TL;DR
The S&P 500 crossed 7,500 for the first time on AI optimism, but rising macro risks triggered a sharp Friday reversal, hurting small caps the most.
Hotter-than-expected CPI and PPI data, along with surging crude oil prices, shocked the market. This broad inflation has forced investors to abandon hopes of a rate cut and brace for a potential Federal Reserve rate hike.
April retail sales show that while American consumers are still spending, a growing share of that spending is driven by elevated gasoline expenditure rather than genuine demand.
STRC recorded US$3B in trading volume and reclaimed par value, reopening a key funding channel for Strategy, which purchased 535 BTC (~US$43M) and increased total holdings to 818.9k BTC.
HYPE stood out as the only major outperformer, gaining 7.6% despite broader market weakness, supported by HIP-4 expectations, pre-IPO listings, and deeper USDC ecosystem integration.
On the institutional side, JPMorgan Chase is preparing to launch a tokenized money market fund tailored for stablecoin issuers, while Hana Bank acquired a US$670M stake in Dunamu, the operator of Upbit.
Macro Overview
AI-led Equities Met An inflation-driven Rate Shock, with April Inflation Materially Challenging The Easing Narrative
US stocks hit a big milestone last week when the S&P 500 closed above 7500 for the first time. Excitement over AI tools kept the market moving up early in the week, but investors sold off shares for profit on Friday. Main indexes still made small weekly gains, with the S&P 500 up 0.31% and the Nasdaq up 0.34%. However, fewer stocks joined the rally, and small companies took a big hit as the Russell 2000 dropped 2.48%. This shows that while AI is still a strong theme, expensive tech stocks are easily hurt right now. When oil prices, inflation data, and bond yields all jump together, the pressure quickly forces stock prices down.
The April inflation data delivered a severe blow to market sentiment as both CPI and PPI indicators accelerated sharply. Headline CPI rose 0.6% MoM, lifting the annual rate to 3.8% YoY, while energy costs surged by 17.9% YoY. Even more concerning was the PPI report, which jumped 1.4% MoM and 6.0% YoY, marking the largest annual increase since late 2022. Because these price pressures spanned across goods, energy, and services margins, investors realized this was a broad economic problem rather than a temporary gasoline shock. This sticky inflation has fundamentally shifted the macro landscape, forcing fixed-income markets to reprice risk as expectations pivot away from rate cuts toward a potential Federal Reserve interest rate hike.
April retail sales increased 0.5% MoM and 4.9% YoY, matching economic expectations and confirming that American consumers continue to spend. However, much of this nominal growth was driven by higher gasoline prices rather than increased volume. While core retail sales rose 0.5% for a fourth straight monthly gain, the underlying data suggest that inflation is eating into real purchasing power. Coupled with steady initial jobless claims at 211,000, the economy shows resilience, with no signs of an imminent recession. This combination supports corporate revenues and nominal GDP, but it also creates a major dilemma for the Federal Reserve. Strong consumer demand amid renewed energy inflation eliminates any immediate incentive for policy easing, reinforcing a tougher macroeconomic environment.
Oil prices surged last week as geopolitical tensions between the US and Iran remained unresolved. WTI crude jumped 7.36% to settle at 105.42 dollars while Brent crude rose 5.06% to end at 109.26 dollars following strict warnings from President Trump. This sharp market reaction matters because it transmits geopolitical risk directly into headline inflation and elevates global transport costs. Investors are no longer viewing this energy shock as a temporary supply disruption but as a persistent structural threat. This shift is heavily influencing central bank reaction functions because rising energy costs threaten to embed inflation expectations deeply, ultimately pushing bond yields higher and tightening global financial conditions.
