Iran Threatened Hormuz. Alphabet Raised $80 Billion. Bitcoin Broke $70,000.

Tuesday opens with the AI rally on hold and bitcoin sliding.

All three major indexes closed at fresh records Monday. The S&P 500 gained 0.26%. The Nasdaq added 0.42%. It was the eighth straight daily gain for the S&P — something not seen in a year. Futures are slightly lower this morning.

Then Alphabet (GOOGL) said it would raise $80 billion in equity to fund AI. The stock fell more than 2.5% premarket. The market did not doubt the thesis. It repriced the cost. That is an important distinction. Conviction and valuation can move in opposite directions.

Bitcoin fell below $70,000 overnight. The AI rally paused. Bitcoin did not pause with it. It kept falling.

The Signal

Alphabet showed what the AI arms race costs. Bitcoin showed what gets left behind when that money moves.

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Iran's state media said Monday that Tehran would halt back-channel talks with Washington and move to block the Strait of Hormuz. Around 20% of global oil flows through that corridor. Trump told CNBC he could not care less if talks ended. Then he posted that talks were moving at a rapid pace. Brent fell toward $93 on the mixed signals.

The Oman story adds a layer most are not tracking. Washington has warned it may sanction or strike Oman after an assessment found Muscat was planning to help Iran toll Hormuz ships. Oman has denied it. But if Oman loses neutral status, the last reliable back-channel between Washington and Tehran closes. That removes both a diplomatic path and a pressure valve.

Energy Signal

The Iran framework added new failure points Monday. The path from ceasefire to open Strait just got longer.

Eurozone inflation rose to 3.2% in May, up from 3.0% in April. That cements bets on an ECB rate hike next week. The pressure is global now, not just American. Rate cuts are off the table on both sides of the Atlantic.

Warsh is less than two weeks into his Fed chairmanship. A Brookings paper published Tuesday by two top economists argued against his goal of shrinking the Fed's balance sheet. Their warning: faster runoff would trigger rate swings with no real upside. The paper draws on lessons from the Powell era.

Payrolls arrive Friday. The consensus is near 100,000 jobs. A strong print gives Warsh less room to ease. A weak one gives him a different problem.

Macro Signal

Central banks globally are leaning toward hikes. Warsh faces pushback before he starts. Friday's jobs data sets the tone.

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Alphabet (GOOGL) has raised over $85 billion in debt over the past year. Now it is going to equity holders for $80 billion more. Berkshire Hathaway (BRK.B) is taking $10 billion at a private placement discount. That is not a passive allocation. It is Greg Abel's first major bet on AI infrastructure since taking over as CEO.

This is not one company's choice. It is a sector pattern. Microsoft (MSFT), Meta, and Amazon (AMZN) are set to spend more than $700 billion on capex in 2026. Wall Street sees total AI capex above $1 trillion by 2027. The sums are no longer earnings-funded. They require new equity, new debt, and new dilution.

Marvell (MRVL) surged 24% Monday after Jensen Huang called it the next trillion-dollar company. The AI trade is spreading from chips and cloud to custom silicon, networking, and power. That is the same broadening signal HPE delivered Monday, the AI buildout is no longer a Nvidia story, it is a full infrastructure stack story.

Capital Signal

AI capex moved from earnings calls to balance sheets. The scale is historic. The dilution is real.

Bitcoin is below $70,000. The ETF outflow streak is now eleven sessions and $3.45 billion.

Monday alone saw $484 million leave U.S. spot bitcoin ETFs. BlackRock's IBIT lost $440 million of that total. ETF net assets fell from $104 billion on May 15 to $94 billion by end of Monday. May logged $2.43 billion in net outflows — the worst month since November 2025.

This is not panic selling. It is a shift in allocation. Institutions are rotating out of crypto and into AI stocks. The rotation is deliberate, not reactive.

Strategy (MSTR) made it worse. The company sold 32 bitcoin for $2.5 million to fund preferred stock payouts. The first sale since December 2022. The size is tiny. The signal is not. Strategy built its brand on buying and holding bitcoin forever. One sale broke that story. Shares fell 5.3%.

A Polymarket contract on whether Strategy would sell by May 31 is now in dispute, with over $50 million in volume heading to a token vote. Even the prediction market is unsettled.

The infrastructure keeps building. CME Group launched 24/7 crypto futures and options last Friday, logging over $50 million in notional volume its first weekend. The regulated market is expanding at the exact moment the price is falling.

The Verdict

Bitcoin is below $70,000. ETF outflows broke the record. Strategy broke its hold story. The infrastructure is growing. The bid is shrinking faster.

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Tuesday opens with the clearest split of the year.

Alphabet (GOOGL) is raising $80 billion for AI. SpaceX lists in ten days. Anthropic filed for its IPO. The S&P is at a record.

Bitcoin is below $70,000 and falling.

The ETF streak, the Strategy sale, and the Alphabet raise all point one way. Capital is choosing AI over crypto. It is doing so with conviction.

The AI trade and the crypto trade are not drifting apart by accident. They are competing for the same money. Right now, AI is winning.

The question for this week: whether Friday's payrolls give the Fed cover to hold — or give AI capex one more quarter of cheap funding.