Just one day after Democrats won control of Congress, Washington may be heading back toward conflict with Iran. The Trump administration and the US military are finishing preparations for a possible return to “major” combat operations against Iran.
The report puts at risk a relief rally that had pushed stocks higher, sent oil sharply lower and lifted Bitcoin back to about $81,000.
According to Axios, citing US officials:
- More US military assets are being sent to the Middle East as part of the preparations
- Vice President JD Vance has privately accused Israeli Prime Minister Benjamin Netanyahu of “being wrong on everything” about Iran
- A former Trump adviser told Axios: “It’s one thing to lose the midterms. But Trump doesn’t want to look like a loser twice”
The report follows a Wall Street Journal story saying senior Trump administration officials have been urging the president to restart major military operations against Iran. No decision has been announced.
The Rally This News Could Reverse
Markets had moved sharply in the opposite direction after the midterm results. On the day after the vote:
- S&P 500: up about 1.8%
- Nasdaq: up about 2%
- Oil: down about 9%, to around $87.75 a barrel
- Gold: up about 3.5%
- Silver: up about 5%
- Bitcoin: bounced from about $75,500 to around $81,000
Part of that rally rested on the idea that a divided government would make new strikes less likely. Gareth Soloway, chief market strategist at Verified Investing, said before the Axios report that a more balanced Congress makes it harder for the president to “unilaterally” start bombing Iran again. He added that talk of scaling back the war had raised the odds of a deal.
Oil Is The Key Link
Soloway had expected oil to keep falling, possibly back into the $70s by the end of the year, as hopes for a deal grew. Oil had already broken down from a wedge pattern on the chart, which he said usually signals a bigger move.
A return to fighting could reverse that quickly. Higher oil prices tend to push inflation fears and bond yields up, which usually hurts risk assets such as tech stocks and crypto.
How Crypto Could React
Crypto has reacted to war headlines several times this year. If combat resumes, the likely pressure points include:
- Bitcoin: Soloway flagged $75,500 as the support level where Bitcoin bounced. A renewed sell-off could put it to the test again.
- Altcoins: XRP, Ethereum and other altcoins usually fall harder than Bitcoin when markets turn risk-off.
- Safe havens: Gold and silver, already rallying, could draw more money.
If the preparations turn out to be a bargaining tactic and talks with Iran move forward, the post-midterm rally in stocks and crypto could continue.
What To Watch Next
- Any official statement from the White House or the Pentagon
- Oil prices, especially if crude moves back above $90
- Whether Bitcoin holds its $75,000 to $76,000 support zone
- Any response from Iran or Israel
Markets are now waiting for Trump’s next move.
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