Next week’s economic calendar is heavily concentrated on Thursday morning with critical data on housing, jobless claims, and the Philadelphia Fed survey. Investors will closely watch the FOMC minutes to evaluate the central bank’s stance on inflation persistence. Additionally, the flash S&P Global PMIs will serve as a key market catalyst. If these activity indicators remain strong and price inputs stay high, the recent Treasury selloff could intensify. Conversely, any sharp weakness in the services sector could prompt equity markets to shift heavily toward defensive stocks. (1)
DXY
The U.S. Dollar Index rose by 1.25% from 98.04 to 99.27. The greenback benefited from the exact macroeconomic mix that pressured equities and gold by the weekend. Hotter inflation data and surging Treasury yields boosted the currency’s yield advantage. Additionally, persistent geopolitical uncertainty drove global investors toward liquid reserve assets, reinforcing the dollar’s safe-haven appeal and signaling tighter financial conditions ahead. (2)
US 10-Year and 30-Year Bond Yields
The U.S. 10Y yield rose from 4.39% to 4.59%, a move of 20.3 bp. The 30Y yield rose from 4.97% to 5.13%, or 16.1 bp. Long-end yields reflected inflation risk, oil persistence, and term-premium rebuilding rather than growth optimism alone. (3)
Gold
Gold futures weakened from $4,729.50 to $4,555.80, down -3.67%. The decline was consistent with Friday’s stronger dollar and higher real-rate pressure. Geopolitical risk supported safe-haven demand, but the rates-and-dollar channel dominated. (4)
Crypto Markets Overview
Main Assets
ETH/BTC Ratio
BTC fell 8.1% last week, while ETH declined 10.2%. Spot BTC ETFs recorded $1B in net outflows, ending five consecutive weeks of net inflows. Spot ETH ETFs also saw $255.1M in net outflows. (5)
Market sentiment weakened notably, with the Fear & Greed Index dropping to 28 and moving back into the Fear zone from Neutral last week. (6)
Total Market Cap
Crypto Total Marketcap
Crypto Total Marketcap Excluding BTC and ETH
Crypto Total Marketcap Excluding Top 10 Dominance
The total crypto market cap declined 5.8% last week. Excluding BTC and ETH, the market fell 4.3%, while the broader altcoin market, measured by market cap excluding the top 10 assets, dropped further by 8.1%.
STRC Performance
STRC recorded US$3B in trading volume last week, with US$2.2B traded above par and US$756M traded below par.
On May 11, STRC reclaimed par value, reactivating one of Strategy’s key funding channels for BTC accumulation. Strategy purchased 535 BTC for ~US$43M at an average price of US$80.3k/BTC, marking its smallest acquisition of 2026 and bringing total holdings to 818.9k BTC.
Among Strategy’s financial instruments, STRC accounted for 93% of total trading volume, up from 79% the previous week. The next largest were SATA (Strategy’s variable-rate perpetual preferred stock) at 3.9% and STRK (Convertible perpetual preferred stock) at 1.4%. (7)
Top 30 Crypto Assets Performance
Source: Coinmarketcap and Gate Ventures, as of 18th May 2026
Among the top 30 assets, prices declined 5.3% on average, HYPE is the only asset having significant gain.
HYPE gained 7.6% despite broader token price weakness. The key catalysts remain centered around ecosystem expansion and new product verticals, including growing expectations for HIP-4 outcome/prediction markets and new asset listings such as pre-IPO trading. (8)
Coinbase’s expanded partnership with Hyperliquid to grow USDC onchain trading also reinforces liquidity depth and collateral efficiency across the ecosystem. (9)
The Key Crypto Highlights
Tezos launches quantum-resistant private payments prototype on testnet
Tezos developers launched TzEL, a quantum-resistant private payments prototype on testnet that combines post-quantum cryptography and zk-STARK proofs to protect transaction data against future "harvest now, decrypt later" attacks. The system also leverages Tezos’ Data Availability Layer to address scalability challenges from larger proof sizes (~300KB), marking an early step toward post-quantum blockchain privacy infrastructure. The launch comes as the broader crypto industry accelerates preparations for potential quantum computing risks, though timelines for real-world threats remain debated. (10)
JPMorgan to launch tokenized money market fund for stablecoin issuers
JPMorgan filed to launch JLTXX, a tokenized money market fund on Ethereum that allows stablecoin issuers to hold reserve assets in a regulated, yield-bearing vehicle while earning interest. The fund will invest in US Treasury bills and overnight repo agreements, targets compliance with the GENIUS Act, and will be managed by JPMorgan’s blockchain unit Kinexys Digital Assets. The move follows similar initiatives from Morgan Stanley and reflects a broader trend of traditional financial institutions moving stablecoin reserve infrastructure toward tokenized, onchain financial products. (11)
DTCC to use Chainlink for 24/7 collateral management network
DTCC will integrate Chainlink infrastructure into its Collateral AppChain platform ahead of a planned Q4 2026 launch, aiming to support near real-time movement, valuation and settlement of tokenized collateral across financial markets and blockchains. The platform is designed as shared infrastructure for custodians, triparty agents and collateral managers, with Chainlink helping automate margining, collateral optimization and settlement workflows. The move highlights growing institutional demand for tokenized collateral infrastructure, as major market infrastructure players push toward 24/7 trading, instant settlement and improved capital efficiency. (12)
