Why did cryptocurrencies, U.S. stocks, gold, and crude oil rarely rise together after the signal was released for the Iran-U.S. peace agreement?

Local time June 11th, U.S. President Trump stated in the White House Oval Office to reporters, "A major reconciliation with Iran has just been reached," and an initial agreement aimed at ending the war is close to being finalized. This statement quickly triggered a sharp reaction in global financial markets.

Earlier hours, Trump also said he would "conduct very severe strikes" on Iran and threatened to seize Hall Island and other oil facilities in the near future. The shift from war threats to peace agreements was completed in a very short period, reconstructing market sentiment.

Trump revealed that the agreement document is in the final drafting stage and is expected to be signed in Europe this weekend. Once signed, the long-closed Strait of Hormuz will be "immediately reopened." According to media reports, the core content of the memorandum of understanding includes Iran reopening the strait immediately without toll charges and restoring pre-war shipping volumes within 30 days; Iran will receive a 60-day temporary sanctions waiver and promises never to acquire nuclear weapons.

Iran's side, however, has been more cautious. The Iranian Foreign Ministry spokesperson said reports about the agreement are just "speculation," emphasizing that "nothing has been finalized yet." Reuters quoted sources saying that all parties have reached a political understanding, but some issues still require detailed discussion. The market remains fully aware of this discrepancy—statistics show that Trump has claimed peace agreements are imminent more than 30 times, but none have materialized so far.

Nevertheless, the market's reaction to the "anticipated expectation" has been intense enough. In the following 24 hours, the price movements of the five major asset classes—cryptocurrencies, U.S. stocks, gold, crude oil, and the U.S. dollar—showed an extremely rare synchronized divergence.

Why did crude oil plummet while gold surged simultaneously?

The conventional response logic of crude oil and gold to geopolitical events is diametrically opposed: Middle East conflicts push oil prices higher and gold prices lower (actual interest rate rises suppress non-yield assets), or escalate conflicts simultaneously boost both (risk aversion dominates). But this time, the market reaction caused by signals from the U.S. and Iran is not a standard safe-haven pattern but a correction based on "war risk premium rapid dissipation."

After Trump's statement, international crude futures prices plummeted. Brent crude dropped to about $89 per barrel, down 4.4% that day; WTI fell 2.6%, settling at $87.71 per barrel, the lowest since April. Before the outbreak of the U.S.-Iran war, the actual blockade of the Strait of Hormuz caused a global energy market risk premium of about 15%-20%. The release of reconciliation signals means this premium is now being priced out of the market.

Meanwhile, gold prices surged sharply. London spot gold rose 3.45%, to $4,212.22 per ounce; spot silver increased 6.25%, to $67.353 per ounce. Some reports indicated gold once surged nearly $100 intraday, with spot gold approaching $4,170 per ounce.

This counterintuitive phenomenon is driven by two intertwined logical lines.

The first is the core inflation logic. U.S. May CPI data was released on June 10, showing a year-on-year increase of 4.2%, with core CPI up 2.9%, in line with market expectations. Core CPI rose 0.2% month-on-month, below market expectations, indicating that underlying inflationary pressures are heating up less than previously feared. Against the backdrop of Middle East war pushing energy prices higher and May energy CPI soaring 23.5% YoY, the moderate level of core inflation is seen as a relatively positive signal. Inflation fears are temporarily eased, U.S. Treasury yields fell sharply, with the 10-year yield dropping 10 basis points to 4.45% in a single day. For non-yielding assets like gold, the decline in real interest rates provides direct pricing support.

The second is the cross-asset risk-averse capital reallocation logic. During the escalation of U.S.-Iran conflict, some safe-haven funds flowed into gold; when the war risk premium began to recede and the dollar's credit narrative remained fundamentally unchanged, these funds did not exit but continued to hold gold. This contrasts sharply with the rapid correction of oil prices—oil prices are adjusting for short-term supply-side shock expectations, while gold pricing is rooted in long-term judgments about sovereign credit and real interest rate trends.

What is the driving force behind the synchronized rebound of U.S. stocks and cryptocurrencies?

The simultaneous rise of U.S. stocks and crypto assets in this market, contrasting with traditional safe-haven logic, reflects a shift in the current market's pricing framework beyond a simple "safe/risk" dichotomy, toward an analysis centered on liquidity expectations and risk appetite recovery.

