WS #12034

The US-Iran conflict in the Strait of Hormuz continues to escalate sharply, with multiple sources confirming a third consecutive night of US airstrikes on Iran and Iranian retaliation striking two UAE oil tankers, killing one crew member. Trump has reinstated a naval blockade and declared a 20% toll on cargo transiting the strait, while Iran asserts its control. Crude oil has rallied, with WTI topping $80 and Brent above $86, and the Oil Volatility Index (OVX) surged 15.6 points. European natural gas prices hit a three-month high. This escalation is driving Fed rate hike expectations, with traders pricing a 42.2% chance of a July hike. Separately, Ericsson tumbled 9% on a Q2 revenue miss and rising AI costs, while Samsung denied reports of a US ADR listing. 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. The situation is ESCALATING.