WS #12220

The US-Iran military escalation continues to dominate, with CENTCOM confirming a fifth consecutive night of strikes on Iran, including on Bandar Abbas. Iran retaliated by targeting US bases and threatening the Strait of Hormuz. This has kept oil prices elevated and weighed on equities, particularly tech. The AI trade is under pressure: TSMC reported a beat-and-raise but the stock fell ~5%, and semis (SMH, SOXX) are down 15-20% from highs. Google's Gemini 3.5 Pro launch is delayed, a negative for GOOGL. Fed's Logan and Schmid both expressed inflation concerns, with Logan favoring 'modestly higher' rates, countering benign CPI data. The grocery slowdown deepened with units sold down 1.8% YoY in June, pressured by a 20% gas price spike. On the positive side, Abbott raised its 2026 EPS outlook to $5.45-$5.60, and State Street beat earnings with AUM hitting $6.3T. Crypto.com secured a $400M investment from Citadel Securities at a $20B valuation, signaling institutional crypto adoption. Oracle hit a new 52-week low on AI spending concerns. The dominant narrative is ESCALATING US-Iran conflict, with second-order effects on energy, airlines, and consumer staples. The AI capex debate remains unresolved, with hyperscaler earnings (GOOGL, MSFT, META, AMZN) due in the next two weeks as the key catalyst.