Bitcoin and global stock markets stabilized after a selloff earlier this week and a surge in oil prices triggered by the outbreak of military conflict between the United States, Israel and Iran. Bond markets are moving cautiously, however, as rising yields signal renewed inflation concerns and fewer bets on a Fed rate cut.
BTC, the leading cryptocurrency by market value, traded above $70,000 on Friday, up nearly 10% for the week. Prices briefly climbed to nearly $74,000 on Wednesday, after falling to around $65,000 over the weekend as geopolitical tensions roiled markets.
The rebound was reflected in stock futures. Contracts linked to the S&P 500 slipped to a multi-week low of 6,718 points on Tuesday before rallying to around 6,840 at the time of writing.
The first risk-off move came as oil prices soared following reports that Iran had blocked tankers transiting through the Strait of Hormuz, a critical chokepoint for global crude supplies. Markets stabilized after the United States moved quickly to allay fears, promising naval escorts and political risk insurance for oil and gas tankers crossing the strait.
The bond market nevertheless remains worried.
The yield on the 10-year U.S. Treasury note rose for four straight days, from 3.93% to 4.15%. Bond prices move inversely to yields. At the same time, the two-year yield, more sensitive to interest rate expectations, jumped from 3.37% to almost 3.60%.
Rising yields suggest traders are reassessing the outlook for monetary policy as the conflict-driven surge in energy prices threatens to reignite inflationary pressures.
According to CME federal funds futures, investors now see less than a 50% chance the Fed will make two 25 basis point rate cuts this year, down from nearly 80% before the conflict began.
“The rates market is revealing the tension of this rally,” Bryan Tan, a trader at Wintermute, the leading digital asset market maker, said in an email, highlighting the rise in yields.
“The conflict between a resilient economy (ISM Services at 56.1, ADP at +63K vs. +50K expected) and an inflationary energy shock is historically the kind of setup that keeps the Fed frozen longer. Warsh’s formal nomination to the Senate this week adds another layer of hawkish uncertainty,” Tan added.
Some observers note that the inflationary impact of oil shocks generally spreads gradually through the global economy, suggesting that yields could remain high in the coming weeks and potentially limit the rise in risk assets such as stocks and cryptocurrencies.
“After major geopolitical shocks, oil prices typically rise gradually for weeks. The average trend shows that oil typically climbs 20-30% within 60 days of the shock,” analyst Jack Prandelli explained on
Recent strong U.S. economic data has also contributed to rising yields and lowering rate cut expectations. Data released Tuesday showed economic activity in the U.S. services sector continued to grow in February, with the ISM index rising to 56.1. The ADP private employment report showed 63,000 job creations in February, the highest figure since July 2025.
Attention now turns to Friday’s report on nonfarm payrolls and wage growth figures. Higher-than-expected numbers could further weaken expectations for a Fed rate cut and inject further volatility into financial markets.
