WS #12429

The US-Iran conflict is escalating sharply, with multiple US service member deaths reported in Iraq and Jordan, and the Pentagon reportedly planning for a wider war. The interim ceasefire has collapsed, and both sides are intensifying strikes, including on energy infrastructure and shipping in the Strait of Hormuz. This is driving a sustained geopolitical risk premium in oil markets, with potential for further disruption to crude pricing and tanker traffic. Separately, Apple has regained the title of the world's most valuable company, surpassing Nvidia, as investors reassess AI-related valuations. Nvidia's stock has declined 3.5%, while Apple's market cap reached ~$4.88 trillion. This shift reflects a rotation away from pure-play AI chipmakers toward companies with broader commercial AI integration. The Nvidia-Japan AI factory story and BofA's note on AI winners beyond mega-caps corroborate this theme. South Korea announced a roadmap to make the won freely convertible, a structural positive for capital inflows but limited near-term market impact. The Russia-Ukraine war saw the largest ballistic missile attack on Kyiv, with 41 missiles and 125 drones, killing six and wounding 16, highlighting Ukraine's Patriot system shortage. Trump offered to license Patriot missile production to Ukraine. The dominant narrative is US-Iran escalation, which is ESCALATING. The Apple/Nvidia market cap flip is a key counter-narrative to the AI selloff theme.