WS #12527

The US-Iran conflict continues to escalate with the 10th consecutive night of US strikes on Iran, as confirmed by CENTCOM footage and multiple sources. Iran retaliated by striking US military targets in Bahrain and Kuwait, and a tanker was attacked in the Strait of Hormuz, forcing its crew to abandon ship. Houthis declared a naval blockade against Saudi Arabia, threatening the Bab al-Mandeb Strait. Goldman Sachs warns Brent could top $120 if Hormuz disruptions persist. Oil prices remain elevated near $89 Brent, and US gasoline averages $4/gallon. Inflation fears are resurging, with BlackRock estimating 0.8 percentage points added to global headline inflation. Fed hawkishness is expected to persist until energy markets ease. Separately, OPEC+ agreed to another production hike, but uncertain demand limits impact. In tech, Microsoft expanded its Azure partnership with AMD ahead of the Helios AI system launch, a positive for AMD and a potential headwind for NVDA. SpaceX is set to join the Nasdaq-100 tomorrow, with index funds expected to buy shares. Tesla faces a setback as older models (Hardware 3) cannot support full self-driving software, potentially affecting TSLA sentiment. Trump imposed 50% tariffs on Canadian goods, escalating trade tensions. The UK water industry warns of insufficient water for datacenters, potentially impacting UK AI growth plans. New Zealand CPI hit 4.1% driven by fuel costs, reinforcing RBNZ challenges. Asia stocks climbed as oil eased and chip stocks recovered, with Japan's Nikkei up 1.75% and Kospi up 3.6%. The dominant theme is the US-Iran conflict ESCALATING, with oil supply disruption and inflation fears intensifying.