Bitcoin recovered to $78,800 after an initial dip below $78,000. Other major assets also saw gains: XRP rose 3.6%, Ether increased by 1.2%, and Solana added 1%. This recovery followed a period of pressure on crypto markets caused by rising oil prices and inflation concerns.
The market volatility was driven by Brent crude oil, which surged nearly 2.25% to $99.18 per barrel on Monday, reaching its highest level since late July. This spike was triggered by escalating tensions between the US and Iran, including attacks on Saudi energy infrastructure by Tehran-backed Houthis.
US equities also reacted. The Dow Jones Industrial Average fell roughly 519 points (0.97%) to around 52,895, while the S&P 500 dropped 0.30%. The Nasdaq Composite experienced a negligible decline of 0.06%, later paring its losses to 0.1% by midday Tuesday.
Investors are now focusing on upcoming inflation data. PPI and CPI reports are due this Thursday and Friday. These reports, along with stronger-than-expected August jobs data, have increased the likelihood of a Federal Reserve rate hike on September 16.
The market currently prices a 58.4% probability of a rate hike this month. Previously, oil price spikes exceeding $100 per barrel in 2026 contributed to headline inflation peaking at 4.2% year-over-year in May.