Markets Rally on Trump’s Iran Stance as AI Financing Concerns Mount

Friday, October 9, 2026 | Daily briefing on Trump’s Iran halt, AI financing reality check, bond yield reversals, and crypto liquidation shocks.

Daily Summary

Our View: Trump’s announcement that he will not attack Iran before the midterm elections halted yesterday’s sell-off, and we expect a measured recovery in risk assets today, supported by the largest weekly drop in bond yields in roughly three months. However, this is a relief rally, not a trend reversal: Brent remains above $100, and as ATFX points out, the real question is whether Trump will stick to his word if Iranian attacks intensify. On the equities front, AI financing has emerged as a new core risk headline; OpenAI’s revenue figures falling short of expectations and Firmus cancelling its IPO indicate that growth stories are being repriced in a world where the era of cheap capital is over. In crypto, today we are watching whether the short-squeeze-driven rebound can hold above $83,300; a drop below $81,000 risks renewing selling pressure. Today also marks the anniversary of the October 10 flash crash; volatility may increase in thin liquidity.

• Trump: “We will not attack Iran before the midterm elections.” He announced that there will be no military action until November 3, talks have been “productive,” but the blockade will remain fully in place. WTI dropped from $93 to $91, and Brent fell from $105.65 to $103.
• Bitcoin dropped to as low as $80,300 before recovering to $82,400. During Thursday’s session, it hit a one-month low; $1.19 billion in positions were liquidated over 24 hours, $1 billion of which were long positions. Over the past four hours, 78% of liquidations have come from short positions.
• Ether took six times the damage of Bitcoin. $356 million in Ether positions were liquidated compared to $298 million in Bitcoin, even though Ether’s market cap is less than one-fifth of Bitcoin’s. Per billion dollars of market cap, Ether lost $1.2 million, while Bitcoin lost $180,000.
• The bond market reversed sharply. The 10-year yield fell to 5.22% after hitting a 24-year high of 5.36% during the session; the 30-year yield dropped from 5.73% to 5.60%. Yields are heading for their largest weekly decline in nearly three months.
• OpenAI revenue missed expectations. The company told investors that its annualized revenue at the end of September was approximately $50 billion; last month, figures of $68–$70 billion were widely discussed. Nvidia fell 2.9%, AMD 3.9%, and TSM 3%.
• Nvidia-backed Firmus canceled its $5 billion IPO. The Australian data center operator cited market conditions and shifted to a private funding round. This is the third delay following SB Energy and Holtec; Morgan Stanley estimates that AI infrastructure will require $1.5 trillion in external financing by 2028.
• A cryptography debate shook the market. Ethereum researcher Justin Drake argued that AI could break the mathematics protecting crypto sooner than expected and called for a “bunker mode”; Coinbase Chief Cryptographer Yehuda Lindell dismissed this as baseless fearmongering.
• Today: ECB’s Cipollone and Schnabel are speaking; Brazil inflation and Canada employment data are being released. South Korean and Taiwanese markets are closed for holidays. Tomorrow is the first anniversary of the October 10 flash crash.

Story of the Day: A Single Message Stopped the Sell-Off

On Thursday, markets were pricing in three distinct fears simultaneously: the Pentagon’s directive to prepare for large-scale combat in Iran, bond yields hitting 24-year highs, and a sell-off in AI stocks. Bitcoin tumbled to an architectural one-month low of $80,300; Brent surged 5.5% to $105.65; and the Nasdaq lost 1.4%. Then, at 19:17, came Trump’s Truth Social post: “We will never attack Iran before the midterm elections on November 3.” He called the talks “productive,” but added that the blockade would remain “fully in effect.”

The impact was immediate: WTI slipped from $93 to $91, Bitcoin rebounded from $80,300 to $82,400, and bond yields retreated. By the end of the day, Bitcoin’s 24-hour loss had narrowed to 2%.