After Trump signaled reconciliation, all three major U.S. stock indices closed higher. The Dow rose about 930 points, up 1.86%, closing at 50,848.75; S&P 500 increased 1.75%, closing at 7,394.30; Nasdaq rose 2.54%, closing at 25,809.66. Chip stocks led the rally, with the Philadelphia Semiconductor Index up 7.91%, several stocks over 10%. The Nasdaq 100 index gained about 3.5% for the day, its best single-day performance in over a year.

The core driver of the stock rebound is the decline in inflation expectations, which led to falling interest rates. The 10-year U.S. Treasury yield dropped 10 basis points to 4.45% in one day; the 7-year yield fell 12 basis points, directly easing valuation pressures on growth and tech stocks. Notably, even with the May Producer Price Index (PPI) released at 1.1% YoY—above expectations—the decline in U.S. Treasury yields was not prevented. The market prioritized pricing in the "war risk premium dissipation" and "controllable core inflation" as longer-term macro variables.

Cryptocurrency markets also rebounded strongly. Bitcoin, after a week of extreme fear, surged from a low of $61,944 on June 12 to a high of $63,933, currently around $63,504, up 2.5% in 24 hours. Ethereum also recovered to $1,669. Total liquidation in the network within 24 hours reached about $269 million, with short positions accounting for 72.6%, making this a systemic short squeeze.

Data from Gate shows that as of June 12, 2026, Bitcoin traded in the range of $63,000 to $64,000. In the short term, bullish momentum still exists, but the key technical resistance remains between $63,500 and $64,000.

The logic behind the synchronized rise of cryptocurrencies and U.S. stocks is relatively clear. The cooling of inflation expectations (core CPI below expectations) reduces the urgency for the Fed to tighten monetary policy further, improving the global liquidity environment and directly supporting liquidity-sensitive assets like cryptocurrencies. Changes in ETF capital flows also indirectly confirm this view—despite U.S. spot Bitcoin ETF experiencing over 13 consecutive trading days of net outflows totaling over $4.3 billion as of June 11, after the CPI data and U.S.-Iran signals, the outflow rate has shown signs of slowing.

Another structural change at the institutional level is noteworthy. Capital flows in crypto assets are gradually decoupling from the high correlation with tech stocks and shifting toward correlations with U.S. high-yield corporate bonds (HYG) and long-term Treasury bonds (TLT). This indicates that the pricing of cryptocurrencies as "macro liquidity-sensitive assets" is being redefined—no longer just a shadow of tech stocks but increasingly reflecting global dollar liquidity and policy rate expectations.

What structural logic is revealed by the synchronization and divergence of the three asset classes?

When gold, U.S. stocks, and cryptocurrencies rise simultaneously within the same time window, a complete structural logic chain underpins this seemingly contradictory phenomenon. The core is that the driving factors behind the three asset classes' pricing are not entirely the same, but they have been favorably influenced by different directions in this round of market.

Gold benefits from the combined effects of cooling inflation expectations, declining nominal interest rates, and ongoing geopolitical uncertainties (the substantive landing of the reconciliation agreement still needs time to verify). The synchronization of gold and U.S. stocks in this rally breaks the traditional narrative of "gold rises, stocks fall" as safe havens. The fundamental reason is that the forces driving both higher are not all from risk aversion but from the marginal easing of inflation pressures. When inflation is no longer the sole dominant narrative, improved rate expectations can simultaneously benefit gold, non-yield assets, and valuation-sensitive growth stocks.

U.S. stocks in this rally are primarily driven by the boost in valuations from falling interest rates. Notably, energy stocks are the only sector to decline, further confirming that the market is shifting from "Middle East war trading" to "interest rate expectation trading." Chip stocks' large gains indicate that the focus has returned to growth narratives in the tech sector.

Cryptocurrencies occupy a more complex position. On one hand, they benefit from liquidity improvements driven by the decline in inflation expectations; on the other hand, Bitcoin's correlation with stocks remains high, but institutional capital flows suggest that crypto's pricing is beginning to reflect more macro variables. The market's valuation framework for Bitcoin is transitioning from "tech stock shadow" to "macro liquidity-sensitive asset."

From an asset allocation perspective, the synchronized rise of the five major assets in this market is due to multiple driving factors resonating together, rather than a structural convergence. The key variables fueling this resonance are: rapid dissipation of geopolitical risk premiums, core inflation data below expectations, and a marginal easing of Fed tightening expectations. If any of these variables reverse, the price trends of the five assets are likely to diverge again.

