WS #8416

The dominant macro theme remains the escalating US-Iran conflict, with fresh tit-for-tat strikes overnight. Multiple sources (NYT, Bloomberg, Washington Post, Al Jazeera, social media) confirm the US bombed an Iranian launch site near the Strait of Hormuz and Iran retaliated by attacking a US air base in Kuwait. This has pushed Brent crude to $97.83 and sent the Fed's preferred inflation gauge (PCE) to 3.8% YoY, the highest since May 2023. Core PCE hit 3.3%, while Q1 GDP was revised down to 1.6%, creating a stagflationary backdrop. The US Treasury sanctioned Iran's Persian Gulf Strait Authority and is shutting down Iranian airlines' access to landing spots and refueling. Oil prices are surging, which is bullish for energy stocks and bearish for airlines, consumer discretionary, and growth stocks. The narrative is clearly ESCALATING, not de-escalating. Separately, several earnings reports and corporate developments provide stock-specific signals: Snowflake surged premarket after a Q1 double beat and a $6B AWS AI partnership deal; Best Buy beat estimates; Hormel topped FQ2 estimates; Heico jumped 9.2% on a record quarter; Dell won a $9.7B Pentagon contract; and CNN filed suit against Perplexity AI for copyright infringement. The macro stagflationary shock from the Iran conflict is the primary market-moving force, with oil-sensitive sectors and inflation expectations dominating the tape.