The question is how long this relief will last. ATFX Global Chief Market Strategist Nick Twidale highlights the core issue: the big question for markets is whether Trump will keep his word if Iranian attacks intensify. Any sign that the White House is re-evaluating military action could trigger a sharp spike in oil prices—especially with tanker traffic in the Strait of Hormuz already under severe pressure. This skepticism is not unfounded: on Thursday night, a tanker was attacked off the coast of Qatar, and the U.S. Treasury sanctioned 17 vessels linked to Iran’s “shadow fleet” used for oil and gas transport. Reuters notes similarly that traders remain skeptical regarding progress toward ending the war. Political calculations are also visible; Trump’s approval ratings are at career lows due to fuel prices, and prediction market Kalshi prices an 87% probability that the average gas price on election day will remain above $4 per gallon. Thus, the market senses the statement hasn’t altered economic reality.

AI’s Financing Problem Becomes the Core Risk

The most critical structural development this week is the shift of the AI theme from a “growth story” to a “financing question.” Three pieces of news hit on the same day.

• First, revenue: The Financial Times reported that OpenAI told investors its annualized revenue is approaching $50 billion; last month, $68–$70 billion was widely discussed. There is nuance here because, unlike competitors, OpenAI does not include revenue from cloud partners like AWS or Google Cloud; nevertheless, the market sold first and asked questions later, dragging down Nvidia, Oracle, and CoreWeave shares.
• Second, the IPO: Nvidia-backed Australian data center operator Firmus canceled its IPO—which planned to raise up to $5.5 billion at a $30.4 billion valuation and would have been one of the largest in Australian history—pivoting instead to a private funding round. Jun Bei Liu of Ten Cap Investment made a striking observation: she had never seen such a polarizing IPO; while there was immense international investor interest, when it came to putting up the necessary capital, demand seemed absent. This is the third postponement following SoftBank’s SB Energy and nuclear utility firm Holtec.
• Third, and most importantly, scale: Morgan Stanley estimates that AI infrastructure will require $1.5 trillion in external financing by 2028, and this fundraising will occur at a time when global interest rates are rising to combat energy-driven inflation pressures. Saxo Chief Investment Strategist Charu Chanana clearly frames the equation: with long-term yields near decades-highs, investors no longer have the luxury of valuing AI growth in a low-cost-of-capital world. High sovereign yields and increased corporate issuance to fund AI infrastructure make capital both more expensive and more selective, putting corporate balance sheets and future earnings quality directly into focus. Chris Weston of Pepperstone points in the same direction: price action shows investors becoming more selective about where they want exposure and, more importantly, what price they are willing to pay for future growth. This selectivity hit former Bitcoin miners turned AI data centers the hardest: Hut 8 fell 10.7%, Cipher Mining 9.1%, Riot Platforms 8.8%, IREN 7.6%, and TeraWulf 6.4%.

The First Serious Sign of Turnaround in Bonds

The one-way bond sell-off of recent weeks saw a pronounced reversal on Thursday. The 10-year U.S. yield reversed course after climbing to a 24-year high of 5.36% earlier in the session, dropping 5.5 basis points to 5.22%; the 30-year similarly fell from 5.73% to 5.60%. This morning, the 10-year sits at 5.231%, heading for its largest weekly decline in nearly three months. While the exact trigger is unclear, a sharp 2% drop in the Nasdaq likely channeled some hot money into the bond market. Strong auctions this week also improved sentiment.

An interesting technical indicator also came into play: The Economist’s cover story this week was titled “Will Bonds Blow Up?” In market lore, the “magazine cover indicator” suggests that when a well-known narrative finally makes the cover of a major business publication, it is time for a market reversal. One of the most famous examples is BusinessWeek’s 1979 “The Death of Equities” cover following a series of bad years; while it didn’t mark the exact bottom, it preceded a two-decade bull market. While this indicator lacks scientific backing, it serves as a meaningful warning regarding market psychology.

On the Fed front, the tone remains hawkish: Governor Chris Waller said a 75-basis-point rate hike is coming, though not necessarily at consecutive meetings; St. Louis Fed President Alberto Musalem stated that further hikes will be needed to bring inflation back to the 2% target, but avoided specifying what should be done at this month’s meeting. The market prices a 17% probability of a hike in October and an 83% probability in December. On the European side, pressure persists: Eurozone finance ministers and the ECB urged France on Thursday to pass its 2027 budget to calm bond markets.

