The Strait Closed Again. The Ceasefire Expires Tuesday.

Friday, Iran said the Strait was “completely open.” Oil fell more than 10%. Stocks hit records. Bitcoin broke $76,000.

By Saturday, the IRGC fired on two commercial ships. The U.S. seized an Iranian-flagged cargo vessel. Iran declared the Strait closed again.

The relief trade lasted less than 24 hours.

Markets are resetting.

S&P 500 futures fell 0.5%. Nasdaq futures dropped 0.5%. Dow futures lost 0.6%. Brent jumped more than 5% toward $95. WTI climbed near $89. The VIX rose over 12%.

The ceasefire expires Tuesday night.

Vice President Vance arrives in Islamabad Monday for talks Tuesday alongside Witkoff and Kushner. Iran says there is “no plan” for talks. That has reversed before.

Positioning flipped fast.

Eurasia Group had a two-thirds probability on the ceasefire holding. That was before the attacks. Polymarket odds for the war ending before May dropped from 84% to 56%.

The Signal

The system is back to pre-Friday conditions. The ceasefire clock is running. Tuesday decides the next leg.

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The sequence matters. Friday, oil drops 10% on reopening. Saturday, ships are attacked. Monday, oil rebounds 5% to 6%. A full round trip in 72 hours.

ING estimates 13 million barrels per day remain disrupted. Kpler puts cumulative losses above 500 million barrels since February 28, the largest supply disruption in modern history.

Even a deal does not fix this quickly. Normalization takes months.

Policy tools are thinning.

The U.S. renewed its Russian oil waiver through May 16, reversing a decision from two days earlier after G20 pressure. Officials say gasoline may not fall below $3 until next year. Stabilization tools are “nearly exhausted.”

Capital is already moving.

Exxon Mobil (XOM) is planning up to $24 billion in Nigerian deepwater. Chevron (CVX) expanded in Venezuela and Egypt. BP (BP) added Namibia exposure. TotalEnergies (TTE) signed deals in Turkey.

Supply is reorganizing faster than diplomacy.

Energy Signal

Oil is pricing the Strait as closed. Diplomacy is pricing talks. One resolves by Wednesday.

Warsh testifies Tuesday. The ceasefire expires the same night.

The 10-year yield held near 4.27%, still 30 basis points above pre-war levels. The bond market has not priced Fed transition risk.

Warsh’s framework is under pressure.

His case for rate cuts relied on AI-driven productivity suppressing inflation. Current officials disagree. Yellen said the Fed is unlikely to accept that view. Musalem called easing on that assumption “risky.”

A second risk is building.

Apollo (APO) says hedge funds hold 8% of the $31 trillion Treasury market, often through leveraged basis trades backed by $6 trillion in repo. An unwind could send “shockwaves.”

Anthropic’s Mythos is under review across Australia and South Korea. ASIC, APRA, and Korea’s FSC have all responded within a week.

Macro Signal

Policy and geopolitics collide Tuesday. Markets are not priced for it.

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The AI trade is intact. The question is demand quality.

Morgan Stanley (MS) sees $32B–$60B of incremental CPU demand by 2030 on top of a $100B base.

The beneficiaries remain broad: Nvidia (NVDA), Advanced Micro Devices (AMD), Intel (INTC), Arm Holdings (ARM) in processors; Micron (MU), Samsung (005930.KS), SK Hynix in memory; Taiwan Semiconductor (TSM) and ASML (ASML) in manufacturing.

Intel (INTC) reports this week.

The constraint is not demand. It is efficiency.

Engineers at Google (GOOGL), Amazon (AMZN), Microsoft (MSFT), and Meta (META) describe deployments as chaotic. Systems are routing too many tasks through large models. Firms are burning tokens without clear output.

Pricing is simple. $5 per million inputs. $25 per million outputs.

Companies are optimizing for usage, not results.

That will show up in margins.

Salesforce (CRM) pushed back. Benioff said enterprise systems cannot be replaced with “vibe coding.” Agentforce has 23,000 customers out of 150,000. Growth is about 10%.

Private markets are tightening.

80% of buyouts rely on private credit. Lending is tightening. Global buyout activity fell 14% year over year in Q1.

The feedback loop is active.

Capital Signal

AI demand is strong. Its quality is being questioned. Credit stress is now feeding into deal flow.

ETF flows are strong.

$996 million in inflows last week, the highest since January. BlackRock (BLK) accounted for $906 million. Morgan Stanley (MS) added $71 million. Ethereum ETFs saw $275 million.

Three-week inflows exceed $1.8 billion.

Options are the driver.

A $7.9 billion expiry hits Friday. Call positioning is concentrated at $75,000. Gamma is negative. That amplifies moves both ways.

Above $75,000, short covering accelerates. Below, $71,000 becomes the pull.

The range is defined: $62,000 to $75,000.

DeFi is under stress.

The $292 million KelpDAO exploit triggered cascading withdrawals. Aave utilization hit 100%. Users exited at 10% to 25% losses. TVL fell from $26.4 billion to near $20 billion.

LayerZero tied the attack to Lazarus Group. Combined losses across protocols reached $575 million in 18 days.

Institutional buildout continues.

Coinbase (COIN) expanded USDC lending to the UK. Total originations reached $2.17 billion.

The Verdict

Bitcoin is stable with strong flows and a major options catalyst. DeFi is absorbing structural stress. Institutional infrastructure is expanding.

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The weekend produced three signals.

Iran fired on ships within 24 hours of declaring the Strait open. That suggests internal division.

The U.S. seized an Iranian vessel. That shifts the conflict posture.

Talks may still happen. Vance arrives. The ceasefire holds until Tuesday night.

The earnings week is heavy.

Tesla (TSLA), Boeing (BA), Intel (INTC), UnitedHealth (UNH), Lockheed Martin (LMT), American Express (AXP), Blackstone (BX), Amazon (AMZN). Nearly 20% of the S&P reports in five days.

Last week priced resolution.

This week prices uncertainty.

The Strait decides which one.