US precision strikes on Iranian targets sent crude above $72, weighed on equities and crypto. Fed minutes due Wednesday add to uncertainty for risk assets.
Alpha Score of 40 reflects weak overall profile with weak momentum, poor value, moderate quality. Based on 3 of 4 signals – score is capped at 90 until remaining data ingests.
US forces hit more than 80 Iranian targets with precision munitions Tuesday evening, including air defense systems and over 60 IRGC speed boats near the Strait of Hormuz, Central Command said. The strikes followed Iran's attack on three merchant vessels in the strait, including tankers flagged by Qatar and Saudi Arabia. Iran claimed it retaliated against 85 American military facilities.
West Texas Intermediate crude rose more than 2%, breaching $72 a barrel. Brent gained over 3% to roughly $74. The US decision to cancel a permit for Iranian oil exports added to supply concerns, traders said.
Equity futures pointed lower ahead of Wednesday's open. Dow futures slipped, S&P 500 futures fell, and Nasdaq 100 futures dropped more than 1%. Tuesday's regular session saw the Dow surrender over 100 points after touching an all-time intraday high. The S&P 500 lost 0.5%, the Nasdaq 1.2%. Chipmakers led the tech-heavy index lower.
The dollar index held above 101.00, extending Tuesday's gains. A stronger dollar tends to weigh on cryptocurrencies, traders said. Rising oil prices fan inflation expectations, which could push the Fed toward tighter policy, several market participants noted. Higher rates boost the appeal of fixed-income assets, drawing capital from speculative plays like digital currencies.
Bitcoin and ether drifted lower in Tuesday afternoon trading as the military news broke. The moves reflected a broad risk-off shift rather than crypto-specific catalysts, traders said.
Attention now turns to the Federal Reserve. The central bank's June meeting minutes are due at 2 p.m. ET Wednesday. That gathering was the first under Chair Kevin Warsh's leadership and ended with rates unchanged. The document will show how officials discussed the outlook after the initial Iran strikes in February, which had briefly pushed crude above $100. Since then oil had retreated below $60 before this week's rebound. The minutes may offer clues on how the Fed weighs geopolitical risk against inflation.
The combination of Middle East escalation and a hawkish policy path is the dominant force shaping sentiment across asset classes through the end of the week.
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