The US Dollar Index (DXY) has been strengthening since late January, a move that may reflect growing risk-off sentiment across global markets.

At the same time, US equities are showing signs of stagnation, with momentum fading after recent highs.

A stronger dollar typically coincides with:

• tightening global liquidity
• capital flowing into safe-haven assets
• pressure on commodities and emerging markets
• weaker performance in high-beta assets, including crypto

Markets are also increasingly pricing in the possibility of a military strike on Iran, with many traders expecting a broader sell-off in risk assets if geopolitical tensions escalate.

If escalation materializes:

• DXY could extend gains
• equities may face accelerated downside
• oil could spike further
• volatility across asset classes would likely surge

For traders, the combination of rising dollar strength and geopolitical risk creates a fragile macro backdrop, where positioning discipline and liquidity awareness become critical.