tech stocks and moving toward linkage with US high-yield corporate bonds (HYG) and long-term Treasuries (TLT). This means crypto’s pricing as a "macro liquidity-sensitive asset" is being redefined—not just as a shadow of tech stocks, but as a core variable reflecting global dollar liquidity and policy rate expectations.
What Structural Logic Does the Synchronization and Divergence of Three Asset Classes Reveal?
When gold, US equities, and crypto all rally within the same time window, the seemingly contradictory phenomenon is underpinned by a complete structural logic chain. The key is that the drivers for each asset class aren’t identical, but in this cycle, each benefited from different positive catalysts.
Gold benefited from the combination of cooling inflation expectations, falling nominal rates, and lingering geopolitical uncertainty (the substantive implementation of the reconciliation agreement still needs time). Gold’s rally alongside equities breaks the traditional "gold up, stocks down" risk-aversion narrative. The fundamental reason is that the forces driving both higher aren’t purely risk aversion, but "marginal relief from inflation pressure," a shared fundamental. When inflation is no longer the sole market narrative, improved rate expectations can simultaneously benefit gold and other non-yielding assets, as well as growth stocks sensitive to rates.
US equities were powered by the boost to valuations from falling rates. Notably, energy stocks were the only sector to decline, further confirming that the market’s pricing logic is shifting from "Middle East war trading" to "rate expectation trading." The strong performance in chip stocks indicates that market focus has returned to the growth narrative for the tech industry.
Cryptocurrencies occupy a more complex position. On one hand, they benefit from improved liquidity due to cooling inflation expectations; on the other, Bitcoin’s correlation with US equities remains high, but institutional flows show crypto pricing is starting to reflect more macro variables. The framework for Bitcoin pricing is shifting from "tech stock shadow" to "macro liquidity-sensitive asset."
From an asset allocation perspective, the synchronized rally across these three classes is the result of multiple drivers resonating, not a structural convergence of trends. The core variables driving this resonance are: rapid unwinding of geopolitical premiums, core inflation data below expectations, and marginal easing of Fed tightening expectations. If any of these variables reverse, asset prices could diverge again.
Why Didn’t May’s CPI Data Eliminate Rate Hike Expectations?
US CPI data for May, released June 10, showed headline CPI up 4.2% year-over-year—the highest since April 2023, slightly above the prior reading of 3.8%, but in line with expectations. Energy CPI soared 23.5% year-over-year, driving headline inflation higher. Excluding volatile energy and food, core CPI rose 2.9% year-over-year and 0.2% month-over-month, with the monthly increase below expectations. This means that after stripping out energy shocks, US underlying inflation pressures haven’t meaningfully broadened.
However, this CPI report didn’t fully dispel market worries about rate hikes. While marginal improvement in core inflation provided temporary relief, concerns about secondary inflation risks persisted. The most critical signal came from changes in Fed rate path expectations.
Before the US-Iran conflict erupted, markets generally expected multiple Fed rate cuts in 2026. But after Middle East tensions pushed energy prices higher and US employment remained resilient, investor rate expectations shifted significantly. According to the CME FedWatch tool, markets currently price a 98.2% chance the Fed will keep key rates unchanged at the FOMC meeting, but traders see about a 40% chance of a rate hike before the Fed’s October meeting. After the PPI data, traders raised the probability of a 25-basis-point hike in December to 67%.
Three core reasons explain why rate hike expectations are still rising:
First, higher energy costs haven’t fully passed through to end consumer markets. Price transmission from production to consumption typically lags. May’s PPI rose 1.1% year-over-year, above expectations, signaling cost pressures at the corporate level. If companies pass higher energy costs to consumers, core inflation could face upward revisions.
Second, service sector inflation remains resilient. A tight labor market limits the scope for core service inflation to fall, in contrast to marginal improvement in goods price inflation.
Third, market risk pricing is shifting from "war premium" to "policy premium." While reconciliation signals have reduced geopolitical risk, monetary policy may again become the main market concern—if the war premium fades, the Fed’s dilemma moves from "oil-driven inflation" to "whether core inflation is self-reinforcing."
