WS #6340

The dominant market-moving theme is the escalating US-Iran conflict, with multiple sources confirming a 90% decline in Strait of Hormuz shipping traffic, Iran activating air defenses, and the US imposing new sanctions. This has pushed Brent crude to ~$112/barrel, with oil prices at 4-year highs. The conflict is driving input costs higher in US manufacturing (ISM PMI at 52.7, below forecast) and causing ripple effects across sectors: airlines face fuel cost pressures (Spirit Airlines preparing to shut down after bailout collapse), while energy companies benefit (PBF Energy using Jones Act waiver to transport domestic crude). The Pentagon's AI deals with seven companies (including GOOGL, MSFT, NVDA, AMZN) signal a major catalyst for defense and AI sectors. Meanwhile, the Nasdaq crossed 25K for the first time, driven by tech earnings, but market breadth is narrowing. Apple reported record quarterly results with iPhone 17 driving revenue, while Twilio beat estimates on AI-driven growth. The macro narrative is mixed: strong tech earnings vs. geopolitical risk and rising energy costs. The 30-year Treasury yield nearing 5% adds pressure on growth stocks. Key developments in this window: Trump announced a 25% tariff on EU cars and trucks, escalating trade tensions. Spirit Airlines is preparing to shut down after bailout talks collapsed, which could impact airline sector and travel demand. The Strait of Hormuz blockade continues with shipping down 90%, keeping oil prices elevated. Apple's record iPhone 17 sales and supply constraints due to TSMC chip shortages are notable. Intel's SambaNova deal received antitrust clearance, signaling AI infrastructure investment. The Fed's hawkish stance (Hammack, Logan) suggests rates stay higher for longer. Bitcoin's rally is driven by leverage, not spot demand, making it vulnerable. The US administration claims the Iran war has ended, which could de-escalate geopolitical risk.