Those who have been closely watching the international situation should have noticed that negotiations between Iran and the U.S. directly broke down in mid-April. The U.S. military subsequently announced a maritime blockade against Iran, and this series of moves directly ignited the energy markets.

At the time, WTI crude oil surged by more than 10% at one point, breaking through the $100 mark and reaching $105.6. Gold also fell below the psychological threshold of 4700. On the crypto front as well, Bitcoin and Ethereum were not spared—they both declined. My impression at the time was that the market’s pricing of geopolitical risk was still being continuously adjusted, because no one could be sure what this standoff would ultimately turn into.

Even more worth paying attention to is that this shock directly showed up in the United States’ inflation data. In March, the CPI rose 0.9% month over month, the largest single-month increase since June 2022. Year over year, it climbed to 3.3%. Gasoline prices also set a record, the highest since 1967. This means the secondary round transmission effects of the energy shock are already starting to appear, and subsequent upward price pressures may continue.

What impressed me most was the consumer confidence index. The University of Michigan’s April preliminary reading plunged from 53.3 in March to 47.6, hitting a record low. This reflects not only concern about rising energy prices, but deeper pessimism about the overall economic outlook. One-year inflation expectations jumped sharply from 3.8% to 4.8%, and such a rapid rise in expectations often reinforces itself.

In terms of the stock market, performance was relatively mixed. The three major U.S. indices moved in different directions: the Dow fell 269 points, the S&P 500 rose 0.35%, and the Nasdaq fell 0.11%. Interestingly, the Philadelphia Semiconductor Index rose 2.31%, while the China Golden Dragon Index also rebounded 0.31%, indicating that market views on technology and Chinese stocks still have some support. European stocks generally fell: Germany’s DAX fell 0.01%, the UK’s FTSE fell 0.03%, and only France’s CAC rose 0.17%.

At the time, IMF Managing Director Kristalina Georgieva warned that even if a ceasefire agreement could be maintained, it would still take a considerable amount of time for global prices to return to pre-war levels. This suggests that the impact of this shock is not short-term, but structural.

Looking back now, the market response at the time was still relatively rational. In the crypto market, Bitcoin is currently trading at $77.73K, down 0.40% over the past 24 hours, and Ethereum is at $2.32K, up 0.10% over the past 24 hours. Compared with the panic-driven selloff back then, it has already stabilized to some extent. However, the economic uncertainty brought by this geopolitical conflict still remains and is worth continuing to watch.