WS #6555

The dominant market narrative remains the escalating US-Iran conflict in the Strait of Hormuz, with the situation STABLE but tense. Multiple sources (Al Jazeera, NBC, Al-Monitor, Pentagon) confirm an exchange of fire between US and Iranian forces, but the ceasefire is still described as 'not over' by Hegseth. Iran attacked an oil facility in Fujairah, UAE, and the US claims to have sunk Iranian boats. The Pentagon explicitly says the ceasefire continues despite the UAE attack. This is a counter-signal to the prevailing escalation thesis: the conflict is not escalating into a full war, but rather a contained exchange. Oil prices remain elevated but the immediate risk of a supply disruption is being managed. Separately, Ukraine continues to strike Russian oil infrastructure, with confirmed hits on the Kirishi refinery (Leningrad region) and Tuapse refinery, causing large fires and over $300M in damage. This adds to supply-side pressure but is a secondary factor. In corporate news, DigitalOcean (DOCN) surged 18% after a Q1 beat and raised FY26 guidance, indicating strength in the cloud/AI infrastructure space. Backblaze (BLZE) also surged 51% on strong Q1 results and AI customer growth. PayPal (PYPL) announced $1.5B in cost savings via AI, but CFO warned of Q2 pressure. SoundHound AI (SOUN) launched its OASYS self-learning AI platform. Broadcom (AVGO) announced VMware Cloud Foundation 9.1 for AI workloads. K Wave Media (KWM) scrapped its bitcoin treasury plan to redirect $485M to AI, sending shares down 24%. The MAG7 narrative shows mixed signals: GOOGL is cited as 'on fire' with strong Q1 earnings, while NVDA's gross margin declined and EPS growth was inflated by its Intel stake. TSLA is noted as having a valid breakout. The overall market narrative is that US stock futures climbed as the ceasefire appeared to hold, but the rally is narrow and reminiscent of the dot-com bubble, per Bloomberg.