The optimism around a US–Iran resolution that has supported risk assets in recent weeks has run into a significant obstacle, with Trump rejecting Iran's latest proposals as "totally unacceptable." The ceasefire technically holds, but drone strikes in the Gulf continue and both sides appear further from agreement than markets had been pricing. Brent has bounced back above $104 on the news, and bond yields have moved higher across the board, with the inflation narrative firmly back in focus.
The resilience of equities is the most striking feature of this market. The S&P 500 is trading near all-time highs, and the Nasdaq continues to lead, anchored by AI-driven earnings that appears (for now) to be absorbing the macro headwind. The disconnect is notable: oil rising, yields climbing, the 10-year Treasury at 4.39%, UK gilts at 4.97% and yet global equities holding at record levels. The market is effectively choosing to look through the Iran impasse and focus instead on the Trump–Xi Beijing summit as the next potential catalyst for de-escalation. A resolution would force a rapid repricing of the energy and rates complex that has been quietly tightening beneath the surface.
Bitcoin is holding just above $80,000, a level that continues to act as both technical support and a psychological anchor. The more interesting story is what’s driving the price and what is notably absent. Institutional wallets now account for 70% of on-chain volume, with transactions above $1 million dominating activity while sub-$1,000 transactions represent less than 1% of flows. Retail is sitting this one out entirely and historically only returns in force when three conditions align: a break to new all-time highs, a spike in volatility, and a clear re-engaging narrative. None of those are present yet.
Digital Asset Holdings, the company behind the Canton Network is raising $300 million at a $2 billion valuation, led by a16z crypto, which itself just closed a $2.2 billion crypto fund. The contrast with the broader venture landscape is interesting. Overall, VC investment in crypto fell last month to its lowest level since June 2025, with capital concentrating into infrastructure plays rather than spreading across the sector. Meanwhile, Strategy's signals that it may sell a portion of its $66 billion Bitcoin holdings to fund a dividend, has drawn attention. Less because of the market impact and more because it marks a shift in posture from the company that pioneered the model. Is accumulation alone no longer a sufficient business model?
Thursday’s UK local elections delivered a historic result, with Reform UK posting a net gain of over 1,300 seats and seizing control of 13 councils, including its first in London. Labour lost control of 27 councils, finishing third behind Reform and Plaid Cymru in Wales, a region the party has dominated for over a century. Starmer rejected calls to stand aside, and gilt markets responded constructively to that clarity, with 30-year yields pulling back as much as 10bps after his remarks. Sterling is holding around $1.36, though it remains sensitive to any renewed leadership pressure.
Overall, it’s confidence over caution for now. Equities near highs, crypto holding, and risk assets broadly resilient, but the foundations are more fragile than the surface suggests. Oil is rising again, the Iran situation has deteriorated rather than improved, UK political risk has crystallised rather than resolved, and the data underpinning rate decisions on both sides of the pond is under scrutiny. The Trump–Xi summit and the next round of Iran talks are the near-term catalysts to watch.