WS #11707

The US-Iran conflict continues to escalate sharply, with Trump declaring the ceasefire 'over' and US strikes hitting 170 targets over two nights. Iran retaliated against US bases in Bahrain, Kuwait, and Qatar. The Strait of Hormuz remains contested, with oil prices jumping 5% on Trump's remarks. Brent is at $77.7, up $5 over two days, but the market has not fully priced in a prolonged disruption. Separately, Ukraine continued drone attacks on Russian oil infrastructure, hitting depots in Tver and Stavropol, adding to the Russia diesel export ban and fuel crisis. This dual energy supply shock supports bullish oil and energy equities. On the tech side, Apple supplier Luxshare fell 5% on its Hong Kong debut after a $3.1B IPO, a negative signal for AAPL supply chain. Cerebras Systems announced a major European expansion with 200MW of AI compute capacity by end of 2027, positive for AI infrastructure plays. The dominant narrative is ESCALATING on the US-Iran front, with oil prices, inflation expectations, and risk assets all affected. The Russia diesel ban and Ukraine drone strikes on Russian oil infrastructure add a second energy supply shock. Counter-signals: Pertamina Pride tanker successfully transited Strait of Hormuz, suggesting some shipping lanes remain open, dampening the bearish oil supply thesis. Germany's May trade surplus widened, exports beat forecasts, providing a modest positive for European equities.