Markets reversed sharply on Wednesday after the US president declared the truce with Iran over at the NATO summit. Oil jumped nearly 5%, bitcoin lost more than 5% and fell below $61,500 — investors are moving away from risk en masse.
Statement at NATO Summit Shakes Market Calm
Speaking at the NATO summit in Ankara, Turkey, the US president said the truce with Iran was over after new clashes in the Middle East. At a joint press conference with the alliance’s secretary general, he stated directly: “I think it’s over. I don’t want to deal with them anymore… as far as I understand, it’s all over.” According to him, Washington sought a peaceful settlement, but now considers talks with Iran “a waste of time.”
Later that same day, at a meeting with the president of Ukraine, the American leader went further, stating that the US is “very likely” to strike Iran again as soon as tonight, and promised the strike would be tough. The wording left no room for ambiguity — this was not a hypothetical threat, but an announcement of specific military action in the coming hours.
Stock Market Drops Across All Indexes
The reaction of US exchanges was immediate. The Dow Jones Industrial Average lost 488 points, or 0.9%. The S&P 500 fell by 0.6%. The Nasdaq Composite dropped by 0.4%. The decline hit the entire broad market — this is a classic risk-off reaction, when investors simultaneously reduce positions in risky assets regardless of sector.
A notable exception was chipmaker stocks. After a weak previous session, the VanEck Semiconductor ETF rose more than 1%, though it remains 12% below its recent high. The sector’s resilience amid the overall decline may indicate that some capital sees the current dip in chips as a separate story, not directly related to the geopolitical shock.
Oil Prices Reflect Military Premium Within Hours
The commodities market reacted most sharply. Brent crude rose 4.6% to $77.56 per barrel, WTI added 4.2% to reach $73.45. The speed of the move is a clear sign that the market is pricing in not a gradual escalation, but a specific threat of immediate military action in the next few hours.
Such a reaction is logical: any escalation around Iran automatically raises concerns about the safety of shipping through the Strait of Hormuz — a key artery for transporting a significant share of the world’s oil. At such moments, the market does not wait for confirmation of actual supply disruptions — it prices in the risk in advance, reacting to the mere possibility of conflict.
Bitcoin Loses More Than 5% in a Few Hours
The cryptocurrency market was among the hardest hit assets. Bitcoin fell by more than 5%, dropping below $61,442. The decline occurred despite the market having weathered another bitcoin sale by Strategy Inc. earlier in the week — this time, the geopolitical shock was much stronger than the corporate news background.
Ether and Solana also fell following bitcoin, confirming that the sell-off was broad-based and not tied to issues with a specific asset. During periods of acute geopolitical tension, cryptocurrencies continue to behave like high-beta risk assets, not as a safe haven — despite the recurring narrative of bitcoin as digital gold.
Fed Minutes Released Amid Geopolitical Storm
Amid military escalation, investors are also awaiting the release of the minutes from the Federal Reserve’s June meeting — the document is due at 2:00 p.m. US Eastern Time. This was the first meeting under the new Fed chair, at which the rate was left unchanged, but Fed officials made it clear that further hikes are possible if inflationary pressure does not subside.
The timing creates an unusual situation for traders: the market has to digest both military risk and a potentially hawkish monetary policy signal at the same time. Usually, each of these events can move the market on its own — the combination of both in one day sharply increases the likelihood of heightened volatility through the end of the trading session.
What’s Next?
The key question now is how literally the announced strike on Iran will be carried out and how quickly. If military action unfolds on the stated scale, the geopolitical premium in oil prices and pressure on risk assets, including bitcoin, will likely persist or intensify.
If the situation turns out to be mostly rhetorical escalation without immediate practical consequences, markets may partially recover from today’s drop in the coming days. Until the situation becomes clearer, investors should be prepared for heightened volatility across several markets at once — commodities, stocks, and cryptocurrencies.
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