Why did the May CPI data fail to eliminate expectations of rate hikes?

The U.S. May CPI data was released on June 10, showing a YoY increase of 4.2%, reaching a new high since April 2023, slightly above the previous 3.8%, but in line with market expectations. The May energy CPI soared 23.5% YoY, the main driver of overall inflation. Excluding volatile energy and food, core CPI rose 2.9% YoY and 0.2% MoM, with the MoM increase below expectations. This indicates that, after removing energy shocks, the underlying inflationary pressures in the U.S. have not substantially expanded.

However, this CPI data did not fully dispel market concerns about rate hikes. The marginal improvement in core inflation provides a temporary breathing space, but fears of secondary inflation risks remain. More critical are the signals from the Fed’s interest rate path expectations.

Before the Middle East conflict, markets generally expected the Fed to cut rates multiple times by 2026. But the surge in energy prices due to the conflict, combined with resilient U.S. employment, shifted expectations significantly. According to CME FedWatch, the market now prices a 98.2% chance that the Fed will hold rates steady at upcoming FOMC meetings, but the probability of a rate hike before the October meeting has risen to about 40%. After the PPI data, traders expect a 25 basis point rate hike at the December meeting with a probability of 67%.

The reasons for the continued rate hike expectations are threefold:

1. The rise in energy costs has not yet fully transmitted to consumer prices. Price transmission from producer to consumer usually lags. The 1.1% YoY PPI in May, higher than expected, indicates that cost pressures at the corporate level are emerging. If higher energy costs are passed on to consumers, future core inflation could be upwardly revised.

2. The resilience of service sector inflation. Persistent tightness in the labor market limits the decline of core service inflation, contrasting with the marginal improvement in goods price inflation.

3. Market risk pricing is shifting from "war risk premium" to "policy risk premium." Although the reconciliation signals reduce geopolitical risks, they also mean monetary policy could become the market’s core concern—if war risk premiums decline, the challenge for the Fed shifts from "oil-driven inflation" to "whether core inflation is self-reinforcing."

After the CPI release, market focus shifted to Fed Chair Powell’s speech on June 17. The market expects Powell to remain neutral—neither hike nor cut. But the real uncertainty lies in whether the Fed will signal a new path for balance sheet reduction. Powell has emphasized that rate hikes and balance sheet runoff are unlikely to happen simultaneously. Since rate hikes are now largely priced out in the short term, whether balance sheet reduction will be on the agenda remains an unknown.

Why is Powell’s June 17 speech a key variable for the market?

Powell will testify before Congress on June 17, reporting on monetary policy. According to previous Fed communications, Chair Waller will hold a press conference on the same day. (Note: recent reports mention possible leadership changes; official statements should be checked for accuracy.)

The reason Powell’s speech is highly anticipated is that current inflation data and geopolitical environment present a complex policy puzzle. On one side, May CPI surged to 4.2%, and the mild decline in core inflation has not fully alleviated fears of secondary inflation. On the other, the Iran-U.S. reconciliation signals mean the geopolitical risk premium that pushed energy prices higher is receding, and oil prices are expected to decline, easing future inflation pressures.

Market expectations for Powell’s speech mainly fall into three paths:

1. Maintain a neutral stance. Powell might reiterate that the Fed is not rushing to decide on rate adjustments and will base decisions on data. This would have a mild impact—neither overly suppressing risk assets nor easing inflation concerns.

2. Hawkish tilt. If Powell emphasizes persistent service sector inflation or hints at re-evaluating rate hikes, expectations for rate increases by year-end could rise further, impacting rate-sensitive assets like crypto and tech stocks.

3. Focus on balance sheet. Powell previously said rate hikes and balance sheet runoff are unlikely to happen simultaneously. If the Fed signals plans for balance sheet reduction, it would tighten liquidity and pressure all risk assets.

In addition, markets are watching Waller’s first appearance and the Fed’s dot plot, which will influence future rate expectations.

What changes have occurred in capital flows and safe-haven logic among the five major assets?

Looking at the broader picture, a structural change is emerging: capital flow patterns and safe-haven logic are re-dividing among different assets, which may be more meaningful than short-term price swings.

