WS #11596

The Strait of Hormuz crisis is escalating sharply, with a tanker attack reported by UKMTO and AP confirming at least two vessels struck. Oil prices surged: WTI crude up 2% to $70.25, Brent over 2% to $73.52, with futures extending gains. This is corroborated by multiple sources (MaritimeAttack, AP, Bloomberg, oilprice.com). The attack marks a significant escalation from the previous stable situation. Additionally, Ukrainian drones struck Russia's largest oil refinery in Omsk, Siberia, the deepest strike yet against Russian energy infrastructure, adding supply-side risk. On the macro front, Fed's Williams expects falling energy prices to drive inflation down, a counter-signal to the oil spike narrative. The AI trade is losing steam: Samsung missed revenue estimates, shares fell 7%, and SK Hynix is down 25% from its ATH ahead of its US listing. Chip stocks (MU, SNDK, AMAT, LRCX, KLAC) are under pressure. Apollo's Slok warned S&P 493's stalled margins are a big-tech risk. Trump signaled openness to selling F-35s to Turkey and lifting sanctions, which could impact defense stocks. Germany plans a $1.7B strategic natural gas reserve, adding to energy security themes. The overall narrative is ESCALATING on oil/geopolitical risk, with a counter-signal from Fed's Williams on energy prices. The AI trade is DE-ESCALATING as infrastructure boom faces reality check.