U.S. equities, Treasurys, and crude oil rallied on renewed optimism over a potential Middle East de-escalation, while crypto markets continued to lag despite the broader risk-on shift.
Axios reported that U.S. and Iranian negotiators have drafted a 60-day memorandum of understanding aimed at extending the ceasefire and opening negotiations on Iran’s nuclear program. President Donald Trump has not yet approved the agreement.
The report followed overnight U.S. airstrikes on an Iranian military site near the Strait of Hormuz, a key global energy shipping corridor that has been central to macro-driven volatility in recent months.
Despite trader fatigue over repeated ceasefire headlines, markets reacted positively. The Nasdaq reversed earlier losses to gain about 0.6%, while WTI crude slipped below $90 per barrel as fears of supply disruption eased.
Crypto, however, remained under pressure. Bitcoin failed to sustain any recovery attempts, slipping back below $73,000 and extending a roughly 2.7% decline over the past 24 hours. The move underscores continued weakness in digital asset sentiment even as broader risk appetite improved.
Following the Axios report, U.S. Treasury Secretary Scott Bessent warned that Washington would not tolerate any attempts to impose tolls on shipping through the Strait of Hormuz. He pledged aggressive sanctions against parties involved in disrupting commercial traffic through the waterway, adding that any facilitators would also face penalties.
On the macro side, the first inflation reading released under Federal Reserve Chair Kevin Warsh showed renewed price pressure. 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 reflects 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 responded to easing geopolitical tensions and shifting inflation dynamics, crypto assets remained subdued, highlighting persistent weakness in digital asset risk appetite.
