WS #7207

The dominant macro narrative remains the Iran oil crisis, which is ESCALATING. Multiple sources (Reuters, Bluesky, Alpaca) report that Saudi and Kuwaiti fighter jets struck Iran-backed militia targets in Iraq, and Iran's foreign minister accused Kuwait of unlawfully attacking an Iranian boat and detaining four citizens in the Persian Gulf. Separately, a UAE-owned tanker is leaking fuel off Oman following an Iranian strike. These developments directly threaten oil supply routes through the Strait of Hormuz, reinforcing the oil price spike scenario. The Senate again blocked a resolution to limit Trump's war powers, maintaining the status quo. No counter-signals such as diplomatic de-escalation or strategic reserve releases are present in this window. On the corporate front, Anduril completed a funding round at a $61 billion valuation, highlighting defense sector momentum. Fervo Energy IPO is indicating above its IPO price, suggesting strong demand for energy/IPOs. The CLARITY Act crypto legislation is one vote away in the Senate Banking Committee, which could be a significant catalyst for crypto markets. Fed's Collins favors keeping rates on hold for 'some time', reinforcing the higher-for-longer rate narrative. The PPI came in hot (1.4% MoM vs 0.5% expected), with wholesale inflation at 6% annually, the biggest since 2022, driven by energy costs. This supports the stagflationary thesis. Key developments in this window include: (1) Trump arrives in Beijing for high-stakes summit with Xi, with trade and Iran on the agenda — this is a potential de-escalation signal for trade tensions but also a wildcard for Iran talks. (2) The U.S. Strategic Petroleum Reserve reports a record weekly drawdown of 8.6 million barrels, confirming the administration is actively managing energy market stress. (3) OPEC production fell more than 30% since the start of the Iran conflict, exacerbating supply tightness. (4) Tower Semiconductor nearly doubles operating profit on AI tailwinds, with shares surging 15% — a positive signal for the semiconductor sector. (5) The CLARITY Act crypto legislation is one vote away in the Senate Banking Committee, with more than 100 amendments filed, indicating high stakes for crypto markets. (6) Anduril raises $5 billion at $61 billion valuation, reinforcing defense sector momentum. (7) Fervo Energy IPO indicating $35.50/share vs $27 IPO price, signaling strong demand for energy IPOs. (8) A large dark pool order of $386M in XLV (healthcare) suggests institutional positioning in the sector. (9) Metaplanet delays preferred share listing due to Japanese market challenges, a minor negative for crypto-related equities. (10) The PPI data (1.4% MoM, 6% YoY) confirms persistent inflation, supporting the Fed's hawkish stance and pressuring growth stocks.