TLDR
- Bitcoin maintained trading levels above $70,000 heading into Friday, posting approximately 7% weekly gains despite initial turbulence
- International equity markets bounced back from midweek losses, with S&P 500 futures climbing toward 6,840
- Crude oil witnessed a 16%+ surge this week following Iran’s tanker blockade in the Strait of Hormuz
- Treasury yields extended gains for a fourth consecutive session, pushing the 10-year from 3.93% to 4.15%
- Market expectations for Fed rate reductions dropped to below 50% for two cuts annually, down from approximately 80%
Bitcoin maintained its position above the $70,000 threshold on Friday while international equity markets found stability following a volatile week shaped by escalating tensions between the U.S., Israel, and Iran. However, fixed-income markets are painting a contrasting picture.
The trading week opened with substantial declines across risk-oriented assets following Iran’s decision to obstruct oil tankers navigating the Strait of Hormuz, a critical maritime passage responsible for approximately 20% of global oil transportation. This action triggered crude prices to spike by more than 16% weekly, marking the most significant weekly advance since March 2022.
Bitcoin experienced a weekend dip to approximately $65,000 before mounting a recovery. The leading cryptocurrency momentarily touched $74,000 on Wednesday before settling back to $70,182 by Friday’s opening bell, maintaining a trajectory for roughly 7% weekly appreciation.
Equity benchmarks traced a comparable pattern. S&P 500 futures descended to a multi-week nadir of 6,718 on Tuesday before rebounding toward 6,840. The Dow Jones Industrial Average declined more than 2% for the week and entered negative territory for 2026. The technology-focused Nasdaq demonstrated greater resilience, positioning for modest weekly advancement.
The United States intervened to stabilize energy markets by committing naval protection for commercial vessels traversing the strait, which helped temper initial concerns. Nevertheless, energy valuations remained elevated.
Treasury Yields Continue Upward Trajectory
The more pressing concern confronting markets involves developments in the fixed-income sector. The benchmark 10-year U.S. Treasury yield advanced for four consecutive trading sessions, ascending from 3.93% to 4.15%. The two-year yield surged from 3.37% to nearly 3.60%.
Escalating yields indicate mounting anxiety that elevated oil valuations will reignite inflationary pressures, constraining the Federal Reserve’s flexibility to implement interest rate reductions.
Prior to the conflict’s emergence, market participants had priced in approximately an 80% probability of two Fed rate decreases this year. That expectation has now fallen beneath the 50% threshold.
Bryan Tan, a trader at Wintermute, suggested the rates market is “revealing the tension in this rally,” highlighting robust economic indicators alongside an inflationary energy disruption as factors that could extend the Fed’s pause longer.
Recent domestic economic indicators reinforced that narrative. The ISM Services index registered 56.1 in February, demonstrating ongoing expansion. The ADP employment report revealed 63,000 private sector positions added, exceeding the anticipated 50,000 and representing the strongest figure since July 2025.
Alternative Cryptocurrencies and Additional Assets Face Headwinds
Most prominent alternative cryptocurrencies declined on Friday. Ethereum retreated 3% to $2,069. XRP decreased 1.8% to $1.39. Solana shed 1.6%, while Cardano and Polygon each contracted 2.5%. Dogecoin similarly fell 1.8%.
Gold positioned for a weekly loss despite continuing geopolitical uncertainty, pressured by a strengthening U.S. dollar.
Analyst Jack Prandelli observed that oil valuations historically surge 20–30% within 60 days following significant geopolitical disruptions, implying markets may be underestimating supply constraints.
Attention now shifts to Friday’s nonfarm payrolls release. Economic forecasters anticipate employment growth near 55,000, declining from January’s 130,000. A result exceeding expectations could drive yields considerably higher.
