WS #6424

The dominant narrative remains the escalating US-Iran conflict, now in a fragile diplomatic phase. Trump has rejected Iran's 14-point peace proposal, threatening renewed military action, and the US has withdrawn 5,000 troops from Germany, with Trump now signaling the drawdown could be 'much more than 5,000.' The Strait of Hormuz remains effectively closed, with US gas prices hitting $4.43, up 61% since December. Spirit Airlines has begun an orderly wind-down and shutdown, citing fuel costs from the Iran war. OPEC+ seven countries are meeting today to raise quotas by 188,000 bpd, but this is largely symbolic while Hormuz is blocked. Ukraine has escalated attacks on Russian oil infrastructure, striking the Primorsk port and Novorossiysk, targeting oil tankers. The Fed's Goolsbee called recent inflation data 'bad news,' signaling rates may stay higher for longer. Unilever warned of price increases due to Iran war costs, with cost inflation of 750-900 million euros. The narrative is ESCALATING on the diplomatic front with no clear resolution, while the economic fallout (Spirit shutdown, gas prices, inflation) is materializing. The US economy grew at a sluggish 1.6% in Q1, and the energy shock is delaying rate cuts. China has blocked US sanctions on five Chinese firms for trading Iranian oil, escalating trade tensions.