WS #13037

The US-Iran conflict continues to escalate, with the US launching fresh airstrikes on Iranian targets overnight, including Qeshm Island and areas near the Strait of Hormuz, after Iran fired missiles at US forces in Jordan. This has driven oil prices up ~8% (Brent near $90.75, WTI near $84.76), with US crude inventories falling 7.2 million barrels and the Strategic Petroleum Reserve at a 43-year low. The Fed held rates steady at 3.50%-3.75% but with a 9-3 split (three dissenters favoring a hike), and Chair Warsh signaled a hawkish bias, pushing 30-year yields to 5.2348% and reducing September rate hike odds from 81% to 57%. Microsoft reported strong Q4 earnings (revenue $90B, Azure +43%, net income +31% to $35.8B, Anthropic gain $3.2B) with shares up ~3% after-hours, providing a bullish counter-signal to the tech selloff. Meta disappointed with weak revenue forecast and 91% FCF drop, shares down ~4% after-hours. Japan earthquake death toll rises to 28, but no major market impact. The dominant narrative is ESCALATING US-Iran conflict driving oil and risk-off, but Microsoft's earnings provide a partial offset. The Fed's hawkish hold and bond market tightening add to headwinds.