WS #11179

The dominant narrative from the previous window (tech rotation, USMCA non-renewal, Iran talks, Russia-Ukraine energy strikes) remains active, but this window introduces several new data points. The USMCA non-renewal is confirmed by a senior administration official, with the US stating it did not agree to renew in its current form and will pursue separate protocols with Canada and Mexico. This is a de-escalation from a hard break, as the deal remains in force pending negotiations. On the macro front, US data prints were mixed: ISM Manufacturing (53.3 vs 54.0 est), ADP Employment (98K vs 120K est), and Construction Spending (0.1% vs 0.2% est) all missed, while S&P Global Manufacturing PMI was revised lower to 53.9 from 55.7. These soft prints reinforce a slowing growth narrative, which could support rate cut expectations. The AI infrastructure trade saw a major rotation day, with semis down sharply (MU -6.7%, ARM -4.6%, INTC -4.0%) while beaten-down software and defensive names rallied. However, a key counter-signal emerged: Meta is building a new cloud business to monetize excess AI compute, which is bullish for the AI infrastructure trade and validates demand. This contradicts the bearish rotation narrative. Additionally, Strait of Hormuz oil flows have surged to 10 million barrels per day with US military support, weakening Iran's oil leverage and acting as a counter to the oil supply crisis narrative. Putin admitted a fuel shortage after refinery strikes, nudging oil prices higher. Other notable developments: Bending Spoons IPO jumped 6.9%, FactSet signaled high end of FY2026 ranges while cutting 10% of tech workforce, and Lockheed Martin was upgraded to Buy at Citi. The Empire State Building climb is a non-market event. Overall, the window is characterized by conflicting signals: soft macro data vs. AI infrastructure resilience, and USMCA non-renewal vs. ongoing negotiations.