WS #12444

The US-Iran conflict continues to escalate with the ninth consecutive night of US strikes on Iran, now confirmed by multiple sources including CNBC, BBC, and CENTCOM. Iran's Revolutionary Guards have threatened that the Strait of Hormuz will not be safe for oil and gas transit, and two oil tankers were reportedly blown up in the southern route of the strait. Brent crude has broken past $90/barrel, up ~2.77%, and WTI climbed ~2.4% to $84.49. A third US service member has been killed, bringing total US casualties to 17. This is a clear escalation of the prior narrative. Separately, China left its 1-year and 5-year Loan Prime Rates unchanged at 3.00% and 3.50%, respectively, which is neutral for markets. The World Cup final (Spain vs Argentina) and UK political transition (Burnham becoming PM) are noise for US markets. The dominant theme is ESCALATING US-Iran conflict with oil and defense stocks likely to benefit, while airlines and consumer stocks face headwinds. The Strait of Hormuz disruption is now directly impacting oil tankers, raising the risk premium further.