Huo Xing Finance reports that on July 23, market analyst qinbafrank stated that tonight, Brent crude oil futures touched $100, the 10-year U.S. Treasury yield broke above 4.7%, and the U.S. Dollar Index rose again above 101. The deterioration of the macroeconomic environment is causing the market to face three simultaneous pressures in the short term: rising oil prices pushing up inflation expectations; rising U.S. Treasury yields lowering equity valuations; and a stronger dollar tightening global liquidity. I believe the near-term market outlook is not optimistic—leverage reduction in risk assets has not yet been fully cleared, yet macro-level pressures are now arriving head-on. If Brent crude sustains above $100, oil holds steady at $90, the 10-year U.S. Treasury yield remains above 4.7%, and the dollar continues above 101, large tech stocks represented by the Nasdaq will face the greatest pressure, and gold will also be forced to remain under pressure. The failure to establish a new shipping route through the Strait of Hormuz and the death of U.S. soldiers make it unlikely that Trump will immediately change course; he may need to feel extreme market pessimism and pressure before retreating. “Trump may not yet have accepted a harsh reality: he can no longer restore the Strait of Hormuz to its pre-conflict state, yet he must continually project toughness to appease domestic opposition and sentiment for the sake of his approval ratings and re-election.” For Trump, either he must indirectly repurchase international shipping rights through the strait by paying Iran massive sums to relinquish control, or completely dismantle Iran’s regime and military capabilities—but it appears Trump has no intention of going this far.
Macro pressures weigh on risk assets as Trump faces a dilemma
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Summary
Risk management is paramount as macroeconomic pressures continue to weigh on risk assets, with Trump facing a difficult dilemma. On July 23, crude oil futures reached $100, the 10-year U.S. Treasury yield surpassed 4.7%, and the U.S. Dollar Index climbed above 101. Rising oil prices, higher yields, and a stronger dollar are tightening global liquidity and elevating inflation expectations. On-chain trading signals indicate ongoing deleveraging in risk assets. If oil remains above $90, yields stay above 4.7%, and the dollar remains above 101, large-cap tech stocks and gold will face increased pressure. Trump is struggling to pivot amid the Strait of Hormuz crisis and mounting domestic political pressures.
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