WS #11703

The US-Iran conflict has escalated dramatically, with President Trump declaring the ceasefire 'over' and ordering fresh strikes for a second night, targeting southern Iranian ports including Bushehr, Chabahar, and Konarak. Iran has responded by attacking US bases in Bahrain and Kuwait, and the Strait of Hormuz remains severely disrupted with maritime risk raised to 'serious'. Oil prices surged, with Brent reaching $78.78/barrel, up ~6% on the day, and WTI at $74.23. The IMF lowered its 2026 global growth forecast to 3.0% (from 3.1% in April), citing war risks, and raised its 2026 inflation forecast to 4.7%. The IMF assumes Hormuz reopening starts mid-July with full normalization by March 2027, and an average oil price of $89/barrel. China's June CPI rose 1.0% YoY (slightly below 1.1% estimate) and PPI rose 4.1% YoY (in line), showing persistent deflationary pressures. Apple and Broadcom announced a $30B multiyear chip deal for U.S.-made components, with Broadcom investing $1.5B in Fort Collins facilities. Samsung reported record Q2 operating profit of 89.4 trillion won ($58.6B), surpassing Nvidia's previous record, driven by AI memory chip demand. The Fed minutes from the June meeting showed increased concern about inflation, with a commitment to price stability and removal of language hinting at future easing. The US Dollar Index remained near 101.00, pressured by mixed Fed signals but supported by safe-haven demand from Iran tensions. Asian markets were mixed: Nikkei rose 2% on tech strength, while Dow Jones fell 580 points (-1.1%) on geopolitical fears. The narrative is clearly ESCALATING on the US-Iran front, with oil prices, inflation expectations, and rate hike probabilities all affected. The Apple-Broadcom deal and Samsung's record profit are positive signals for the semiconductor sector, partially offsetting macro headwinds.