Within crypto, institutional capital flow structures are noteworthy. Despite the rebound, U.S. spot Bitcoin ETF has experienced over 13 consecutive days of net outflows, totaling more than $4.3 billion. This suggests the current rally is driven more by short covering and sentiment improvement than by fresh institutional inflows. Data from Gate shows that on June 12, total liquidation was about $269 million, with 72.6% short liquidations, indicating a systemic short squeeze.

Another trend is that crypto’s correlation with stocks is weakening, shifting toward correlations with high-yield corporate bonds (HYG) and long-term Treasuries (TLT). This indicates that crypto is increasingly being priced as a macro liquidity-sensitive asset, reflecting broader dollar liquidity and policy rate expectations rather than just tech stock movements.

The safe-haven difference between gold and crypto is also evident. Gold reacts immediately to geopolitical risks and is a traditional safe haven, while Bitcoin’s safe-haven role is conditional and often more volatile. The recent price movements confirm these attributes: gold benefits from sovereign credit narratives and declining real rates, while crypto’s rebound is more driven by macro sentiment recovery.

The Iran-U.S. conflict has lasted over 100 days. During this period, investors have experienced a complete transmission chain: escalation → supply shocks → inflation rise → tightening expectations → asset reallocation. As ceasefire and reconciliation narratives replace escalation, markets are shifting from "how to cope with higher inflation" to "how to find equilibrium prices amid policy uncertainty." Powell’s June 17 speech will be a key indicator of whether this shift can continue.

Summary

The Iran-U.S. reconciliation signals have directly lowered war risk premiums, driving this rare synchronized global market rally. Geopolitical premiums in oil prices have rapidly declined, with a daily drop of over 4%; gold has benefited from cooling inflation expectations and declining real rates, rising over 3% to approach $4,212; U.S. stocks and cryptocurrencies have rebounded in tandem, supported by improved rate expectations and risk appetite recovery—Bitcoin back above $63,000, Nasdaq posting its largest single-day gain in over a year.

However, the current market pricing remains highly uncertain. On one hand, the substantive implementation of the reconciliation still needs time to verify; Trump has claimed agreements over 30 times without actual fulfillment, and the pace of negotiations remains a risk. On the other hand, despite the moderation in core inflation, energy costs have yet to fully pass through to consumer prices, and whether the Fed will hike rates by year-end remains uncertain.

Three key variables to watch now:

1. Progress of the Iran-U.S. agreement. The direction of negotiations during the 60-day temporary sanctions waiver will determine whether war risk premiums are gradually priced out or may re-emerge.

2. Fed’s policy signals. The dot plot on June 17 and the potential path of balance sheet reduction will set the market’s future rate expectations.

3. Institutional capital inflows. Whether the continuous outflows from spot ETFs can reverse will be crucial for whether the crypto rebound can shift from short covering to a sustained trend.

FAQ

Q1: Is the Iran-U.S. peace agreement a short-term pulse or a structural driver for this round of crypto market?

Both. The signal release triggered a short-term sentiment recovery and short covering, which is pulse-like. But on a deeper level, the dissipation of war risk premiums means the core variables that previously pushed energy prices and inflation expectations higher are weakening marginally, with macro policy implications. The actual pace of implementation and subsequent negotiations will determine how long this influence lasts.

Q2: Why did the May CPI rise to 4.2% without causing panic selling?

Mainly because the 4.2% figure was in line with expectations, already priced in. Also, the core CPI’s 0.2% MoM increase was below expectations, indicating that underlying inflation pressures are under control after excluding energy. The market interprets this as "high but manageable," avoiding systemic panic.

Q3: What impact might Powell’s June 17 speech have on crypto?

It depends on the signals. If Powell remains neutral or signals continued easing, crypto could extend its rebound, testing $64,000 and above. If he emphasizes persistent service inflation or hints at rate hikes, expectations for tightening could rise again, suppressing prices. If the Fed signals plans for balance sheet reduction, liquidity tightening would pressure risk assets, including crypto.

Q4: Does the simultaneous rise of five major assets indicate a fundamental change in market structure?

Not necessarily. It’s more a resonance of multiple favorable factors—geopolitical risk dissipation, inflation data, and easing rate expectations—occurring together. Any reversal in these variables could lead to re-divergence. The underlying drivers remain different: gold is driven by sovereign credit and real rates, crypto by macro liquidity, and stocks by valuation and growth narratives.