WS #11677

The dominant signal in this window is a major escalation in US-Iran military conflict, directly contradicting the previous ceasefire narrative. Multiple sources (Axios, Reuters, CENTCOM, and various social media accounts) confirm that the US has launched a second consecutive day of strikes against Iranian targets in the Strait of Hormuz, described as intended to 'further degrade Iran's ability to threaten freedom of navigation.' This represents a clear ESCALATION of the geopolitical crisis, reversing the de-escalation implied by the earlier MoU. The strikes are occurring as NATO convenes in Turkey, with Trump simultaneously threatening to pull US troops from Europe over Greenland. Oil prices are likely to spike sharply on this news, reversing recent declines. Separately, several earnings reports provide company-specific signals: Levi Strauss beat expectations and raised guidance, but shares fell 5% after-hours; Victoria's Secret surged 47% on a massive earnings beat; AZZ beat estimates and raised FY27 guidance; Costco reported strong June sales and a dividend increase; and MDA Space announced a $712M bought deal to fund a $920M acquisition of CLS. Amazon plans a $25B+ bond sale, while Oracle fell 11% on plans for an additional $20B capital raise. The AI trade showed signs of fatigue with Samsung missing revenue estimates despite record profit, dragging down semiconductor stocks. The ECB hiked rates by 25bp to 2.25%, the first hike since 2023, citing Iran war inflation pressures. UK CPI held at 2.8% in May, below expectations. US CPI rose 4.2% annually in May, the highest in three years, while PPI surged 1.1% MoM. The Bank of England held rates at 3.75% with a 7-2 vote. The US issued sweeping Iran oil sanctions waivers, allowing dollar-denominated trade for 60 days, which could unlock ~67 million barrels of stranded Iranian crude. However, the new US strikes directly contradict this diplomatic track, creating extreme uncertainty in oil markets.