WS #13047

The dominant signal in this window is the ongoing US-Iran military conflict, which is ESCALATING. Multiple sources (Al Jazeera, NYT, NBC, AP, OSINT) confirm US airstrikes on IRGC targets in Iran overnight, with Iran vowing retaliation. A Russian missile breached Polish airspace, raising NATO-Russia tensions, though Polish PM Tusk downplayed it as not targeted at Poland. The Fed held rates at 3.50%-3.75% (9-3 vote), but bond markets called the bluff: 2Y yields fell, 10Y rose to ~4.68%, 30Y to ~5.22%, and September hike odds fell to ~65%. The dollar dropped, with USD/JPY falling 0.5% to 162.5, and the yuan rose to its highest since early 2023. Oil-related developments: Ukrainian drone strikes continue to hit Russian refineries (Perm, Lukoil), and US strikes on Iran threaten Strait of Hormuz. Energy earnings were strong: Valero (VLO) beat by $2.41, PBF Energy (PBF) beat by $2.10, TC Energy (TRP) beat. Refiners are bullish. On the earnings front, several companies reported beats: Regeneron (REGN) beat by $4.03, Trane Technologies (TT) raised guidance, Omnicell (OMCL) beat and raised, Columbus McKinnon (CMCO) beat and raised, Bombardier beat, Cinemark (CNK) beat, Butterfly Network (BFLY) beat, Darling Ingredients (DAR) beat by 148%. However, Qualcomm (QCOM) dropped 6% premarket on weak guidance due to rising memory costs and smartphone headwinds. The EU announced $11.4 billion for 7 AI gigafactories to catch up with US and China. The Ebola outbreak in Congo has topped 1,500 deaths. Overall, risk-off sentiment persists due to geopolitical tensions, but energy and defense stocks are bullish.