WS #6045

The dominant signal in this window is the escalating geopolitical risk in the Middle East, with the US military ordering 38 ships to reverse course or return to port, indicating a potential blockade or heightened military posture in the Strait of Hormuz. This corroborates the previous narrative of elevated oil prices and geopolitical tension, now escalating with direct naval action. Oil has surged past $107/barrel as stalled US-Iran negotiations keep the Strait of Hormuz closed. Separately, Treasury Secretary Bessent stated the US will not renew its waiver for Russian oil purchases at sea and has ruled out renewing Iran's one-time waiver, further tightening oil supply. The attempted assassination of Trump at the White House correspondents' dinner adds a layer of domestic political uncertainty, though the DOJ has requested dismissal of a related lawsuit. The confirmation path for Fed chair nominee Kevin Warsh has been cleared after the DOJ dropped its investigation into Jerome Powell, removing a key obstacle for monetary policy continuity. Global military spending rose 2.9% in 2025, driven by Europe and Asia, signaling sustained defense sector demand. The overall narrative is ESCALATING geopolitical risk with oil price implications, countered by no de-escalation signals.