Key Ventures Deals
Deutsche Bank and Nasdaq back Elliptic in $120M funding round
Blockchain analytics firm Elliptic raised $120 million in a new round backed by Deutsche Bank and Nasdaq’s venture arm, with One Peak Partners leading the investment. The round values Elliptic at $670 million and will be used to expand adoption of its crypto compliance, blockchain analytics and risk-monitoring services globally. The investment reflects growing demand from large financial institutions for digital-asset compliance infrastructure as banks and market infrastructure providers continue expanding into crypto and tokenized assets. (13)
Onramp raises $12.5M Series A to expand bitcoin custody infrastructure
Bitcoin financial platform Onramp raised a $12.5 million Series A round at a $135 million valuation led by Early Riders to expand its Multi-Institution Custody (MIC) platform, which distributes bitcoin custody across multiple regulated institutions including BitGo, Coincover and Tetra Trust. The company plans to use the funding to scale Onramp Finance — a broader bitcoin-focused platform spanning brokerage, cash accounts, spending cards, IRAs and treasury services — while expanding partnerships with banks, advisors and fintechs. The raise reflects growing institutional demand for custody models that reduce single points of failure as larger investors increasingly seek secure and regulated infrastructure for long-term bitcoin exposure. (14)
Hana Bank acquires $670M stake in Upbit operator Dunamu
Hana Bank agreed to acquire a 6.55% stake in Dunamu, the operator of South Korea’s largest crypto exchange Upbit, for approximately US$670 million, marking the largest investment by a South Korean bank into a digital asset company to date. The deal will make Hana Bank Dunamu’s fourth-largest shareholder and builds on an existing partnership between the two firms around blockchain-based financial services, including cross-border remittance infrastructure. The investment signals a broader shift among Korean banks from partnering around crypto to taking direct ownership exposure as traditional financial institutions deepen participation in digital asset infrastructure. (15)
Ventures Market Metrics
The number of deals closed in the previous week was 14, with Infra having 12 deals, and DeFi having 2 deals.
Weekly Venture Deal Summary, Source: Cryptorank and Gate Ventures, as of 18th May 2026
The total amount of disclosed funding raised in the previous week was $1113.7M. The top funding came from the Infra sector with $1000.2M. Most funded deals: Dunamu ($667M).
Weekly Venture Deal Summary, Source: Cryptorank and Gate Ventures, as of 18th May 2026
Total weekly fundraising surged to $1113.7M for the third week of May-2026, an increase of 3156% compared to the week prior.
About Gate Ventures
Gate Ventures, the venture capital arm of Gate.com, is focused on investments in decentralized infrastructure, middleware, and applications that will reshape the world in the Web 3.0 age. Working with industry leaders across the globe, Gate Ventures helps promising teams and startups that possess the ideas and capabilities needed to redefine social and financial interactions.
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Reference:
S&P Global Week Ahead Economic Preview, https://www.spglobal.com/market-intelligence/en/news-insights/research/2026/05/week-ahead-economic-preview-week-of-18-may-2026
DXY Index, TradingView, https://www.tradingview.com/chart/z1UD772v/?symbol=TVC%3ADXY
US 10 Year Bond Yield, TradingView, https://www.tradingview.com/chart/B9cgEklh/?symbol=TVC%3AUS10Y
Gold Price, TradingView, https://www.tradingview.com/chart/z1UD772v/?symbol=TVC%3AGOLD
BTC & ETH ETF Inflow, https://sosovalue.com/tc/assets/etf/us-btc-spot
BTC Greed and Fear Index, https://alternative.me/crypto/fear-and-greed-index/
Micro Strategy STRC Dashboard, https://bitcoinquant.co/company/MSTR
CME and ICE Push Crackdown on Hyperliquid Oil Trades, https://coinmarketcap.com/community/articles/6a083c9f576728540503ed15/
Coinbase’s Partnership with Hyperliquid to grow USDH adoption, https://coinmarketcap.com/community/articles/6a079ae83fdbfe52730e0a6d/
Tezos launches quantum-resistant private payments prototype on testnet, https://cointelegraph.com/news/tezos-quantum-resistant-private-payments-prototype-testnet
JPMorgan to launch tokenized money market fund for stablecoin issuers, https://cointelegraph.com/news/jpmorgan-files-second-tokenized-money-market-fund-ethereum
DTCC to use Chainlink for 24/7 collateral management network, https://cointelegraph.com/news/dtcc-to-use-chainlink-to-power-247-collateral-management-network
Deutsche Bank and Nasdaq back Elliptic in $120M funding round, https://www.bloomberg.com/news/articles/2026-05-12/deutsche-bank-nasdaq-back-crypto-firm-elliptic-in-120-million-round
Onramp raises $12.5M Series A to expand bitcoin custody infrastructure, https://www.axios.com/pro/fintech-deals/2026/05/14/onramp-bitcoin-custody-series-a
DTCC to use Chainlink for 24/7 collateral management network, https://www.wsj.com/business/hana-bank-to-buy-670-million-stake-in-crypto-exchange-operator-dunamu-08f99cb5
