May 13 Market Recap: Nasdaq Reverses April Gains, Oil Price Surpasses $100, Bitcoin Drops Below $80,000
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May 13 Market Recap: Nasdaq Reverses April Gains, Oil Price Surpasses $100, Bitcoin Drops Below $80,000
The taste of stagflation is back.
Navigating Web3 tides with focused insightsAuthor: TechFlow
On Tuesday, Wall Street opened to a hotter-than-expected CPI report.
The April CPI rose 3.8% year-on-year—the highest since May 2023—exceeding the market’s forecast of 3.7%. Core CPI rose 2.8% year-on-year, also above the expected 2.7%. The figure itself was already unattractive; what made it worse was the underlying logic: energy prices were the primary driver behind the renewed acceleration in inflation—and the root cause of rising energy prices was Iran.
The Strait of Hormuz remains nearly paralyzed. Saudi Aramco CEO Amin Nasser warned that the market is losing roughly 100 million barrels of crude oil supply per week; if the impasse continues, normalization may not occur until next year. One day before the CPI release, Trump labeled Iran’s ceasefire agreement as “on life support” and dismissed Tehran’s counterproposal as “garbage.” CNBC reported at midday that Trump is now seriously considering resuming military action against Iran.
Higher inflation, higher interest rates, and a looming war—these three factors converging should, by textbook definition, trigger a triple sell-off across equities, bonds, and commodities. Yet today’s market refused to follow the textbook.
U.S. Equities: Dow turns green; Nasdaq surrenders its April gains
The Dow Jones Industrial Average rose 56.09 points to close at 49,760.56—a gain of 0.11%. This was an extremely marginal green close: the index had fallen as much as 255 points intraday and only edged into positive territory thanks to a late-session rally.
The S&P 500 fell 0.16% to 7,400.96, while the Nasdaq dropped 0.71% to 26,088.20. The Russell 2000 briefly plunged over 2% intraday before narrowing its losses at the close.
This was a market propped up by defensive stocks. Walmart rose 2.15%, UnitedHealth Group gained 2.06%, JPMorgan Chase rose 1.68%, and Merck climbed 1.48%—a classic “buy essentials and healthcare when inflation rises” trade.
What got sold were the two hottest Wall Street narratives of the past two months: AI and semiconductors.
Micron fell 3.6%, giving back a small portion of its 37% weekly and 53% monthly gains. AMD declined 2%, while Qualcomm plunged 11%—a particularly sharp drop, especially given its 39% surge in April. SanDisk fell 4%, Intel dropped 4%, and TSMC declined nearly 2%. Among the S&P 500’s 11 sectors, technology led declines with a 1.5% loss; consumer discretionary fell 0.93%, industrials dropped 0.4%, and materials slid 0.2%.
Zooming out: Today, both the Nasdaq and Russell 2000 narrowed losses from over 2% intraday to under 1% at the close—a V-shaped reversal that itself signals both buyers accumulating and sellers cutting losses remain active in the market. No one truly wants to sell chips outright—but every time prices rise to this level, some participants offload positions.
The VIX rose 6.9% to 18.38—high enough to keep investors awake, but not high enough to trigger alarm. The 10-year Treasury yield continued climbing alongside oil prices, presenting the real trouble for tech stocks: discount rates have returned to levels they dislike most.
David Einhorn told CNBC on the sidelines of the Sohn Conference that he admitted missing the past six weeks’ V-shaped rebound—but still considers equity valuations “extremely, extremely expensive.” That remark may sound like hindsight now, but note this: the last time the S&P 500 stood near all-time highs while 50% of its components traded below their 50-day moving averages was from December 1998 to March 2000.
Oil: Breaching $100/barrel; “Ceasefire Agreement on Life Support”
On Tuesday, WTI crude for June delivery surged 4.19% to $102.18/barrel; Brent crude rose 3.4% to $107.77/barrel.
This is a candlestick written directly onto the face of inflation.
The April ceasefire agreement began leaking air from day one. Ten weeks later, the Strait of Hormuz—the critical waterway handling 20% of global oil shipments—remains functionally closed. Trump’s use of terms like “garbage” and “on life support” in diplomatic language approaches pre-war rhetoric; meanwhile, reports indicate the Pentagon is reassessing two options: “using force to reopen the Strait of Hormuz” and “escorting commercial vessels.”
The last time oil breached $100 was during the initial days of the 2026 war. Its return today forces markets to confront a more uncomfortable reality: this conflict is no longer a short-term event—it is becoming a new baseline price reality.
Energy stocks benefited directly. The XLE Energy ETF rose 2.6%, outperforming all other sectors. But the cost is already evident in the CPI report: energy contributed significantly to the 0.4 percentage-point jump in April’s inflation reading.
