Global markets reflected heightened uncertainty on Tuesday as Donald Trump signaled a possible turning point in the Iran conflict, while Tehran indicated its readiness for a ceasefire.
Bitcoin stabilized, along with broader risk assets, as easing geopolitical tensions and US labor market data pointed to slowing labor demand.
At the same time, gasoline prices rose above $4 per gallon, underscoring the economic impact of continued disruptions to global energy supplies.
Trump signals turning point as Iran eyes ceasefire
The Wall Street Journal, citing administration officials, reported that Donald Trump indicated a willingness to scale back the US military operation against Iran, even if the Strait of Hormuz remained largely closed.
The decision suggests a potential turning point aimed at limiting the duration of the conflict while exerting diplomatic pressure to restore trade flows.
Trump urged other nations to take responsibility for reopening the chokepoint, criticizing allies for their lack of commitment. “Have a little delayed courage, go to the strait and TAKE IT. You will have to start learning to fight for yourselves, the United States will no longer be there to help you, just like you have not been there for us,” he wrote in a message on social media.
The strait remains critical to global energy markets, with around 20% of the world’s oil supplies passing through it.
Its continued disruption contributed to the rise in crude prices, with the American benchmark barrel closing above $100 for the first time since 2022.
Analysts warn that a prolonged shutdown could push prices towards $200 a barrel.
Furthermore, Iran has indicated its willingness to end the conflict.
President Masoud Pezeshkian said the country has “the will to end this war” but demands guarantees to prevent future aggression. He added that the situation in the Gulf stems from “hostile and aggressive actions” by the United States and Israel.
Bitcoin Stabilizes as Risk Appetite Improves
Bitcoin was trading around $67,700, up about 2% over 24 hours, as signs of a possible diplomatic exit supported risk appetite.
The cryptocurrency is trying to stabilize after a long fall which erased more than 40% of its value over five months.
The change in tone around the conflict also supported stocks, with US stock indices jumping during the session.
In crypto markets, Ethereum rose as much as 3.3%, while Solana and XRP posted more modest gains.
Despite the rebound, positioning data indicates continued caution among investors.
Options markets are showing significant hedging on the downside, with over $1.5 trillion of puts clustered at the $60,000 level.
Analysts note that if selling pressure weakens, more sustained demand will be necessary to confirm a lasting recovery.
The US labor market shows signs of slowing
Recent data from the Bureau of Labor Statistics showed a moderation in labor demand before geopolitical tensions escalated.
Job offers fell to 6.88 million in February from a revised 7.24 million in January, generally in line with expectations.
Hiring activity also declined sharply, falling by almost half a million to 4.85 million.
The hiring rate fell to 3.1%, its lowest level since April 2020, reflecting a broader slowdown in sectors sensitive to consumption and commodity cycles.
Despite the decline in hiring, layoffs remained stable, suggesting that employers remain cautious about reducing their workforce.
At the same time, consumer sentiment showed resilience. The Conference Board index rose to 91.8 in March from 91 in February, defying expectations of a decline.
Economists point out that this data largely precedes the recent escalation in the Middle East, which has since added uncertainty to the economic outlook.
U.S. Gasoline Prices Exceed $4 a Gallon
Fuel prices in the United States have risen sharply due to supply disruptions linked to the Strait of Hormuz crisis. According to the American Automobile Association, gasoline prices briefly exceeded $4 a gallon, the highest level since August 2022.
Prices have jumped by more than 30% since the start of the conflict, driven by restricted oil flows. “Gasoline and diesel prices continue to climb to multi-year highs as the effective closure of the Strait of Hormuz reduces the flow of millions of barrels of crude oil each day,” said Patrick De Haan of GasBuddy.
“The situation remains highly volatile and unpredictable, but upward pressure on fuel prices is expected to persist as long as global oil supplies remain constrained by the continued disruption in the strait,” he added.
Diesel prices have also risen sharply, surpassing $5 a gallon, and further hikes are likely if the disruption continues.
Analysts warn that sustained rises in energy prices could weigh on economic growth and contribute to inflationary pressures in coming months.