After the CPI release, the market’s next focus shifted to the Fed Chair’s remarks on June 17. Most expect Powell’s statement to be neutral—neither hiking nor cutting rates. The real suspense is whether the Fed will signal a new path for balance sheet reduction. Powell has repeatedly emphasized that rate hikes and balance sheet reduction are unlikely to happen simultaneously. With rate hikes fully priced out in the short term, whether balance sheet reduction is put on the agenda becomes a new source of uncertainty.
Why Is Powell’s June 17 Speech a Key Market Variable?
Fed Chair Jerome Powell will testify before Congress on June 17, briefing lawmakers on monetary policy. According to previous Fed announcements, Chair Walsh will host the FOMC press conference on June 17. (Note: Recent reports suggest changes in Fed leadership; actual speakers should be confirmed with official sources.)
Powell’s remarks are so closely watched because current inflation data and geopolitical conditions present the Fed with a complex policy puzzle. On one hand, May CPI surged to 4.2%, and moderate core inflation hasn’t fully erased concerns about secondary inflation. On the other, US-Iran reconciliation signals mean the geopolitical premium that pushed energy prices higher is fading, and falling oil prices will directly ease future inflation pressures.
Market expectations for Powell’s speech fall into three main scenarios:
First, maintaining a neutral stance. Powell may reiterate that the Fed isn’t in a hurry to decide when or whether to adjust rates, emphasizing data-driven decisions. This would have the mildest impact—neither dampening risk asset momentum nor relaxing vigilance on inflation risks.
Second, a more hawkish tone. If Powell highlights stubborn service sector inflation or hints at reconsidering rate hikes, bets on year-end hikes will rise further. This would directly impact rate-sensitive assets, including crypto and tech stocks.
Third, focus on the balance sheet. Powell has previously said rate hikes and balance sheet reduction are unlikely to occur simultaneously. With rate hikes off the table for now, markets will closely watch for signals on balance sheet reduction. If this is put on the agenda, substantive liquidity tightening will pressure all risk assets.
Beyond Powell’s remarks, markets are also watching the debut "dot plot" from new Fed Chair Walsh. The median rate projections in the dot plot will be the direct basis for repricing the rate path over the next year.
How Are Capital Flows and Risk Aversion Logic Changing Across Five Major Assets?
Viewed from a longer time perspective, a structural shift is taking shape: capital flow patterns and risk aversion logic across asset classes are being redefined, and this trend may be more instructive than short-term price swings.
Within crypto, structural changes in institutional flows are noteworthy. Despite price rebounds, US spot Bitcoin ETFs saw net outflows for more than 13 consecutive trading days through June 11, totaling over $4.3 billion. This phenomenon, occurring alongside price rallies, suggests that the driving force behind this rebound is more likely short covering and marginal improvement in market sentiment, rather than large-scale new institutional inflows. Gate’s market data shows that on June 12, total liquidations reached $269 million in 24 hours, with 72.6% from short positions—a substantial short squeeze.
Another direction worth watching is whether the beta relationship between crypto assets and US equities is weakening. Research indicates that flows into Bitcoin and Ethereum ETFs are shifting from tight linkage with tech stocks to linkage with high-yield corporate bonds and long-term Treasuries, meaning crypto pricing is increasingly shaped by macro variables, not just tracking the Nasdaq.
The risk aversion differences between crypto and gold were also clarified in this cycle. Gold’s immediate safe-haven response to geopolitical risk and crypto’s high volatility in liquidity-driven environments were both clearly demonstrated in price action. Global markets choose different assets as hedges or risk exposures at different stages, and crypto’s role is becoming more diverse and complex.
The differences between gold and crypto can be summarized in several key dimensions: gold is an immediate safe-haven asset, rising instantly during risk events; Bitcoin is a conditional safe-haven, often falling first and then rising during crises. Gold is low volatility, serving as a portfolio "ballast"; Bitcoin is highly volatile, acting as a "magnifier" of price moves. In this cycle, these differentiated asset attributes were on full display—after reconciliation signals, gold continued to benefit from sovereign credit narratives and falling real rates, while crypto assets gained more from marginal improvements in macro sentiment.
