Peace talks fall into another deadlock, U.S. stocks retreat from highs, can Bitcoin hold the 80k level?

The outlook for the Iran-U.S. talks once again falls into chaos.

After Axios exclusively reported the day before that “both sides are close to reaching an agreement,” the market briefly immersed itself in optimism: the S&P 500 hit a record high, and the Nasdaq also set new highs. On Wednesday, the S&P 500 jumped 1.46% to 7,365.12, while the Nasdaq surged 2.02% to 25,838.94—both reaching record closing highs.

This good mood didn’t last more than 24 hours.

On Wednesday, an Iranian Foreign Ministry spokesperson said that the peace proposal put forward by Washington “is still under review,” and that at the heart of the proposal—pausing uranium enrichment and reopening the Strait of Hormuz—both of the key demands remain unresolved. Iran’s red line on uranium retention remains unchanged. The bullish confidence built up the previous day was quickly drained by this news. Risk sentiment reversed accordingly. All three major U.S. stock indexes closed lower across the board, with semiconductors leading the decline and small-cap stocks under especially heavy pressure.

Core narrative: A peace agreement is still a long way off

The market’s interpretation of this war has become highly polarized—either the talks will succeed, or fighting will continue.

This week’s diplomatic pace has generated a comparatively large burst of volatility. On Monday, Trump announced a suspension of the “Project Freedom” escort missions; a Pakistan intermediary released positive signals; on Tuesday, Saudi media even predicted that passage through the Strait of Hormuz would see a breakthrough within “hours.” Oil prices plunged on the news—U.S. crude fell more than 5% at one point intraday, and Brent slid to below $97.

But Iran immediately cooled things down. The Iranian Foreign Ministry clearly stated that uranium enrichment is a red line, not a bargaining chip. At the same time, the Islamic Revolutionary Guard Corps announced it would establish a new “control system” for the Strait of Hormuz, implying that even if passage is opened in the future, it would be a selective opening under Iran’s leadership rather than an unconditional restoration.

Meanwhile, the U.S. Treasury announced additional sanctions on Iran-related oil networks that day. Reports also say the U.S. military used force within the strait against an Iranian oil tanker that violated the blockade. Economic pressure and military deterrence are running in parallel, showing no sign that the U.S. government has loosened its grip.

Polymarket data shows the probability of reaching a peace agreement before May 15 has fallen to 15%; as of the time of writing, it is 20%.

As a result, oil prices carved out a sharp V-shaped move.

Intraday, Brent futures briefly fell to $96.73, down more than 12%. After the news on the talks gradually turned sour, bulls returned to the market. Brent closed around $100 at the end of trading, and WTI closed near $90.5—both barely holding on to key integer levels.

Worth noting is that spot Brent (the spot price) has fallen below near-month Brent futures, signaling a reversal in the spot premium structure—suggesting that, in the physical crude market right now, supply is relatively ample, structurally diverging from the geopolitical risks priced into the futures market.

Outside the Strait, U.S. crude exports hit a record high last week. Global buyers are accelerating their shift toward U.S. supply sources to avoid Middle East shipping risks.

And France’s BNP Paribas energy strategy head Aldo Spanjer directly walked away from trading in the energy markets: “The outcomes are too binary; headlines alone are enough to trigger stop-losses. This situation has happened five times this week, making it almost impossible to trade.” TP ICAP energy analyst Scott Shelton said the current environment is a “risk desert,” with only hedging positions left in the room.

Can Bitcoin hold the $80,000 mark?

Now let’s look at Bitcoin—the asset that crypto users care about most.

Against this backdrop, Bitcoin continues to face pressure. Bitcoin spot fell about 1.56% on the day, but found support around the $80,000 area.

Unlike previous rounds of panic selling, this pullback structure is relatively healthy. On-chain data shows the share of holdings held by long-term holders rose to 78.3% of circulating supply; exchange balances have continuously fallen to a 7-year low. Over the past 30 days, whale addresses have net bought about 270,000 BTC. The size of BlackRock’s Bitcoin ETF holdings has risen to about $62 billion, and the structure of institutional holdings is trending toward stability.

As for Ethereum, this week’s overall sentiment benefited from rising expectations that U.S. crypto regulation legislation will be implemented. ETH has gained about 5.6% over the past five days, trading in a range of $2,360–$2,412, while its market value has held around $233 billion.

Worth noting is that April this year was the single month with the strongest net inflows into U.S. spot Bitcoin ETFs since October 2025, with net inflows reaching $2.44 billion. Institutional channels are still continuing to open, which echoes Bitcoin’s relatively resilient “downward resistance” performance amid macro turbulence at this moment.

From the perspective of narrative logic, the impact of the Middle East situation on the crypto market is showing structural divergence. Rising oil prices and increasing inflation expectations lead to a higher probability of Federal Reserve rate hikes, which puts pressure on Bitcoin; but at the same time, some Middle East capital is accelerating the transfer of assets to decentralized channels to avoid potential sanctions risks and liquidity constraints in the banking system. On the same day the U.S. Treasury added sanctions on Iran-related oil networks, on-chain data shows a slight disturbance in the volume of anonymous mixing transactions. This is not a conclusion—just a signal worth monitoring.

