Tariff Threats Weigh on Risk Assets as Oil Rallies Above $100

Geopolitical tensions and trade policy uncertainty are creating divergent pressures across commodity and equity markets. Proposed tariffs on major trading partners have sparked a broad reassessment of risk appetite, with equities and cryptocurrencies retreating while crude oil strengthens above the $100 per barrel threshold, supported by supply concerns including recent drone strikes on critical Middle Eastern infrastructure.

Bitcoin has slipped toward $94,000 as investors flee riskier assets amid the tariff-driven market turbulence. Meanwhile, U.S. equity futures remain volatile despite Deutsche Bank's bullish year-end forecast for the S&P 500, as the macro environment grows increasingly uncertain. The dollar has strengthened on expectations of potential Federal Reserve tightening, adding headwinds to alternative assets that typically benefit from a weaker greenback.

Oil markets are receiving additional support from supply-side pressures, including elevated U.S. rig counts and refinery constraints that have prompted consideration of emergency production measures. The combination of geopolitical risk premiums and tight capacity suggests crude will remain supported, even as broader market sentiment deteriorates on trade policy concerns.