The drop on Monday was pretty brutal. US stocks collectively stalled, gold plunged below the $4,200 mark, Bitcoin even briefly broke the $90,000 support line, and even crude oil couldn’t hold up, dropping directly below 60 and breaking through the 50-day moving average. The declines themselves weren’t the worst part—the real blow came from the signals behind them: US Treasury yields and the US dollar index surged together, which basically means capital is fleeing risk assets like crazy.

This round of selling wasn’t just baseless panic. Let’s start with the trigger: the collapse in the Japanese bond market spread to US Treasuries, with the 10-year yield shooting up to 4.16%, almost hitting the recent ceiling. From an expectations perspective, the market has stopped hoping for real Fed easing—even if there’s a rate cut, it’s expected to be just for show: no promises for further moves, purely a technical adjustment, not an actual policy shift.

The most critical blow came from top Fed chair candidate Hassett’s comments. He publicly stated that it’s irresponsible to pre-set a six-month interest rate roadmap, and that the Fed will only move step by step based on data, explaining its actions but not making grand promises. After his statement, traders immediately cut 2026 rate cut expectations from three times to two. But the real issue isn’t one less rate cut; it’s the long-term stance he signaled: the Fed won’t give clear commitments in the future, won’t pursue aggressive easing, and won’t get deeply tied to any political forces. That has far more impact than how many basis points are cut right now.

Sensing the market was about to spiral out of control, Trump quickly threw out a rescue “sweetener,” saying details on US chip exports to China were being finalized and that NVIDIA’s H200 might get approved. This move barely managed to halt the stock market’s decline, but the problem is it’s propped up by a policy boost, not a genuine rebound in market sentiment.

To put it plainly, the market didn’t really blow up on Monday—everyone’s holding their breath to see if the other shoe will drop on Wednesday. Volatility is still relatively contained, but the fear index is quietly climbing. Looking at it another way, the market is already starting to price in the worst-case scenario in advance—which might not be a bad thing.