WS #12327

The US-Iran conflict continues to escalate, with Iran's Revolutionary Guards claiming two oil tankers exploded after hitting mines in the Strait of Hormuz and that four 'violating' tankers were stopped in a combined missile and drone operation. Saudi civil defence issued early warnings in Yanbu and Al-Kharj, later saying danger had passed. Iran claims to have struck a US ship in the Indian Ocean with cruise missiles, and launched ballistic missiles at Israel, US, and Jordan. The US launched its seventh straight night of strikes on Iran. Strait of Hormuz shipping traffic has slowed to a trickle, and US gas prices are rising sharply. This represents an escalation from the previous narrative. On the counter-signal front, Iraq signed deals with Western oil firms to revive the Syria pipeline, which could provide an alternative export route bypassing the Strait of Hormuz, potentially offsetting some of the oil supply disruption fears. Separately, the AI sector faces renewed pressure from Chinese startup Moonshot AI's new model, which is catching up to US frontier models, reviving competition fears similar to the DeepSeek episode. This weighed on semiconductor stocks (AMAT -5.6%, SOXX -1.6%) and the broader Nasdaq. Netflix fell 7.3% after a disappointing Q3 revenue forecast. Trump threatened Canada with additional tariffs over wildfire smoke, adding a new geopolitical friction. The White House is dictating access to frontier AI models, shifting power from tech giants, which could impact AI-related stocks. Apple's market cap reached $4.9 trillion, overtaking Nvidia, as AI investment rotates from infrastructure to monetization. META is reportedly negotiating to rent Anthropic its own data centers, a deal that could hit $10B over two years, signaling strong demand for AI compute.