WS #11999

The dominant signal in this window is a major escalation in US-Iran conflict. President Trump announced on the Hugh Hewitt Show that the US will strike Iran 'hard tonight and tomorrow,' and has notified Congress of renewed military operations. Trump also declared the US will reinstate a naval blockade of Iranian ports and impose a 20% toll on all cargo transiting the Strait of Hormuz, claiming the US will be 'Guardian of the Strait.' This is corroborated by multiple sources (BBC, Al Jazeera, Bloomberg, Reuters, CNN, and social media). Brent crude oil has surged to $83/barrel, a +10% daily gain. The US Strategic Petroleum Reserve dropped to 316.5 million barrels, the lowest since 1983. Houthis have claimed responsibility for drone and missile strikes on Saudi Arabia's Abha International Airport, and Yemeni officials have threatened to destroy Saudi oil fields. China has drawn a red line, warning Gulf nations not to allow US use of their territory to attack Iran. Gold dropped below $4,000 as Fed rate hike bets surge. The market is pricing a Fed hike by September due to energy-price-induced inflationary shock. Tech stocks are mixed with NVDA -3.47%, while energy stocks like XOM are up +4.09%. The CPI report tomorrow is expected to show headline improvement due to falling oil in June, but core services inflation remains sticky. The dominant theme is ESCALATING. No counter-signals detected.