The three major US stock indices continued their strong upward momentum this week. The Nasdaq Composite rose 1.19%, the Dow Jones Industrial Average gained 1.13%, and the S&P 500 advanced 0.81%. Since April, the S&P 500 has rallied approximately 16%, notching nine consecutive weekly gains—its longest winning streak since 2023. AI remains the central driving force, with chip and storage sectors leading the way as the AI infrastructure “arms race” narrative continues to receive positive feedback from capital markets.
Geopolitical developments showed divergence. On one hand, former President Trump indicated that US-Iran negotiations were progressing smoothly, with discussions on extending the ceasefire and reopening the Strait of Hormuz continuing, leading to a phased reduction in the market’s tail-risk expectations for a full-scale Middle Eastern conflict. On the other hand, Israel announced an expansion of its ground operations in Lebanon, and joint US-Israeli military actions triggered a new round of regional tensions, pushing Brent crude up about 1.3% to near $93 per barrel. Energy market volatility reflects the current macro pricing paradox: AI-driven tech investment fever has dampened recession fears, but unstable energy supply, sticky core inflation, and the second downward revision of US first-quarter GDP to an annualized 2.5% still leave the Federal Reserve with little room for aggressive rate cuts. Copper prices also rose further as US tariff reviews approached, with Goldman Sachs and Citigroup both raising their full-year price targets.
Newly appointed Fed Chair Kevin Warsh was officially sworn in on May 22. The market views the June 17 FOMC meeting chaired by him as a pivotal moment for second-half macro pricing. According to the latest CME FedWatch data, the probability of holding rates steady in June is as high as 99.4%, and the July probability also stands at 93.0%, indicating extremely limited near-term rate-cut expectations. Persistently high US bond yields mean the macro financial environment has effectively imposed a “stealth rate hike” of roughly 75 basis points, exerting implicit pressure on risk asset valuations. Last week, the US Dollar Index slipped to 98.942, the 10-year Treasury yield fell to 4.437%, and gold settled at $4,538—reflecting the market’s dual pricing of “higher-for-longer rates and rising safe-haven demand.” The upcoming May non-farm payrolls report will be a key variable for confirming the Fed’s subsequent policy path.
Additionally, the Japanese yen continued to weaken, falling 1.7% in May and approaching the critical 160 level against the dollar. Japan’s Ministry of Finance reportedly spent approximately $7.36 billion on intervention over the past month, but leveraged funds’ bearish bets against the yen have climbed to their highest since July 2024. If the Bank of Japan unexpectedly raises rates at its June 16 meeting, unwinding global carry trades could marginally tighten liquidity, posing a potential headwind for both tech stocks and crypto assets.
Crypto Market: Persistent ETF Outflows and Capital Pressure
The crypto market extended its pullback this week, clearly diverging from the new highs in US equities. BTC opened the week around $77,267 and fell to about $72,675 by June 1, a weekly decline of roughly 6%. ETH dropped about 4.5% over the same period, with the ETH/BTC ratio remaining essentially flat, indicating that both assets were under similar capital pressure rather than ETH weakening independently. ETF outflows were particularly severe. US spot Bitcoin ETFs recorded their longest streak of consecutive daily net outflows since their January 2024 launch: nine straight trading days for a cumulative total of approximately $2.8 billion. Among them, BlackRock’s IBIT saw its largest single-day net outflow of roughly $528 million, its second-largest ever. Spot Ether ETFs also posted 13 consecutive days of net outflows, totaling around $694 million. The Crypto Fear & Greed Index dropped further from 39 to 29, entering “fear” territory.
On the derivatives front, BTC open interest declined in tandem with price, and Deribit options skew climbed back to around 16%, with put premiums approaching extreme levels—underscoring a marked increase in hedging demand. Total stablecoin market cap shrank by about $2.758 billion over the past seven days, and on-chain spot buying power remained weak. Overall, the crypto market lacks independent incremental capital inflows and remains suppressed by the diversion of institutional funds into AI-driven tech assets.
Institutional Moves: DTCC Tokenization and AI IPO Siphon
On May 27, DTCC subsidiary DTC announced plans to connect its tokenized asset services to the Stellar public blockchain, targeting a go-live date in the first half of 2027. The service will cover tokenized issuance, corporate action processing, and cross-chain interoperability for blue-chip stocks, ETFs, and US Treasuries. DTCC processes roughly $4.7 quadrillion in securities transactions annually, and its integration with Stellar means that tokenized equities are officially entering the core US securities settlement infrastructure, rather than remaining confined to on-chain issuance layers built by standalone platforms. Following the news, XLM surged more than 30% in a single day, with 24-hour trading volume skyrocketing over ninefold.
From a broader macro perspective, Anthropic officially filed its S-1 on June 1, and SpaceX is also moving forward with a large-scale IPO. The combined potential fundraising of these two offerings could exceed $100 billion. Historically, mega-IPOs often create a short-term liquidity siphon in secondary markets, meaning high-beta risk assets like AI tech stocks and crypto will face phased capital withdrawal pressure. In summary, the biggest macro headwind for crypto at present is the continued strengthening of the AI sector. With high-valuation tech assets such as Anthropic and SpaceX successively tapping public market liquidity, the window for crypto to rally independently remains narrow. Should the AI bubble deflate in the future, BTC could undergo a significant correction in tandem—but that very moment might also mark the formation of a bottom for the next crypto cycle.
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