The U.S. Senate rejected the resolution to restrict Trump’s war-making powers against Iran by 49 votes to 47, meaning the White House’s military options in the Middle East were not truly off the table, and the market’s pricing of a geopolitical risk premium quickly heated up.

On the day the resolution was voted down, the international benchmark Brent crude broke above $100 per barrel, while WTI crude oil futures surged in tandem. The U.S. oil index fund (USO), which tracks oil prices, became a direct outlet for funds seeking to hedge energy supply shocks. The three major U.S. stock indexes all closed lower: the Nasdaq fell 2.15%, the S&P 500 dropped 1.21%, and the S&P 500 ETF (SPY), which tracks the broad market, retreated under pressure. The “Magnificent Seven” saw a combined one-day market value evaporation of $797B.

Under a flight-to-safety rationale, some funds rotated into crypto assets seeking a hedge, and iShares Bitcoin Trust (IBIT) was picked up as Bitcoin’s price strengthened. In the short term, the failed congressional effort to limit war powers leaves Trump with room to carry out limited military actions with flexibility; navigation through the Strait of Hormuz, shipping insurance, and global inflation expectations will continue to be disrupted. In the medium term, as the election season approaches, the war-powers fight layered atop high oil prices will only amplify volatility in risk assets. Investors should be wary that the transmission chain of “political calls—military escalation—energy jump” may repeatedly trigger.