WS #2848

The Strait of Hormuz crisis remains the dominant market signal, with Iran escalating tensions by charging ships up to $2 million for safe passage, as reported by Bloomberg and corroborated across multiple sources. This move directly threatens global oil supply, reinforcing the bearish energy supply narrative and likely driving further volatility in oil prices. Concurrently, military posturing intensifies with the US 82nd Airborne Division deployment order and Iran's rejection of a ceasefire, amplifying regional instability risks. However, diplomatic counter-signals emerge, including skepticism of Trump's talks and Iranian denials of dialogue, which could dampen escalation if negotiations progress. In energy markets, the crisis spurs mixed responses: crude oil gains around 4% and energy sectors are up 2.5%, while United Airlines warns of potential 20% fare hikes due to elevated jet fuel prices, impacting airlines and travel stocks. The UAE condemns Iran's actions as 'economic terrorism,' and QatarEnergy's force majeure declaration adds supply pressure. Concurrently, India's government announces immediate measures to strengthen natural gas infrastructure, potentially offsetting some disruption effects and benefiting energy infrastructure sectors. Economic indicators show stagflation risks, with Goldman Sachs flagging U.S. inflation hitting 4.9% by spring and French statistics agency trimming growth forecasts while projecting HICP inflation rising to 2.2% by June. These data points, corroborated across Reuters and other sources, suggest broader macroeconomic headwinds that could pressure equities and bonds. Specific stock movements include Intuitive Machines down 10% on risk-off sentiment, while dark pool alerts for VTI indicate large institutional activity, reflecting underlying market caution amid geopolitical uncertainty.