WS #12696

The dominant theme remains the escalating US-Iran conflict, now in its 14th day, with a significant escalation: Houthi ballistic missiles have hit the Aramco refinery in Jizan, Saudi Arabia's 5th largest refinery, and Greek-operated Patriot systems intercepted two missiles targeting Yanbu facilities. This opens a second front in support of Iran, directly threatening Saudi oil infrastructure and global supply. The US has reportedly proposed a temporary ceasefire with Iran, seeking a return to the previous Memorandum of Understanding, according to sources. This represents a potential de-escalation signal, but the Houthi attack on Saudi oil infrastructure is a major escalation that could offset any ceasefire progress. Oil prices are elevated, with WTI crude hitting $105 in July, and gas prices spiking in the US. The Russia-Ukraine conflict continues to impact energy markets, with Ukraine striking a Russian refinery and Russia reporting 11 killed in a tourist camp. The Russian central bank cut its 2026 GDP growth forecast to 0.0-1.0% and expects 6-7% inflation due to fuel price increases from Ukrainian strikes on refineries. In tech, Apple is caught in a lobbying fight with Micron over using Chinese memory chips, while Varta, a German battery maker, filed for insolvency after losing Apple as a client. The 'Trump Trade' is losing steam as the Iran war and inflation dent market bets. The S&P 500 flashes sell signals, with options traders bracing for wild swings in Apple, Meta, and Microsoft. Trump threatened tariffs on Europe over fines on Apple and Google, and on Mexico over lettuce and Canada over wildfire smoke. The US lowered its Section 301 tariff on Indian goods to 10% from 12.5%, exempting nearly half of India's exports. Bitcoin ETF weekly trading volume fell to its lowest since October 2024, while ether funds lead inflows.