US inflation accelerated sharply in March as rising oil prices linked to the Iran conflict pushed costs higher.
Brent crude surged to near four-year highs before retreating amid escalating geopolitical tensions.
Bitcoin hovered near key support around $75,000 as investor positioning tightened.
Meanwhile, Meta Platforms shares fell despite strong earnings, while Alphabet Inc. rallied on robust cloud growth.
US inflation rises as growth improves modestly
US consumers faced renewed price pressures in March, with inflation rising at its fastest monthly pace in nearly two years.
The personal consumption expenditures (PCE) index climbed 0.7% during the month, while annual inflation accelerated to 3.5%, marking the highest level since spring 2023.
Core inflation, which excludes food and energy, remained elevated at 3.2% annually, reinforcing concerns that underlying price pressures persist.
The increase was largely driven by higher gasoline and energy costs as geopolitical tensions between the US and Iran intensified.
At the same time, the US economy showed resilience. Gross domestic product expanded at a 2% annualised pace in the first quarter, up from 0.5% in the prior quarter.
Growth was supported by steady consumer demand and a sharp rise in business investment, particularly in artificial intelligence.
Consumer spending rose 0.9% in nominal terms, though real spending increased just 0.2%, indicating inflation is eroding purchasing power.
The combination of firm growth and rising prices presents a complex backdrop for the Federal Reserve as it weighs its policy path.
Brent crude volatile as geopolitical risks deepen
Oil markets remained highly sensitive to developments in the Middle East.
Brent crude surged to as high as $126 per barrel before falling more than 3% to settle near $114, while US West Texas Intermediate crude slipped to around $105.
The volatility follows reports that the US military may present plans for potential action against Iran, alongside an ongoing blockade that has constrained supply. Since late February, both Brent and WTI have rallied roughly 60%.
Analysts warn that continued supply constraints, particularly through the Strait of Hormuz, could keep prices elevated, with some projections suggesting oil could climb toward $140–$150 per barrel if disruptions persist.
Bitcoin consolidates near key $75,000 support zone
Bitcoin is trading near $76,350, hovering just above a cluster of key cost-basis levels that have emerged as critical support.
The $75,000 level has become a focal point, aligning with the average cost basis for recent investors and sitting close to institutional positioning via US spot ETFs at around $76,700.
This clustering has increased price sensitivity within a tight range.
Derivatives data suggests a liquidity corridor between $74,000 and $80,000, with significant liquidation risks on both sides.
Roughly $2.69 billion in long positions are at risk near $74,000, while short liquidations near $80,000 total about $4.48 billion.
Analysts note that holding above key realized price levels signals stronger investor conviction, though a decisive breakout is needed to shift momentum more firmly bullish.
Meta falls while Alphabet rallies on AI-driven divergence
Shares of Meta Platforms dropped around 8% despite reporting better-than-expected earnings, as investors reacted negatively to rising capital expenditure tied to artificial intelligence.
Meta posted strong results, with earnings per share of $10.44 and revenue of $56.3 billion, but raised its capex outlook to $135 billion.
The increased spending weighed on sentiment and pressured free cash flow.
Chief Financial Officer Susan Li said, “Our experience so far has been that we have continued to underestimate our compute needs.”
Analysts expressed caution about returns on investment, with some lowering price targets despite maintaining positive ratings.
In contrast, Alphabet Inc. shares surged 9% to a 52-week high after delivering strong earnings and robust cloud growth.
Revenue rose 22% to $110 billion, while Google Cloud sales jumped 63%.
CEO Sundar Pichai highlighted strong demand for AI-driven services but acknowledged capacity constraints, saying, “Our cloud revenue would have been higher if we were able to meet the demand.”
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