WS #2328

The geopolitical situation in the Middle East has escalated significantly, with Iran now directly targeting a joint US-UK military base at Diego Garcia with missile strikes, marking a dangerous expansion of the conflict beyond the Strait of Hormuz region previously highlighted. This development corroborates earlier reports of the Iran war entering its fourth week with no clear end in sight, reinforcing persistent regional instability and bearish pressures on global markets due to heightened security risks. Concurrently, Iran's unveiling of the Khorramshahr-4 supermissile with a 4,000 km range introduces a new threat dimension, potentially extending the conflict's reach to European capitals like Rome and Berlin, which could amplify energy price volatility and supply chain disruptions, particularly for semiconductors reliant on helium from the region. In contrast, the technology sector shows resilience with bullish signals, as Yushu Technology's IPO filing on China's STAR Market reveals explosive growth in humanoid robotics, with revenue surging over 330% to 17 billion yuan in 2025 and profitability improving sharply. This aligns with earlier AI-driven demand strength seen in Samsung's memory chip sales, though no new chip updates are present here. Meanwhile, domestic policy responses like Spain's fiscal aid package to counter fuel price spikes may dampen some inflationary pressures, but the escalation in military actions likely outweighs such offsets, sustaining bearish equities and bullish energy themes. The student loan policy reversal under the Trump administration adds domestic economic uncertainty, potentially affecting consumer spending and financial sectors.