The conflict entered a more dangerous phase over the weekend. Iran and the US traded airstrikes, with Tehran targeting American facilities in multiple Gulf countries and declaring the Strait of Hormuz closed — a claim President Trump disputed on Sunday, insisting the waterway remains open to commercial traffic. The strikes, ordered Saturday after an Iranian attack on a commercial ship transiting the strait, mark the fourth round of US action on Iran in a single week.

Futures reacted immediately. Dow futures slipped 229 points (0.43%), S&P 500 futures lost 0.58%, and Nasdaq-100 futures dropped 1.37% early Monday, while crude prices climbed as tensions escalated. With roughly a fifth of the world's seaborne oil moving through Hormuz, energy remains the main transmission channel into everything else.

The positioning backdrop matters too. Standard Chartered reiterated gold as its preferred geopolitical hedge, noting US real yields near their highest since 2008 and a Fed it expects to stay on hold through 2026 — an environment where the war premium flows into commodities and the dollar rather than risk assets.

Bitcoin held near $63,800 on Monday — down just 0.3% over 24 hours and still up 2% on the week — while gold, oil, equities and government bonds all slumped on the latest strikes. Through an entire weekend of escalation, BTC barely moved.

The contrast with earlier this year is striking. When Iran first closed Hormuz in early March, Brent jumped past $100 for the first time in four years and bitcoin sold off sharply on each escalation. Now the asset seems to have stopped trading the war altogether. Bitcoin has held a tight range through weekend strikes, a Monday selloff in every war-sensitive asset, and a hawkish Fed repricing — taking its direction from dollar liquidity and the chip cycle instead. Case in point: SK Hynix plunged 12% in Seoul after its US-listed shares surged 13% on Friday's debut, dragging the Kospi down 7%, and even that reversal left crypto flat.

The resilience is more notable given the backdrop: digital assets just posted a third consecutive losing quarter — the longest streak since the 2022 bear market — with bitcoin ETFs recording their largest quarterly outflow since launch.

Washington's biggest crypto bill hits a critical stretch. Senate staff plan to release a merged CLARITY Act draft this week, combining work from the Banking and Agriculture committees, with negotiators reportedly adding more than 70 pages including stronger consumer protections. Leadership is targeting possible floor action during the week of July 20.

The political fight has sharpened accordingly. Senator Elizabeth Warren has branded the current draft a "ticket to sanctions evasion," warning it could weaken oversight of illicit finance. Coinbase chief policy officer Faryar Shirzad fired back in a July 11 post on X, arguing that unclear rules are what give bad actors room to operate, and that the bill would place crypto brokers, dealers and exchanges under Bank Secrecy Act duties — AML programs, customer checks, suspicious activity reports and sanctions compliance.

Passage is far from guaranteed. The bill has sat on the Senate calendar since June 1 with no floor vote scheduled, blocked by three interlocking disputes: an ethics standoff over officials' crypto holdings, the Section 604 developer-protection fight, and a battle over stablecoin yield. This week's draft will show whether those knots are actually loosening.

Bitcoin's biggest protocol dispute in years escalated over the weekend. Strategy founder Michael Saylor posted that "there are 110 things more dangerous to Bitcoin than spam," arguing the proposal converts a spam dispute into a consensus change that would invalidate currently valid, fee-paying transactions — with the precedent itself being the real danger. Blockstream's Adam Back made a similar case, saying the plan tries to police transactions other users choose to send, which conflicts with Bitcoin's permissionless design.

Some context for readers: BIP-110 was introduced in December 2025 by a pseudonymous developer known as Dathon Ohm, with support from Luke Dashjr, and would apply extra consensus rules for about one year — keeping OP_RETURN within an 83-byte limit and restricting several data payloads to 256 bytes to squeeze out Ordinals-style data.

The numbers suggest it's going nowhere. Miner signaling remains near zero, far below the proposal's 55% activation threshold, and daily Ordinals inscriptions have already collapsed to under 10,000 from a peak above 400,000 in August 2023. The real risk is a small minority chain — not a network-wide change.

Q2 earnings season kicks off with Citigroup, Goldman Sachs, Wells Fargo, JPMorgan and Bank of America reporting Tuesday, followed by Morgan Stanley, Johnson & Johnson and BlackRock on Wednesday, and Netflix, UnitedHealth and GE Aerospace on Thursday. The season is expected to deliver a second straight quarter of earnings growth above 20%.

The macro test comes the same day banks report. Barclays sees June headline CPI dropping to 3.8% from 4.2% on lower gas prices, but expects core CPI to rise another 0.26% month over month — and a soft headline alone probably won't be enough to let the Fed hold rates steady. With airstrikes pushing oil higher, the inflation math only gets harder from here.

The bigger picture: nearly all of the S&P 500's year-over-year returns are tied to earnings growth rather than multiple expansion — an earnings-led market, not a PE-led one. That's the thesis this week stress-tests, against the ugliest macro backdrop of the summer.

DISCLAIMER: None of this is financial advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. Please be careful and do your own research.