Barclays has raised its oil price target to $100, and Saudi Aramco CEO Nasser’s comment about “losing 100 million barrels per week” continues echoing through markets. If that holds true, returning oil prices below $80 this year will require a ceasefire—not merely technical corrections.
Gold & Silver: Even Safe Havens Aren’t Safe
If any data could shatter the simplistic notion that “inflation is gold’s friend,” it was Tuesday’s performance of gold and silver.
Spot gold fell 0.82% to $4,704.25/ounce, dipping briefly below $4,690. Silver fell to $84.53/ounce, down approximately 1.09%—despite having surged over 6% just the day before.
Why did gold and silver fall?
First, the U.S. dollar rebounded. With CPI exceeding expectations, markets rapidly erased “rate cuts this year” from probability distributions. CME FedWatch data shows traders now assign over a 70% probability to a rate hike before April 2027; rate cuts this year are now “effectively ruled out.” A stronger dollar inevitably weighs on gold and silver.
Second, real yields rose. The 10-year Treasury yield climbed alongside oil prices and inflation expectations. Gold pays no coupon and always moves inversely to real yields.
Third, silver’s industrial exposure backfired. Silver is never a pure safe-haven asset—it’s also an industrial metal. Monday’s 6% rally was driven by dual logic: “AI data center copper demand spillover + safe-haven demand”; Tuesday’s decline reflected a swift reversion to “recession fears.”
Yet on the flip side: gold is still up ~43% year-to-date and has risen $1,463/ounce over the past year. This pullback looks more like healthy profit-taking than a trend reversal.
Cryptocurrencies: Bitcoin breaches $80,000
According to CoinGecko, Bitcoin dipped as low as ~$80,389 on Tuesday before stabilizing near the $80,000 level. Recall that just Monday morning, BTC opened at $82,164—the strongest opening since January 31. From “strongest opening” to “breaching $80,000”—all within one trading session.
Ethereum fared even worse. It opened at $2,339 and plunged nearly 3% intraday to $2,259. Wu Blockchain cited an internal Fundstrat forecast suggesting ETH could fall to the $1,800–$2,000 range in the first half of this year; Tuesday’s price is already just 10% away from that zone.
Global crypto market capitalization stood at ~$2.77 trillion, down ~1.4% on the day. Bitcoin’s dominance held steady at 58.3%—a sign that, during broad selloffs, “BTC dominance” usually means altcoins suffer even more.
The selloff stemmed from several overlapping triggers:
First, macro risk appetite flipped off. CPI breaking 3.8%, vanishing hopes of rate cuts, and oil breaching $100—all adverse catalysts for risk assets converged on the same day. Crypto sits at the farthest end of the risk-appetite curve.
Second, leveraged liquidation cascades. Market analysis indicates BTC triggered systemic margin calls after falling below the critical 100-week moving average at $85,000. During thin liquidity periods, forced liquidations of leveraged positions reinforce themselves—each “wicked move” ignites the next.
Third, the ETF “faucet” problem. Institutional inflows via ETFs have noticeably slowed versus last year. Year-to-date, U.S. spot Bitcoin ETFs have recorded net outflows of ~$4.5 billion—the weakest start since their January 2024 launch. This implies weakening marginal buying power and fewer buyers to absorb selling pressure.
The sole “positive” came from politics: On Tuesday, the Senate confirmed Kevin Warsh’s nomination to the Federal Reserve Board by a 51–45 vote. Warsh is widely perceived as crypto-friendly. Yet this upside clearly couldn’t offset today’s losses. Markets are less concerned about Powell stepping down on May 15—and more anxious about how much higher oil prices will climb over the next two days.
Today’s Summary: Stagflation’s scent returns
May 12 saw markets simultaneously weighed down by three data points:
Equities: The Dow rose 0.11% on defensive stocks; the Nasdaq fell 0.71%; AI and chip stocks entered their first wave of profit-taking.
Oil: WTI surged 4.19% to breach $102/barrel; “ceasefire agreement on life support.”
Gold: Unusually fell 0.82% to $4,704/ounce as the dollar and real yields rebounded—even safe havens couldn’t escape.
Crypto: Bitcoin breached $80,000 to a low of $80,389; Ethereum plunged to $2,259.
The market now focuses on one question: Has stagflation truly arrived?
If Iran-related tensions genuinely ease over the next two weeks—e.g., ceasefire talks restart, Strait of Hormuz traffic resumes—oil would likely fall first, CPI expectations would moderate, and risk assets would rebound collectively—with crypto exhibiting the greatest elasticity.
If Trump indeed orders a resumption of military strikes, oil approaching $120/barrel ceases to be hypothetical. The S&P 500 would likely drop another tier, and Bitcoin’s next test would be the $70,000 support level.
But at least today, one signal is unmistakable: when both safe-haven and risk assets fall simultaneously, markets are repricing something even more unsettling—the purchasing power of the U.S. dollar itself is being eroded by inflation, and the Fed has run out of ammunition.
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