Daily Market Recap: Nasdaq Soars, Geopolitical Tensions Ease, CPI Ahead

Global calm and domestic momentum created a “perfect storm” for a market rally, with risk-on sentiment driving major gains across equities and crypto. A 90-day U.S.-China tariff pause, geopolitical breakthroughs, and easing inflation expectations fueled the move. But Tuesday’s CPI report at 8:30 AM ET looms large as the next key catalyst.

Global Calm, Domestic Momentum – Markets React to Shifting Geopolitical Winds

Trade Deals, Peace Progress, Legislative Hype, and Equity Momentum Create a “Perfect Storm” for Risk-On Rally

Global Geopolitical Landscape Improves

In a rare burst of coordinated diplomacy, several international flashpoints eased to start this week:

• U.S and China have reached a trade agreement to pause most tariffs for 90 days.
• Ukraine continues to make diplomatic headway with Russia.
• India and Pakistan reached a ceasefire agreement.

Markets Surge, Led by Nasdaq & Small Caps Continuing Rally From April

Markets reacted positively across the board:

• The Nasdaq 100 has now surged nearly 26% since its April 7th low, reclaiming key technical levels.
• The Dow reversed its drop and is now +12% since its lows in April.
• Russel 2000 Index has gained around 22% since its low print in April.
• Bitcoin is +40% since April 9th.

According to Goldman’s Brian Garrett, this momentum—combined with a sub-20 VIX—represents a “perfect storm” for non-fundamental equity demand, especially in low-quality themes.

Checkout the VIX now below "Liberation Day" breakout:

Whether this demand spike and risk-on is sustainable remains to be seen.

Tesla Tops $1 Trillion Once Again

Tesla TSLA re-entered the $1 trillion market cap club for the first time since February, highlighting the continued strength in high-beta names during this rally.

Short Squeeze, Treasury Moves, and Macro Repricing

• Today marked the second largest short squeeze of the past year, only topped by April 9’s “pause” rally.
• Interest rate cut expectations plummeted as recession odds declined sharply.
• 1-year US inflation swaps saw their largest drop since November 2022, easing inflation fears.

Treasuries sold off:

• 2-Year yield jumped +11bps to hit 4.00%,
• 30-Year yield rose +5bps.

Dollar Soars, Gold Dips

• The US dollar DOLLAR INDEX surged, reaching post-election highs.
• Gold GOLD ETF followed inversely, plunging back below $300, reflecting reduced demand for safe-haven assets and take profits.

WTI Oil Holds Gains

Crude oil US OIL held overnight strength and closed at $62/barrel, driven by energy market optimism and fading geopolitical fears.

Crypto Corner

Bitcoin BTCUSD held steady above $101K as traders await Tuesday’s CPI report for direction. Ethereum ETHUSD followed suit, staying range-bound near $2,500 while showing signs of strength on dips. XRP XRPUSD saw a great bounce off recent lows around $2.10, but remains stuck in consolidation.

Overall, the crypto market is in wait-and-see mode—but has made most of its losses back. Going forward the market is watching macro headlines and U.S. inflation data for the next catalyst.

Final Thoughts

Geopolitical tensions are easing, and domestic tailwinds are giving bulls a reason to stay active. Risk appetite is clearly picking up—but beneath the surface, liquidity remains tight, and macro repricing is far from settled. Equity inflows are strong, yet fundamentals haven’t fully caught up—making this rally both powerful and potentially fragile.

All eyes now turn to Tuesday’s CPI at 8:30 AM ET, which could be the catalyst for the market’s next major move. Read More on our CPI thoughts: CPI Preview: Why This Inflation Report Could Rock Markets This Summer