WS #7213

The dominant narrative remains the Iran oil crisis, which is ESCALATING. New data confirms Hormuz flows fell nearly 30% last quarter (EIA), and the Senate rejected a war powers resolution for the seventh time, signaling sustained US military commitment. The Trump-Xi summit is the key near-term catalyst: traders assign 86% probability to a Boeing aircraft purchase announcement and 81% to a tariff truce extension, but China's help on Iran may require US concessions on Taiwan. This creates a binary event for markets—a positive outcome could ease oil supply fears and boost Boeing, while failure could trigger renewed US military action. Counter-signals are absent; no de-escalation or policy intervention has emerged. Separately, Fervo Energy's strong IPO debut (+33%) and Ford's surge on Morgan Stanley's bullish energy call highlight sector-specific momentum in energy and AI-adjacent themes. Nvidia hit a record high, and Broadcom options activity suggests bullish sentiment ahead of earnings. The macro backdrop remains challenging: Minneapolis Fed's Kashkari noted the Iran conflict has 'upended' inflation, and Wells Fargo still sees two rate cuts despite hot PPI, indicating policy uncertainty.