WS #12529

The dominant signal in this window is a significant escalation in the US-Iran conflict, corroborated by multiple sources. Iran's Revolutionary Guards have claimed attacks on a tanker in the Strait of Hormuz and a US military site in Jordan, while Houthis have announced a maritime blockade of Saudi Arabia in the Red Sea. This marks a sharp escalation from the previous stable narrative, with Iran's president stating the country has returned to 'full-scale war'. The Strait of Hormuz remains effectively shut, and US gasoline prices have surpassed $4/gallon. In a counter-signal, Iran's interior minister traveled to Pakistan for talks, suggesting a potential diplomatic off-ramp. Separately, Japan's Nikkei Average surged 3%, driven by a rebound in Asian semiconductor stocks, which also lifted Bitcoin to a two-week high near $65,500. UK political developments under new PM Andy Burnham include a VAT cut on electricity bills, but this is a domestic UK story with limited US market impact.