Crypto Traders’ Replay: Oil, Wars, Rate Hikes and AI All Hit at Once

Oil surged above $100 as two wars, interest-rate uncertainty and doubts over artificial-intelligence spending converged on Wall Street, leaving veteran New York Stock Exchange floor trader Peter Tuchman unsure which force would move markets next. The S&P 500 fell 1.8% on Friday, while CME FedWatch assigned a 72% probability to a December rate hike that would increase borrowing costs for listed companies. Tuchman said hedge funds were another factor, with many up 10% to 15% this year and potentially closing positions in November to protect those gains.

Tuchman identified oil, interest rates, the US confrontation with Iran and the Russia-Ukraine war as simultaneous pressures, with the latter returning to heightened aggression. He also cited AI spending, which has divided the trade into groups ranging from hyperscalers, the largest cloud computing companies, to data-center builders. “We’ve seen every possible thing happens in this market whether it’s tariffs whether it’s oil whether it’s a war whether it’s two wars right whether it’s the yield whether it’s bonds whether it’s AI…The market has so many moving parts,” he said. When he recorded the video, the S&P 500 was less than 2% below its record high.

Oil climbed about $40 a barrel following the US and Israel attack on Iran and peaked near $120. Tuchman said that increase could slow an economy growing at 4.5%, adding: “the inflationary implications of hundred-plus dollar a barrel oil are massive.” Economists led by Apollo Global Management chief economist Torsten Slok estimated in March that a lasting move to $100 oil would trim US growth by about 0.1 percentage point while raising headline inflation by roughly 0.7 point. Apollo attributed the smaller growth impact to the US being a net oil exporter and to improvements in energy efficiency.

The inflation outlook complicates the Federal Reserve’s policy path. On October 28, the Federal Reserve held its benchmark rate at 3.75% to 4% and said inflation remained elevated, while Governor Lisa Cook and Cleveland Fed President Beth Hammack voted for a quarter-point hike. Tuchman also pointed to the transition from Jerome Powell to Fed Chair Kevin Warsh and said: “We switched Fed chairs… We’ve seen, uh, them go from an interest rate cutting cycle to an interest rate raising cycle. Caught everybody off guard.”

The Nasdaq Composite closed October down about 5.2%, its worst month since March 2025, as rising oil prices, weak technology earnings and December hike bets contributed to Friday’s sell-off. Tuchman also highlighted uncertainty surrounding AI spending, while the October jobs report was set to arrive Friday.