WS #9463

The dominant signal in this window is the escalation of US-Iran hostilities, with both sides exchanging airstrikes and trading new threats. The US struck Iranian water facilities and radar sites after an Apache helicopter was downed near the Strait of Hormuz; Iran retaliated by hitting US bases in Bahrain and Jordan. President Trump warned Iran would 'have to pay the price,' while Iran vowed to 'leave no attack unanswered.' This marks a significant escalation from the April ceasefire and threatens to disrupt oil flows through the Strait of Hormuz, with direct implications for energy prices and risk assets. Separately, the Bank of Canada held rates at 2.25% as expected, with commentary noting weak economic activity, persistent trade policy uncertainty, and a commitment to look through near-term inflation driven by energy prices. The US May CPI came in at 4.2% (a three-year high), with real weekly earnings turning negative, reinforcing stagflation fears. Bitcoin continues to hover near cycle lows (~$61,000) with over 50% of supply underwater, while ETF outflows and rate fears deepen the crypto selloff. On the corporate side, Cracker Barrel surged over 30% after a Wells Fargo upgrade, and Robinhood saw a large insider buy of $20.2M at $80.7, signaling confidence in the stock. The US-Iran escalation is the primary market-moving theme, with energy stocks likely to benefit and risk assets under pressure.