WS #12033

The US-Iran conflict in the Strait of Hormuz continues to escalate sharply, with Brent crude surging above $86/barrel and WTI near $80. The US has reinstated a naval blockade and Trump has declared a 20% toll on cargo transiting the strait, while Iran retaliated by striking UAE oil tankers, killing one crew member. The US launched a third consecutive night of strikes on Iran, using naval drones for the first time. Oil prices saw their largest two-day gain in four months. This escalation is driving expectations of Fed rate hikes, with traders now pricing a 42.2% chance of a July rate hike, up from 26.7% a week ago. UK 10-year yields rose back above 5%. Separately, New York Governor Hochul signed the nation's first moratorium on hyperscale data centers over 50MW, impacting tech infrastructure. Samsung denied a Bloomberg report that it is exploring a US ADR listing. US spot Bitcoin ETFs saw $424.66 million in outflows, the largest single-day outflow in July. The ECB selected 36 payment service providers for its digital euro pilot, a non-market-moving development. The overall narrative is one of escalating geopolitical risk driving oil, inflation expectations, and rate hike bets, with negative implications for growth stocks and positive for energy.