Oil prices surge, interest rate cut expectations cool down! Circle benefits as the target price breaks $100

Benefiting from soaring oil prices and a sudden cooling of the Federal Reserve’s (Fed) rate cut expectations, the US stablecoin giant Circle’s stock price has recently surged strongly, rising nearly 8% on Tuesday to $103.71. This not only hits a nearly four-month high but also surpasses the $100 target set by Mizuho Securities. Analysts point out that changes in the overall economic environment are becoming a powerful catalyst for Circle’s valuation.

Mizuho analysts Dan Dolev and Alexander Jenkins, in their research report, raised Circle’s target price from $90 to $100. Although they maintain a “Neutral” rating, they are more optimistic about the company’s profit outlook.

They noted that recent tensions in Middle Eastern geopolitics have driven crude oil prices higher, up 6% over five trading days, with a year-to-date increase of 24%. If oil prices remain high, it could intensify inflationary pressures, potentially reducing the likelihood of the Fed starting rate cuts in 2026.

For Circle, the direction of interest rates is undoubtedly the “lifeline” affecting profits. If the Fed maintains a “higher for longer” interest rate path, the interest earned from USDC reserve assets—Circle’s core revenue source—would be more substantial. Mizuho analysts estimate that the fading expectation of rate cuts would only boost Circle’s revenue in 2026 and 2027 by about 1%, but the positive impact on valuation could be greater.

According to CME’s FedWatch tool, the market’s probability of no rate cuts throughout 2026 nearly doubled in just one day. The analysts stated in the report that this “right-tail risk”—the increased likelihood of extreme bullish or profit events—could lead to higher valuation premiums for Circle.

Despite the positive macroeconomic signals, Mizuho still warns that the stablecoin market faces long-term competition and commodification pressures. As regulatory clarity improves, more issuers of dollar-pegged stablecoins may enter the market, potentially squeezing profit margins.