WS #11719

The dominant narrative in this window is a sharp escalation in US-Iran military conflict, with the US striking ~90 targets in Iran and Iranian forces responding. The Strait of Hormuz remains a critical flashpoint, with Iran claiming 50% of pre-war traffic capacity restored but Goldman Sachs warning that further disruptions could delay oil supply recovery. Oil prices are reacting: Brent crude opened at $78.93, up from recent lows, and WTI crude is around $72.99. This geopolitical escalation is driving a rotation within equities: chip stocks (semiconductor index up ~6%) are rallying on AI demand and memory rotation, while NVDA is down 0.75% as investors shift to memory plays like Micron. The Nasdaq is up ~1% while the Dow is flat, reflecting tech outperformance despite geopolitical risk. Meanwhile, Meta announced it will begin manufacturing its in-house Iris AI chip in September, targeting 14 gigawatts of computing capacity by 2027, a bullish signal for META and AI infrastructure. On the macro front, US existing home sales for June missed estimates (4.09M vs 4.19M expected, -2.4% MoM), indicating housing market weakness. Initial jobless claims edged lower to 215,000. Fed's Williams made comments on neutral rate uncertainty and Treasury management, but these are not market-moving. In corporate news, AstraZeneca lost £20bn in market cap after a drug trial failure, and PepsiCo CEO noted GLP-1 consumers stay within their categories but buy smaller portions. The overall narrative arc is ESCALATING on US-Iran tensions, with oil and defense stocks likely to benefit while consumer and airline stocks face headwinds.