US stocks and crypto fell on Monday as Iran-Israel tensions, sticky CPI inflation and a weak dollar fueled risk appetite and strengthened JPMorgan’s bearish tactical stance.
Conclusion
- US indices lower after Iran tensions and $100 oil pressure on appetite and CPI
- JPMorgan warns war risk could send S&P 500 up 10% from peak.
- The dollar index is down briefly, while bitcoin, ethereum and solana are all down around 4%.
US markets are returning to macroeconomic reality as geopolitical risk rises, inflation and volatility concerns and a weaker dollar collide with bubble risk assets. JPMorgan’s trading center warned that the Iran war “could send the S&P 500 down as much as 10% from its peak,” adding that they are now “tactically bearish” on U.S. stocks as oil climbs above $100 a barrel.
At the open, all three major US stock indexes were down sharply, with the Dow Jones down 1%, the S&P 500 down 0.87% and the Nasdaq down 0.86%, while big chip names like Intel and AMD extended recent declines. Andrew Tyler, head of global market research at JPMorgan, said the positioning “remains broadly neutral and lacks aggressive risk-reducing actions,” but argued that in a pullback scenario the S&P 500 could slide to 6,270, about 7% lower than last Friday’s close. Other strategists echo the warning: “We are tactically cautious as we prepare for what could be a prolonged period of heightened uncertainty,” JPMorgan Group said in a recent note on the US-Iran context.
Inflationary expectations add another layer of tension. Bank of America said in a client report that the February CPI print is unlikely to change the Federal Reserve’s near-term stance, forecasting a 0.3% month-over-month increase in both headline and core CPI and “moderate growth in consumer prices” overall. This will keep rate cut optimism short-term and leave stocks more susceptible to growth shocks and geopolitical shocks.
The U.S. dollar index DXY briefly fell more than 10 points to around 99.25 as traders turned to other safe havens and reassessed the U.S. macro premium. In digital assets, bitcoin traded at around $68,200, down nearly 4% over the past 24 hours, while ethereum changed hands at around $3,040, down nearly 4% on the day. Solana was recently priced at around $85.50, down around 3.9% over the same period as liquidity across the board decreased.
