Yesterday’s modest rise in stocks in response to a new Middle East war that broke out over the weekend – for now – appears to have been a headfake.
Mid-morning in the US, the Nasdaq is at its lowest level, down 2.5%. The S&P 500 is lower by 2.3 per cent. European markets are hit even harder, led by a 5.2% drop in Italy’s IBEX 35 and a 4.1% drop in Germany’s DAX.
After reaching historic highs in the weeks leading up to the war, precious metals are also tumbling. Gold is lower by 4.3%, silver by 7.5% and platinum by 11.3%. WTI crude continues to rise another 8% to $77 a barrel. barrel.
However, after falling relentlessly for about the last five months, the crypto markets are showing a little bit of relative strength. Trading at $68,000, bitcoin is down 1% over the past 24 hours, but up more than 2% from the worst levels of the day.
Also down over the past 24 hours, but nicely higher from the worst levels of the session are ether (ETH), solana (SOL) and XRP (XRP).
There is no such bounce yet in crypto-related stocks, which remain under heavy selling pressure on Tuesday.
Shares of trading platform Robinhood ( HOOD ) fell 7%, while Coinbase ( COIN ) fell 5%. Strategy (MSTR) and crypto platform Bullish (BLSH) each fell 4%. Stablecoin issuer Circle ( CRCL ) held up better, but was still down around 1%.
“Historically, bitcoin, as the only liquid asset that also trades on weekends, has absorbed shocks during periods of forced risk reduction,” said James Butterfill, head of research at CoinShares. “This time the price movement was constructive, bitcoin won despite the increasing volatility … This divergence is significant. The absence of significant liquidations despite rising interest rates and geopolitical tensions suggests that the positioning has been adjusted compared to previous episodes.”
