WS #11988

The dominant signal remains the escalating US-Iran conflict, with the US Navy confirming a full naval blockade of the entire Iranian coastline, including ports and oil terminals, effective 2000 GMT on July 14. The blockade applies to all vessel traffic regardless of flag, though neutral transit to non-Iranian destinations and humanitarian shipments are permitted subject to inspection. This has driven Brent crude up 7-8% and WTI up over 7%, with Polymarket contracts showing elevated probability of oil hitting $80+. Iran's foreign minister has responded defiantly, stating Iran has always been and will remain the guardian of the Strait, while a senior Houthi official threatened to close the Bab al-Mandab strait as well, warning oil prices could rise to $200 per barrel. 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. 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 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. Additionally, South Korea's margin call crisis deepened with 1.2M leveraged retail accounts facing liquidation, 320k-360k fully wiped out, which could have spillover effects on global risk appetite. A dark pool alert for $META shows a $105.46M institutional order at $662.25, suggesting institutional accumulation in a MAG7 name that may be contradicting the broader risk-off macro narrative.