WS #11954

The US-Iran conflict has escalated sharply with fresh US strikes on Iranian air defenses, radar, and drone sites, and Iran retaliating against US allies in the Gulf. The Strait of Hormuz is effectively closed, with zero visible ship passages reported on Monday. Oil prices spiked 4-5% (Brent crude), and Treasury two-year yields rose to their highest since early 2025 as markets price in a Fed rate hike in September. India's June CPI inflation came in at 4.38% (above 4.30% forecast), driven by higher fuel and food costs from the war and weak monsoon. This adds to stagflation risks for India. Separately, Apple has filed a lawsuit against OpenAI for alleged trade secret theft, targeting two former employees now at OpenAI. This could disrupt OpenAI's hardware plans and IPO timeline. TSMC reported record Q2 revenue, up 36% YoY, beating estimates on AI demand, reinforcing the AI infrastructure bull case. The narrative is ESCALATING on the military front, with oil and inflation risks intensifying, while AI infrastructure demand remains a bullish counterweight.