Tensions rise in the Middle East, Bitcoin drops along with US stocks

Amid escalating tensions in the Middle East and easing rate cut expectations, major U.S. stock indices closed lower, with the 10-year U.S. Treasury yield rising above 4%. Bitcoin slid from yesterday's high of $64,478, while Ether dropped from $2,521, and nearly all assets except for crude oil saw a widespread decline.

One Year Since the Start of the Gaza War, Conflict Shows No Signs of Abating

As the conflict between Israel and the Palestinian armed group Hamas, known as the Gaza War, marks its one-year anniversary since the unprecedented attack on southern Israel by Hamas on October 7 last year, Israeli authorities held commemorative events, with Prime Minister Netanyahu vowing to continue the fight.

Yesterday evening, many areas in central Israel issued air raid alerts, and the Israeli military confirmed the successful interception of a missile fired from Yemen. Danish authorities also reported another explosion near the Israeli embassy on October 7. Reports indicate that the Israeli military is preparing for a military retaliation against Iran. US President Biden suggested over the weekend that Israel should refrain from attacking Iranian oil facilities to prevent the Middle East from descending into full-scale war.

The tension in the Middle East has driven international oil prices higher, with Brent crude oil surpassing $80 per barrel and energy stocks rising against the trend.

Earnings Season Approaching, Market Focuses on Thursday's CPI Data

Last Friday's better-than-expected non-farm payroll data boosted investor confidence in the outlook for the US economy and dispelled expectations of a significant rate cut at the November Federal Reserve meeting. US Treasury bond yields rose to their highest levels since the summer.

Strong non-farm payrolls led to a rise in US stocks, with Bitcoin surpassing $62K again.

This week's focus will be on the Federal Reserve meeting minutes on Wednesday and the release of the Consumer Price Index (CPI) on Thursday.

Major US banks will kick off the third-quarter earnings season this week, and the market will closely monitor whether corporate earnings can withstand the pressures of high interest rates and inflation.