WS #12140

The US-Iran conflict is ESCALATING sharply. Iran's top negotiator Qalibaf made multiple hardline statements via Reuters, asserting that Iran's armed forces have complete freedom of action, that national security lies in maintaining 'Iranian arrangements' on the Strait of Hormuz, and that negotiation and war are both part of the strategy. Iran has also announced withdrawal from the MOU negotiations, and there are reports of ballistic missiles launched at US bases in Kuwait and US airstrikes causing casualties in Iran. The Strait of Hormuz remains a flashpoint, with oil prices showing limited reaction despite the escalation, suggesting the market is pricing in a prolonged but contained conflict. However, a counter-signal emerged: Donald Trump claimed oil is declining and vessels are emerging from the Strait of Hormuz, which if true would be a major de-escalation, but this is unconfirmed and contradicts other sources. Separately, the tech sector remains under severe pressure from IBM's historic 25% crash, dragging down Dell (-13%) and other hardware/IT services names. The semiconductor selloff is broad, with AMD, INTC, NVDA, and MU all declining. However, ASML reported strong earnings (revenue beat, raised guidance), providing a bullish counterpoint for AI-related chip equipment. Anthropic is moving closer to a mega-IPO (CNBC, corroborated), which is a bullish signal for AI. Apple Intelligence received regulatory approval in China via Alibaba's Qwen models, a bullish catalyst for AAPL. SpaceX stock fell below its IPO price for the first time, a bearish signal for the space/IPO market. The Fed's Cook stated policy is mildly restrictive and the Fed can take time to observe data, but she is prepared to act if disinflation stalls. The Bank of Canada held rates at 2.25%. China's GDP grew 4.7% in H1 2026, slightly below expectations, adding to global growth concerns. Overall, the market is caught between geopolitical escalation and tech sector weakness, with pockets of strength in AI and select earnings.