TLDR
- Ed Yardeni increased his U.S. stock market crash forecast to 35% probability from a previous 20%
- Crude oil prices surged past the $100 per barrel mark, raising inflation concerns and growth slowdown worries
- Bitcoin maintains trading levels around $67,000, showing steadier performance versus declining equity markets worldwide
- NYDIG research indicates approximately 25% of Bitcoin’s price action correlates with equity market movements
- Iran appointed a new supreme leader amid escalating tensions, adding to market volatility and economic uncertainty
Prominent Wall Street strategist Ed Yardeni has increased his forecast for a U.S. stock market crash probability to 35% through the remainder of 2025, marking a significant jump from his previous 20% estimate. Simultaneously, he reduced his projection for a market rally to merely 5%, down from an earlier 20% forecast.
This revised outlook follows crude oil prices breaking through the $100 per barrel threshold. Elevated energy prices intensify inflation concerns while simultaneously dampening economic expansion prospects, creating headwinds for equity and digital asset markets.
Yardeni articulated the situation clearly: “The U.S. economy and stock market are stuck between Iran and a hard place. So is the Fed.”
Tensions between the United States and Iran continue intensifying. President Trump issued warnings of additional military action following Iran’s refusal to de-escalate. Iran appointed Mojtaba Khamenei as its new supreme leader, succeeding his father Ali Khamenei, who perished in a U.S. military strike. Iranian security leadership has declared that Trump “must pay the price” for the ongoing conflict.
Bitcoin recorded trading levels around $67,378 on Monday, registering a modest increase of slightly over 1% across a 24-hour period. This represents comparatively stable performance considering the upheaval affecting conventional financial markets.
S&P 500 futures experienced declines exceeding 2% during Asian trading sessions. The VIX volatility index, commonly regarded as Wall Street’s fear gauge, reached its most elevated reading since the tariff-driven turbulence of April 2024. The U.S. dollar recorded its strongest weekly performance in twelve months.
International markets absorbed substantial losses. The MSCI global equity index declined 3.7% over the previous week. South Korean markets continue struggling to recover from unprecedented two-day losses. Hedge fund managers expanded short positions across U.S. equity exchange-traded funds.
Market participants have adjusted their Federal Reserve rate cut expectations, now anticipating action in September rather than earlier. Prior to the conflict beginning in late February, markets had completely priced in a rate reduction by July.
Bitcoin’s Price Is Not Fully Tied to Stocks
Analysis conducted by NYDIG demonstrates that roughly 25% of Bitcoin’s price movements stem from its relationship with U.S. equity markets. The remaining 75% originates from dynamics unique to cryptocurrency markets.
Greg Cipolaro, serving as head of research at NYDIG, explained that Bitcoin’s recent correlation with software sector stocks represents shared sensitivity to prevailing economic conditions rather than an inherent structural connection.
However, Bitcoin has declined in tandem with equities throughout each significant risk-aversion episode since 2020.
Crypto-Linked Stocks Also Feel the Pressure
Equities connected to cryptocurrency operations have experienced substantial price volatility as investor sentiment turns more conservative. Bitcoin mining company Core Scientific liquidated portions of its Bitcoin reserves while transitioning toward an artificial intelligence-centered business model. The company’s stock price declined around the timing of this transaction.
Ether posted gains of 2.3% reaching approximately $1,981. Solana advanced 1.8% to $83.69 yet remains the poorest performer among major cryptocurrencies over a seven-day timeframe, still registering a 1.5% weekly decline.
Ten-year Treasury yields increased by six basis points as markets incorporated expectations for elevated inflation stemming from rising petroleum costs.
The S&P 500 fell 2% during the previous week, recording smaller losses compared to most international markets, partially attributed to substantial domestic energy production in the United States.
