WS #12746

The dominant signal in this window is the escalation of the Iran conflict into a broader regional war, with Houthi attacks on Saudi Aramco facilities and a new front opening in the Red Sea. This has driven Brent crude above $100/barrel, with significant implications for energy stocks, airlines, and consumer sectors. The US has paused its bombing campaign to facilitate Iran-Oman talks, but the situation remains highly volatile. A counter-signal is the reported progress in Iran-Oman negotiations to reopen the Strait of Hormuz, which could de-escalate the crisis. Additionally, the Pentagon has requested $67.1 billion in emergency funding for the war, and the cost has reached $37.5 billion. The Fed is expected to hold rates steady at its upcoming meeting, with inflation concerns exacerbated by the conflict. Small businesses have filed lawsuits against Trump's new sweeping tariffs, adding to trade uncertainty. The narrative is ESCALATING on the military front but with diplomatic counter-signals.