WS #12604

The US-Iran conflict continues to escalate, with the US striking Iranian targets for an 11th straight night and Secretary of State Rubio accusing Iran of not honoring the Strait of Hormuz deal. This is an escalation of the previous situation. Separately, Trump outlined plans for up to 200% tariffs on generic drug imports starting in 2028, which could significantly impact pharmaceutical stocks. McDonald's stock fell to its lowest in 2 years, a bearish signal for MCD. Equinor reported Q2 earnings that missed estimates, with EPS of $1.33 vs $1.39 consensus, though the company announced a $3B buyback program. Japan's trade balance for June came in at -406.9B, much worse than the -120.0B estimate, indicating economic weakness. TSMC plans to raise prices by up to 10% in 2027, which is bullish for TSMC and could impact chip buyers. Explosions were reported in the Parchin area near Tehran, adding to geopolitical risk. A major wildfire in southern France has burned 1,700 hectares and left two firefighters dead, but market impact is limited. Wistron began operations at its Texas AI server factory for Nvidia, confirming the AI infrastructure buildout. The dominant narrative is the escalating US-Iran conflict, which is bearish for equities and bullish for oil and defense stocks.