WS #11987

The dominant signal in this window is the dramatic escalation of the US-Iran conflict, with President Trump announcing a full naval blockade of the Iranian coastline and a 20% transit fee on all cargo passing through the Strait of Hormuz, effective 2000 GMT on July 14. This has driven Brent crude oil prices up 7-8% and WTI up over 7%, with Polymarket contracts showing elevated probability of oil hitting $80+. The US Navy-led Joint Maritime Information Center has clarified the blockade applies to all vessel traffic regardless of flag, though neutral transit to non-Iranian destinations and humanitarian shipments will be permitted subject to inspection. Iran's foreign minister has responded defiantly, stating Iran has always been and will remain the guardian of the Strait. Concurrently, Houthi forces have launched ballistic missiles and drones at Abha International Airport and King Khalid Airbase in Saudi Arabia, breaking a four-year truce, while France's Macron announced multinational military exercises with Ukraine and licensing of SCALP missile production, adding to geopolitical tensions. On the domestic front, a federal judge has voided Trump's $10 billion IRS settlement, referring his lawyers for sanctions, which could have political implications but limited direct market impact. The oil supply shock is the primary market-moving event, with second-order effects likely to boost energy stocks (XOM, CVX, XLE) and refiners (MPC, PSX, VLO), while pressuring airlines (DAL, UAL, AAL) and consumer discretionary names. The narrative is ESCALATING rapidly, with the blockade set to begin tomorrow.