Market Tour

Equities

Wall Street retreated on tech-led losses Thursday: the Nasdaq Composite closed down 1.25%, the Nasdaq 100 fell 1.39% to 30,726, and the S&P 500 dipped 0.47% to 7,765. The Dow outperformed, closing up 0.1%, while the Russell 2000 finished flat at -0.03%. The VIX rose 2.19% to 15.41. The divergence was clear: AI stocks were sold while energy and defensive names were bought.

• Decliners: Nvidia fell 2.94% to $230, AMD dropped 3.9% to $621, TSM lost 3.01% to $458, ASML fell 1.95% to $1,770, and SpaceX dropped 4.19% on borrowing and Firmus news.
• Gainers: Chevron rose 3.12% to $212, Exxon climbed 2.71% to $168.50 as both benefited from the oil rally; Apple gained 1.11% to $340, nearing its 52-week high.

Weekly jobless claims fell to 197k, coming in below expectations and showing continued labor market strength. Nasdaq futures are up 0.5% this morning, pointing to gains in Europe as well.

Asia is mixed on Friday amid thin liquidity, with South Korea and Taiwan closed for holidays. The MSCI Asia-Pacific ex-Japan index is up 0.5% on the day but heading for a weekly loss of nearly 1%, marking its second consecutive weekly decline. Japan’s Nikkei fell between 0.25% and 1.42% to 69,031; Prime Minister Takaichi stated in parliament that the government will carefully monitor currency and price developments, noting a day earlier that the Japanese economy no longer needs reflationary policies and is not experiencing deflation. She also indicated that the government fully respects the independence of the Bank of Japan, implying she would not oppose additional rate hikes.

Hong Kong’s Hang Seng rose 1.62% to 24,171 as the strongest market of the day, India’s Sensex rose 1.18% to 72,438, Australia gained 0.64% to 8,717, and the Shanghai Composite dipped 0.22%. Europe sold off hard on Thursday: the DAX fell 1.18% to 24,807, Italy dropped 1.35% to 49,298, the Euro Stoxx 50 lost 0.87% to 6,127, and the CAC 40 fell 0.51% to 7,730. The BIST 100 rose 0.75% to 12,214 for its second day of recovery; its monthly loss remains around 13%, keeping it among the weakest performers globally.

Currencies

The dollar index fell 0.13% to 102.00; the roughly three-month low weekly drop in U.S. yields slowed the rally’s momentum, though the index remains near an 18-month high.

• EUR/USD is at 1.1226–1.1230, heading for its fifth consecutive weekly loss. It recovered from a 17-month low of 1.1161 seen on Monday and is down only 0.1% this week, though the five-week loss exceeds 3%. StoneX Senior Analyst Matt Simpson believes the sell-off is getting tired: all moves are quite stretched, and while you only see two or three big moves a year in the euro and this was one of them, bear momentum is weakening, making it necessary to tread very carefully at these lows. Marine Le Pen presenting a budget deficit reduction plan instilled market confidence, especially in contrast to hard-left rival Melenchon’s demand that the central bank cancel public debt. However, Macquarie strategists Thierry Wizman and Gareth Berry pointed to a new risk cycle: France’s bond sales and social unrest are now working in a feedback loop, and intensifying street protests could lead to wider bond yield spreads; on Thursday, French students blockaded high schools and marched through cities.
• USD/JPY: The yen sits at 158.18, heading for its fourth weekly decline, though it has held stable around 158 for the past three weeks. Vishnu Varathan of Mizuho notes that the dollar is in an “unstable leadership position, flattered by a terrible euro and yen.”
• Other Currencies: The Australian dollar is at 0.6984, and the New Zealand dollar is at 0.5621, with the Kiwi nearing its longest losing streak in over four years as it tracks toward a seventh weekly decline. USD/TRY hit a new peak at 49.34.

