WS #11701

The US-Iran conflict continues to escalate, with the White House preparing for a potential extended military conflict lasting days to weeks, per Axios. The US launched a second day of airstrikes, hitting approximately 90 Iranian military targets, while Iran retaliated by striking US bases in Kuwait and Bahrain. Strait of Hormuz traffic has ground to a near halt, with Goldman Sachs warning the flare-up may delay recovery in oil supplies. Iran's chief negotiator Ghalibaf stated the Strait will only reopen under 'Iranian arrangements.' Oil prices surged, with Brent crude near $79/barrel. This escalation reverses any de-escalation narrative and introduces significant supply disruption risk. Separately, Apple is testing DRAM chips from US-blacklisted Chinese manufacturer CXMT to reduce costs amid a 60% surge in memory prices driven by AI demand, potentially impacting AAPL's supply chain and margins. China's June CPI rose 1% YoY (below expectations) while PPI rose 4.1% YoY, indicating persistent deflationary pressures despite higher input costs. The Fed minutes showed some officials saw grounds for rate hikes due to broadening price pressures, but the outlook remains data-dependent on Middle East developments.