Markets, AI Rally Rattled as Trump Calls Iran Ceasefire “On Life Support”

• Trump called the Iran ceasefire on life support after rejecting Tehran’s proposal as garbage.
• Brent crude rose to $105 as silver jumped 7% and traders rushed into safe haven assets.
• US CPI forecast at 3.7% raising fears Fed may hike rates rather than cut them this year.

Global markets turned cautious on Tuesday after President Trump declared the US-Iran ceasefire was “on life support,” describing Tehran’s latest counterproposal to end the war as “garbage.”

Oil responded immediately. Brent crude futures rose 0.7% to $105 a barrel. Silver jumped over 7% as traders rushed back into safe haven assets. Bitcoin held above $81,000 but remained under pressure as risk appetite faded across the board.

What Iran Proposed 

Iran’s response to the US peace proposal included demands for war reparations, confirmation of Iranian sovereignty over the Strait of Hormuz, an end to sanctions, and the unfreezing of Iranian assets. 

Trump rejected the package outright, signalling that any meaningful progress toward reopening the Strait remains distant while those conditions stay on the table. Ships are not moving freely through the Strait of Hormuz, and oil prices are reflecting that reality.

Additionally, President Trump is scheduled to visit China on Wednesday, but expectations are low for meaningful progress on either the Iran situation or trade. Analysts have framed the visit in purely defensive terms.

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The AI Bubble Warning Getting Louder

Amid the geopolitical noise, two separate warnings about the AI stock rally gained traction on Tuesday. Michael Burry said the current AI rally resembles “the last months of the 1999 to 2000 bubble.” 

Fidelity’s Jurrien Timmer separately noted the current AI trade is tracking almost exactly like the internet boom 27 years ago, with the Goldman Sachs datacenter basket following a trajectory that points toward a sharp late-stage rally before a potential peak.

Markets on Edge Ahead of CPI

Beyond the geopolitical tension, markets are waiting on US inflation data due later Tuesday. The headline consumer price index is forecast to climb to 3.7% year on year, a reading that would further damage already diminished expectations for Federal Reserve rate cuts this year.

Any signal that the Fed may need to raise rates rather than cut them would represent a significant shift from where investors stood before the conflict began. S&P 500 futures dipped 0.2%. MSCI’s broadest index of Asian shares excluding Japan fell 1%. South Korea’s KOSPI slid 3%. European futures dropped 1%.

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