Commodities

• Oil pulled back following Trump’s statement: Brent fell 1.27–1.34% to 102.88–103.05, and WTI dropped 1.29% to $90.31. On Thursday, Brent had surged over 4% to top $104, while WTI closed up 3.6% at $91.49. A notable technical detail is the Brent-WTI spread: the difference between the two benchmarks reached approximately $12.50, a level historically seen only during periods of market stress. Between 2011 and 2013, North American production outstripping pipeline capacity suppressed WTI, while pandemic demand crashes pushed futures negative. Following February’s war, the spread widened sharply in March as disruptions in Hormuz and high shipping costs pushed Brent higher than WTI, while strong U.S. inventories protected the domestic benchmark. Today’s widening reflects mounting supply and transport pressures on internationally traded crude.
• Precious Metals rebounded: gold rose 1.1–1.52% to $4,177–$4,220, moving away from Wednesday’s two-month low; silver gained 1.4–2.58% to $60.16–$60.59, platinum rose 2.6–3.7% to $1,677–$1,686, and palladium climbed 2.8–3.96% to $1,155–$1,159. However, all three metals are heading for weekly losses.
• Copper rose 2.1% to $6.66. Natural gas sits at $3.15.

Crypto

On Thursday, the crypto market experienced four distinct pressures simultaneously, driving Bitcoin down to a one-month low of $80,300 before recovering to $82,400–$82,470 by Friday morning. The sources of pressure were: Fed minutes signaling another rate hike by year-end, reports of the Pentagon preparing for combat in Iran and the resulting oil spike, a sell-off in AI stocks, and the cryptography debate.

The damage is visible in liquidation data: a total of $1.19 billion in positions were liquidated over 24 hours, with $1 billion coming from long positions betting on higher prices. Traders had piled on leverage throughout the week while Bitcoin oscillated between $83,000 and $87,000, leaving plenty of positions to tumble when the range broke. According to Glassnode data, when Bitcoin dipped below $81,000, roughly 6.4 million Bitcoins slipped into a loss—the highest level since September 18. Still, the picture is balanced: about 13.7 million Bitcoins remain in profit, more than double the amount in loss. Historically, bear market bottoms coincided with supply in profit converging with supply in loss; this summer, when Bitcoin was around $60,000, more than 10.5 million Bitcoins were at a loss, outstripping supply in profit. Today’s landscape is far from that.

Ether’s damage was disproportionately severe, marking the most critical crypto data point of this week:

• Approximately $356 million in Ether positions were liquidated in 24 hours compared to $298 million for Bitcoin, even though Bitcoin’s market cap is more than five times larger than Ether’s.
• Scaled by size, Ether took roughly six times the damage: per $1 billion of market cap, Ether lost $1.2 million compared to Bitcoin’s ~$180,000.
• The largest single liquidation was an Ether position of approximately $20 million on Hyperliquid. Solana bets added $71 million, XRP $34 million, and NEAR $25 million.

Read alongside last week’s note on thinning Ether liquidity, depth decreases as prices rise, meaning sell orders of equal size have a much harsher impact on Ether. The dynamic has now reversed: in the four hours following Trump’s statement, about 78% of the roughly $25 million liquidated came from short positions, including $12 million out of $13 million in the final hour. Shorts are now paying the price for the recovery.

Technical levels are distinct. Vikram Subburaj, CEO of Giottus, flags $81,000 as the level to watch: new purchases should be made incrementally rather than in a single trade, and it is best to avoid high leverage until Bitcoin reclaims $83,300 and then $85,500 on stronger ETF inflows; a break below $81,000 could drag the market down to $80,000 and then to key on-chain support around $77,200. BitDelta points to $82,000 as a key resistance: a sustained reclaim of this level, alongside Ether holding above $2,500 and narrowing altcoin losses, would stabilize the setup, while a break below $80,316 increases downside risk. Tomorrow marks the first anniversary of the October 10, 2025 flash crash, which saw a record $19 billion liquidated in a single day—roughly 16 times Thursday’s volume; it pays to stay vigilant in thin Friday evening liquidity. Among altcoins, Solana fell 4.13% to $110.51, AVAX lost 4.65% to $10.36, ADA dropped 5.69% to $0.2388, and Ether fell 2.96% to $2,495, while Aptos (-6.97%) and Sonic (-5.36%) were among the few notable underperformers.