On the legislative front for crypto, market expectations for the implementation of the U.S. regulatory framework are also supporting sentiment. The stablecoin and digital asset market structure bills in the U.S. House and Senate are moving forward. If they are enacted within the year, they will provide compliance support for institutions to further expand allocations.

U.S. stocks churn at high levels, semiconductors fall behind

Thursday is the second day this week with unclear market direction.

The S&P 500 closed down 0.38%, at 7,337.11 points; the Dow fell 313.62 points (-0.63%) to 49,596.97 points; the Nasdaq’s decline was relatively restrained, closing down only 0.13% at 25,806.20 points. The Russell 2000 small-cap index fell 1.63%, the biggest drop among major indexes that day.

All sectors closed lower. The energy sector had the biggest decline, while consumer staples were relatively resilient.

Within the technology sector, the internal split was obvious. Tesla rose 3.28%, Nvidia rose 1.76%, Microsoft rose 1.68%, and Meta rose 0.64%; Apple fell 0.03%, Alphabet fell 0.01%, and Amazon fell 1.39%. The aggregate index of the “seven giants” rose slightly overall by 0.69%, one of the few bright spots of the day.

Semiconductors were the hardest-hit area. The Philadelphia Semiconductor Index closed down 2.72%; AMD fell 3.07%; and TSMC ADR fell 1.28%. Better-than-expected earnings from Qualcomm and Fortinet and Datadog’s analyst day provided some support for the software sector. The software index may be on track to post gains for a fourth consecutive week, but that couldn’t conceal the broad, systemic sell-off in the chip sector.

Data from Goldman Sachs’ trading desk adds an even more stimulating dimension: the high-beta momentum portfolio fell as much as 8% that day, while the S&P 500 and Nasdaq 100 both declined less than 0.5%. This “scissor gap” ranked among the top 10 most extreme single-day divergences in the past five years, and there have already been five such occurrences year-to-date in 2026.

In addition, the VIX fell 1.78% to 17.08, showing a rare divergence from the decline in U.S. stocks. Typically, when stocks fall, the fear index rises. Right now, both are moving in the same direction downward, suggesting the market may be waiting for tomorrow’s (Friday’s) non-farm payroll data, and is unwilling to bet on a direction in the short term.

U.S. stocks that reported earnings recently are also highly representative. Arm Holdings released its FY2026 Q4 earnings after the close on May 6. Adjusted earnings per share were 60 cents, and revenue was $1.49 billion—both slightly above analysts’ expectations. Licensing revenue grew 29% year over year, and royalty income rose 11%.

The earnings report itself wasn’t bad. But during the earnings call, management mentioned that the company’s latest AGI CPU data center chips face a supply bottleneck; an additional $1 billion in demand can’t be converted into revenue for the time being. Raymond James analyst Simon Leopold wrote directly: “Supply constraints have restrained management from raising revenue guidance.”

After-hours, the stock surged by as much as 13%, then gave back all of it. After the opening on Thursday, it fell more than 10%, making it one of the biggest decliners among technology stocks that day. This was the third time in the past year that Arm “delivered an earnings beat” and then suffered a “big drop the next day.”

After hours, just as Arm finished its presentation, CoreWeave took the stage next. Actual Q1 revenue beat expectations; revenue swelled to $99 billion, and Nvidia injected another $2 billion during the quarter. However, Q2 revenue guidance came in below market expectations, and full-year 2026 capital expenditures were raised to $31 billion to $35 billion—more than doubling from $14.9 billion in 2025. After hours, the share price fell by over 10% at one point.

CoreWeave’s losses are real, its debt is real, but its orders are real too: a $99 billion revenue backlog and Nvidia continuing to increase its backing. But clearly, everyone is questioning whether this future money can run faster than today’s capital expenditures.

Fed leans hawkish, non-farm payroll data on Friday

Finally, regarding the Federal Reserve: the short-term interest rate market on the day saw a slight hawkish shift. The probability of an unexpected rate hike before year-end rose to about 20%. But most in the market view this as noise. Labor data remains strong. In the week’s initial unemployment claims, the number only slightly increased to 200,000—there is still no substantive crack in the jobs market.

The yield on the 10-year U.S. Treasury rose by about 4.8 basis points to 4.393%, rising in tandem with the rebound in oil prices.

Offshore RMB briefly rose above 6.80 during the day, hitting a four-year high, before slipping slightly back. It was 6.8078 in New York at the end of trading. The U.S. Dollar Index closed up 0.08% at 98.10.

For gold, spot gold briefly touched two-week highs above $4,700 during the day. At the close, it rose 0.22% to $4,701.61 per ounce. The tug-of-war between inflation concerns sparked by oil prices and safe-haven demand driven by expectations for talks has found a balance. Silver saw even greater gains. COMEX silver futures rose 3.02% to $79.64 per ounce, and spot silver briefly surged above $82.

In European stock markets, the STOXX 600 fell 1.02%, the UK FTSE 100 declined 1.55%, France’s CAC 40 fell 1.17%, and Germany’s DAX fell 0.99%.

The variables surrounding the Strait of Hormuz have not yet been cleared. The next market trigger is Friday’s non-farm payroll data. Initial jobless claims this week rose slightly to 200,000 at the beginning of the week, but remained below the market expectation of 206,000. Layoff pressure in the labor market is still moderate. Against the backdrop of the probability of Fed rate hikes within the year rising to about 20%, this also means non-farm payrolls will become the next coordinate for repricing.

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