WS #12989

The dominant signal in this window is the escalation of the US-Iran conflict, with US-Saudi strikes on Iran-backed militias in Iraq and Iranian missile attacks on US bases, pushing the region into 'uncharted territory' and ending the brief pause in fighting. This is corroborated by multiple sources (Guardian, Bluesky posts) and is driving oil prices higher (16% spike in a week). Separately, Ukraine launched drone strikes on two of Russia's largest oil refineries (Ryazan and Perm), which could further tighten global oil supply. On the corporate front, General Dynamics raised FY2026 guidance (EPS to $16.80-$16.90, sales to $55.7B), a positive signal for defense. Microsoft short interest hit its highest level since 2015 ahead of earnings, indicating bearish sentiment. Biogen reported better-than-expected Q2 results and raised guidance, driving shares higher. The FOMC decision looms, with Polymarket bets heavily favoring no rate change. The narrative arc is ESCALATING for Middle East tensions and STABLE for the Fed rate outlook.