WS #12166

The US-Iran conflict continues to escalate with new US strikes on Iranian-occupied Greater Tunb island and a tanker disabled near Kharg Island, while Kuwait air defenses responded to hostile drone threats. However, oil markets are showing signs of fatigue—Brent crude 'barely flinched' despite another wave of strikes, and oilprice.com noted Brent slipped to $84.95. A potential de-escalation signal emerged: Trump announced Iran allowed an American citizen to leave the country. Separately, the oil market narrative is being complicated by a potential counter-signal: Trump dropped the proposed 20% Hormuz transit fee after Gulf intervention (carried forward from previous window). On the macro front, US PPI came in cooler than expected (-0.3% MoM vs flat), reinforcing the disinflation narrative and supporting a modest market rally. The S&P 500 rose 0.4%, nearing its all-time high. Fed Chair Warsh pushed back on AI stoking inflation. In corporate news, Apple hit a new record high, while SpaceX shares fell below IPO price for the first time, down 41% from peak. PayPal surged 17% on acquisition rumors by Stripe and Advent. Dell fell 9.8% on AI overcapacity fears as Meta plans surplus capacity leasing. NVIDIA-related news: Japan enterprises building AI with Nemotron models, but DRAM spot prices surged 10x YoY, posing a binding constraint for NVDA through 2027. The narrative arc for US-Iran is STABLE (escalation continues but oil market is desensitizing), while the macro narrative is BULLISH (cooling inflation supports risk assets).