WS #12690

The dominant signal in this window is the continued escalation of the Iran conflict and its impact on oil prices, with multiple sources confirming Houthi missile strikes on Saudi Arabia and Saudi retaliatory strikes on Yemen. Oil prices surged above $100 before pulling back to ~$96, with Brent crude up nearly 9.8% for the week. The conflict is expanding to the Red Sea, threatening key shipping routes. Second-order effects include rising gas prices above $4/gallon in the US, rekindling inflation fears and pressuring bonds. The Pentagon has requested $67.1 billion in supplemental funding for the Iran war, which has already cost $37.5 billion. Separately, Nvidia and SK Group announced a $500 billion AI initiative, reinforcing the AI infrastructure buildout theme. The Iran conflict narrative is ESCALATING, while the AI infrastructure narrative remains STABLE with a major new deal.