Second Story: The “Bunker Mode” Debate and Cryptography Fear

The fourth catalyst contributing to Thursday’s sell-off was a viral post by Ethereum Foundation researcher Justin Drake. Drake argued that thanks to AI, the cryptography underpinning the security of Bitcoin and Ether is at risk of being broken long before the arrival of quantum computers. He urged the blockchain sector to shift into “bunker mode” and called on crypto holders to migrate their funds to new addresses that have never previously signed a transaction. The logic: when a wallet sends a transaction, its public key remains permanently visible on-chain; if elliptic curve cryptography weakens, an attacker could derive the private key from this public key. Addresses that have never sent a transaction lack this exposure.

Yehuda Lindell, Chief Cryptographer at Coinbase, fired back with a sharp response that helped the market recover by the end of the day. According to Lindell, there is no evidence that decades-old hardness assumptions like elliptic curve cryptography have been broken, and asserting that “AI is doing incredible math, therefore elliptic curve hardness is at risk” has no logical basis. More importantly, he highlighted the scale argument: if it were truly broken, the implications for the digital world—including the traditional financial sector—would be massive. Anyone breaking elliptic curve cryptography could forge digital certificates to impersonate bank websites, and create and sign malicious banking applications or even operating systems to load onto people’s phones and computers, completely taking them over.

Lindell calls this the textbook definition of fearmongering: it cannot be proven false, but there is no evidence it is true. The debate divided the sector: Haseeb Qureshi of Dragonfly called the call “very serious and timely,” while Ethereum co-founder Vitalik Buterin noted that risks from AI-accelerated mathematics are real, but argued the threat would come from lattice-based systems rather than elliptic curves. For investors, the takeaway is how quickly a technical debate can translate into price action: an unproven claim contributed to billions of dollars in liquidations within hours in an already nervous market.

Levels to Watch

• Bitcoin ($81,000 / $83,300 / $85,500): Subburaj’s framework for incremental buying and leverage management. A break below $81,000 opens a path to $80,000 and subsequently on-chain support near $77,200; avoiding high leverage is wise until $83,300 is reclaimed.
• Ether ($2,500): BitDelta’s stability threshold. Due to thin liquidity, Ether suffers six times the damage of Bitcoin on equivalent sell volume, which must be factored into position sizing.
• Brent ($100 / $105): Trump’s statement pulled prices down to $103, but Twidale’s question remains open: will he keep his word if attacks intensify? The tanker attack off Qatar and shadow fleet sanctions keep upside risk alive.
• U.S. 10-Year Yield (5.22% / 5.36%): Current level versus Wednesday’s peak. Experiencing its largest weekly drop in three months; The Economist cover reads as a psychological reversal signal, though Waller continues to signal a 75 bps rate hike path.
• EUR/USD (1.1161): Monday’s low. Bear momentum is weakening per Simpson, requiring caution at these levels; however, the bond-protest feedback loop highlighted by Macquarie introduces fresh risk.
• October 10 Anniversary (Tomorrow): Last year saw a record $19 billion liquidated in a single day. Thin Friday evening liquidity is fertile ground for such swings; review position sizes for the weekend.

Calendar for the Week

Date	Day	Event
October 9	Friday	ECB’s Cipollone and Schnabel speak; Brazil September inflation; Canada September employment; South Korea & Taiwan markets closed for holidays; Solana reduces block time to 200 milliseconds (15:00 UTC)
October 10	Saturday	First anniversary of the 2025 flash crash (record $19 billion liquidated that day)
Next Week		U.S. September CPI; Q3 earnings season kicks off October 13 with JPMorgan
October 27	Tuesday	Ethereum Glamsterdam testnet launch on Hoodi
October 28	Wednesday	FOMC meeting (rate hike probability 17%)
November 3		U.S. Midterm elections; Trump stated no attacks on Iran before this date
December 9	Wednesday	FOMC meeting (rate hike probability 83%)