WS #12834

The dominant signal in this window is a sharp escalation in Middle East tensions, with multiple sources corroborating that Saudi Arabia intercepted Iranian drones targeting its oil facilities, while Houthis claimed strikes on Saudi energy infrastructure. This is partially offset by Trump's Axios interview stating he paused U.S. strikes on Iran to give negotiations a chance, but warning of strong military action if talks fail. Oil prices fell sharply (Brent crude down >9% to $87.59) on the pause, but the drone attacks on Saudi oil infrastructure and renewed Houthi threats suggest the de-escalation is fragile. The narrative is ESCALATING on the ground despite the diplomatic pause. Separately, NVIDIA made a multibillion-dollar investment in Ilya Sutskever's Safe Superintelligence, a high-signal positive for AI infrastructure. The Dallas Fed Manufacturing Index came in at 1.3 (below forecast of 2), a minor miss. Fed rate hike odds are rising (37% for 25bps this week).