THE MARKET IS HOLDING UP BETTER THAN THE HEADLINES
A lot happened over the last 24 hours. Iran reportedly struck a U.S. military base in Jordan, while the IRGC claimed responsibility for attacks on multiple U.S.-linked sites across Kuwait and Bahrain.
At the same time, Iran officially declared the Strait of Hormuz closed to vessel traffic, warning that ships attempting to transit the route could be targeted. Under normal circumstances, headlines like these would trigger broad risk-off moves across global markets.
Instead, markets are showing surprising resilience.
US futures are green ahead of today’s data, with Nasdaq futures up more than 1%, the S&P 500 higher by 0.8%, and volatility continuing to ease.
Crypto is also holding up well. Total market capitalization has recovered back above $2.15 trillion, while Bitcoin continues trading above $62,000 despite the growing geopolitical uncertainty.
The disconnect is becoming increasingly obvious, the headlines keep getting worse, but markets aren’t breaking. The next test arrives today.
PPI WILL DECIDE THE NEXT MOVE
Yesterday’s CPI report reminded investors that inflation is moving higher again. Headline CPI accelerated to 4.2%, the highest reading since March 2023, largely driven by higher energy prices. Now attention turns to today’s Producer Price Index.
Key expectations:
- PPI MoM: 0.7% expected vs 1.4% prior
- Core PPI MoM: 0.5% expected vs 1.0% prior
- PPI YoY: 6.4% expected vs 6.0% prior
- Core PPI YoY: 5.4% expected vs 5.2% prior
Markets are also watching a series of key catalysts beyond PPI, including Initial Jobless Claims, Continuing Claims, and the latest OPEC Monthly Report. If producer prices come in hotter than expected, markets could quickly reassess the rate outlook, pushing expectations for higher interest rates even further out.
OIL IS NOW THE MARKET’S BIGGEST RISK
Shell’s CEO says the world is currently short roughly 1.2 billion barrels of oil due to disruptions linked to the conflict. More than 10% of global crude production is reportedly offline, while inventories are approaching their lowest levels since 2003.
Meanwhile, oil itself has become incredibly volatile. Over the past week alone, crude has experienced multiple moves between 5% and 10% in both directions as traders attempt to price supply disruptions, Hormuz risks, demand destruction, and possible policy responses.
One day oil surges on escalation fears. The next day it drops as traders reassess worst-case scenarios. The result is a market struggling to find equilibrium. Every move higher in crude feeds directly into inflation expectations, rate hike probabilities, bond yields, and risk assets.
GOLD ISN’T ACTING LIKE A SAFE HAVEN
Despite ongoing military conflict, gold recently touched a six-month low and remains more than 20% below its highs. The reason is simple: Markets are increasingly focused on inflation and interest rates rather than geopolitics.
Traders now assign roughly a 52% probability of a Federal Reserve rate hike by December, and higher rates continue weighing on precious metals.
Technically, gold sits at a major support zone near $4.1K.
From here, two paths emerge:
- A recovery toward $4,600 if inflation pressures ease and rate hike expectations fall.
- A breakdown toward $3,800 if inflation remains stubborn and rates move higher.
For now, gold is no longer trading as a pure safe haven. It’s trading as an interest-rate asset.
BITCOIN SURVIVED CPI
BTC responded surprisingly well to yesterday’s inflation data. Despite headline CPI rising to 4.2%, markets focused on relatively contained core inflation and risk assets staged a relief rally. Since then, BTC has recovered roughly 2.5% and reclaimed its short-term moving average.
The key support zone around $61K-$62K continues to hold. The chart has improved considerably. Buyers successfully defended recent lows and are now attempting to build momentum ahead of today’s PPI release. The challenge is obvious. If producer inflation comes in hotter than expected, markets may begin pricing even tighter monetary policy, creating renewed pressure across crypto.
For now:
- CPI gave Bitcoin a reason to bounce.
- PPI decides whether the move continues.
ALTCOIN WATCH
PYTH is showing relative strength today after successfully bouncing from the $0.030 support zone. The token has reclaimed both its 50-period and 100-period moving averages and is now testing resistance near $0.035-$0.036.
A successful breakout could open the door toward $0.040 and potentially higher. For now, bulls have momentum.
WLD remains in a healthy uptrend despite recent volatility. The token has reclaimed both its 50-day and 100-day moving averages and is currently testing the $0.48-$0.50 support zone.
Holding this area is critical. If support remains intact, a move back toward $0.60 becomes increasingly likely. The trend remains bullish until proven otherwise.
PUMP recently launched a new incentive campaign that rewards users for completing ecosystem-related tasks and requests. The initiative aims to boost engagement and activity across the platform. So far, however, the market hasn’t rewarded the effort.
Price remains below the October crash lows and continues trading near cycle lows. The key level to watch is $0.00148. Until it can reclaim that level, the risk remains skewed toward further downside.
The fundamentals may be improving. The chart still needs to catch up.
WHAT TO WATCH TODAY
- PPI: The biggest event of the day after yesterday’s 4.2% CPI print.
- Oil Prices: Still highly volatile as markets react to supply disruption headlines.
- Bitcoin: Holding above $62K after the CPI relief rally. PPI will likely determine the next move.
- Sentiment: Fear & Greed remains at 16 (Extreme Fear) despite crypto holding up well.
- The market survived CPI. Now all eyes are on PPI.
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