The US-Iran conflict has lasted over 100 days. During this period, global investors have experienced the full transmission chain: "war escalation → supply shock → inflation surge → tightening rate expectations → asset price reallocation." As ceasefire and reconciliation narratives replace escalation, the market is shifting from "how to deal with higher inflation" back to "how to find equilibrium prices amid policy uncertainty." Powell’s June 17 speech will be a key test of whether this shift can be sustained.
Summary
US-Iran reconciliation signals directly reduced war premiums, driving an unusual synchronized rally across global financial markets. The geopolitical premium in oil prices quickly unwound, with oil dropping more than 4% in a single day. Gold benefited from cooling inflation expectations and falling real rates, surging over 3% to approach $4,212. US equities and crypto rebounded together as improved rate expectations and restored risk appetite took hold—Bitcoin returned above $63,000, and the Nasdaq posted its biggest single-day gain in over a year.
Yet, market pricing remains highly uncertain. On one hand, the substantive implementation of the reconciliation deal still needs time—Trump has claimed over 30 times that a deal was imminent, but none have materialized, so the actual pace of progress remains a risk factor. On the other, while May’s CPI showed relatively moderate core inflation, rising energy costs haven’t fully passed through to end consumers, and whether the Fed will hike rates by year-end is still unknown.
The three variables the market needs to watch most closely:
- Substantive progress on the US-Iran deal. The direction of nuclear negotiations during the 60-day temporary sanction waiver in the memorandum will determine whether the war premium unwinds one-way or could reverse.
- Fed policy signals. The median rate expectations revealed in Powell’s June 17 speech dot plot, and any possible path for balance sheet reduction, will serve as benchmarks for future market pricing.
- Institutional capital flow reversal. Whether the streak of net outflows from spot ETFs can be reversed will be key to judging if this crypto rebound can shift from short covering to a sustained trend.
FAQ
Q1: Is the impact of the US-Iran peace deal on the current crypto market cycle a short-term spike or a structural driver?
Both. The release of the deal’s signal triggered a short-term market sentiment recovery and short covering—a pulse reaction. But at a deeper level, the unwinding of the war premium means the core variables that previously pushed up energy prices and inflation expectations are weakening at the margin, which has structural implications for Fed policy paths and global liquidity. The actual pace of implementation and subsequent nuclear negotiations will be key to judging how long this impact lasts.
Q2: With May’s CPI jumping to 4.2%, why didn’t the market see panic selling?
Two main reasons. First, the 4.2% figure was exactly in line with market expectations—it was already priced in, and the market focuses more on surprises than expected data. Second, core CPI rose 0.2% month-over-month, below the expected 0.3%, indicating that after excluding energy shocks, US secondary inflation pressures haven’t gone out of control. The market interpreted this combination as "headline high but manageable, core soft but not deteriorating," so it didn’t trigger systemic selling.
Q3: What impact could Powell’s June 17 speech have on the crypto market?
The effect will depend on the policy signals Powell sends. If his remarks are neutral or highlight positive signs of marginal inflation relief, crypto’s rebound could continue, with the market potentially retesting technical resistance at $64,000 and above. If Powell emphasizes stubborn service sector inflation or hints that rate hikes are still on the table, rising rate hike expectations will again suppress crypto prices. Additionally, if the Fed signals balance sheet reduction, liquidity-sensitive crypto assets will face real pressure.
Q4: Does the simultaneous rally in five major asset classes signal a fundamental shift in market structure?
It’s more a result of multiple positive factors overlapping within a single time window, not a structural trend reversal. The three core drivers behind this rally are: short-term unwinding of geopolitical premiums, marginal improvement in core inflation below expectations, and marginal easing of rate expectations. If any of these variables reverse, the price paths of the five assets will likely diverge again. In the long run, gold’s sustained support comes from sovereign credit narratives, while crypto’s drivers depend more on global liquidity and tech narratives—the underlying logic for both hasn’t fundamentally changed.
