WS #12697

The US-Iran conflict remains the dominant market driver, with the narrative now shifting from escalation to potential de-escalation. After 13 consecutive nights of US bombing, Friday night saw no direct US strikes on Iran, and the US has reportedly proposed a temporary ceasefire with Iran, seeking a return to the previous Memorandum of Understanding. However, the situation remains highly volatile: Houthi ballistic missiles hit the Aramco refinery in Jizan (Saudi Arabia's 5th largest), and Greek-operated Patriot systems intercepted two missiles targeting Yanbu facilities, confirming a second front against Saudi oil infrastructure. Iran's IRGC has fired on four ships in the Strait of Hormuz, and the Bab el-Mandeb Strait is effectively closed, with Saudi oil tankers turning back. The US Navy seized an Iranian missile fuel ship. These developments keep oil supply risks elevated, supporting energy stocks and pressuring airlines and consumer sectors. In corporate news, Apple announced a $30 billion Broadcom chip supply deal through 2031, expanding US manufacturing. This is a significant positive for AVGO and signals Apple's commitment to domestic chip production amid the Micron-Chinese chip lobbying fight. Tesla's Q2 earnings call highlighted record deliveries, strong FSD attach rates (55% of North American deliveries), and a major multiyear capital spending cycle. The 'Trump Trade' is losing steam as the Iran war and inflation dent market bets, with the Ned Davis Research index slumping 16% since May. Short selling is surging, with short interest hitting a record $2.39 trillion in June, indicating growing bearish sentiment. Gold prices have plunged 22% since the conflict began, now at ~$4,150/oz, as the Fed is expected to keep rates higher for longer. The S&P 500 flashes sell signals, with options traders bracing for wild swings in Apple, Meta, and Microsoft. Cross-source corroboration is strong on the US-Iran ceasefire proposal (multiple sources including Al Jazeera, NYT, and social media), the Houthi attack on Saudi oil infrastructure (multiple social media posts, Reuters confirmation), and the Apple-Broadcom deal (social media and WSJ). The Varta insolvency (losing Apple as a client) is confirmed by multiple European sources. The Nvidia-SK Group $500 billion AI partnership is a major positive for NVDA and the AI infrastructure theme.