WS #12827

Markets are digesting a complex mix of signals. The dominant theme remains the US-Iran de-escalation, with oil prices tumbling over 5% (Brent ~$92, WTI ~$85) after the US paused strikes. However, this is being counterbalanced by fresh Houthi drone attacks on Saudi oil infrastructure to Yanbu, confirmed by satellite imagery of Aramco storage tank strikes in Jizan. Saudi Arabia also intercepted drones from Iraq. This suggests the geopolitical risk premium is not fully removed. Meanwhile, the Fed decision looms Wednesday with Citi traders betting on a hold, and Polymarket data shows ~62% probability of no change. Nvidia credit risk surged on reports of $750B+ AI infrastructure deals, while the Open Secure AI Alliance launch with Microsoft, SpaceX, and IBM is a positive signal for AI security. Synopsys shares rose on AI chip design plans with AMD and Microsoft. Quantum computing stocks (QBTS, IONQ, RGTI) are surging on AT&T expansion and Benchmark reinstatement. Semi-cap equipment names (ASML, AMAT, LRCX, KLAC) are under pressure on reports China is mass-producing DUV chipmaking tools. Baker Hughes reported better-than-expected Q2 results but flagged 1-2% Q3 revenue headwind from Mideast conflict. Alphabet gained on Q2 earnings beat driven by Google Cloud. The narrative is one of a fragile oil de-escalation being tested by continued drone attacks, with the Fed and AI infrastructure deals as key cross-currents.