WS #13070

The dominant signal in this window is the massive unwind of Leopold Aschenbrenner's Situational Awareness hedge fund, which has completely liquidated its portfolio after leveraged AI bets failed, with up to $24B in assets. This event is corroborated by multiple sources (CNBC, Financial Times, Seeking Alpha) and directly explains the sharp rebound in AI/tech stocks (MSFT +16.5%, SNDK +25%, NBIS +29%, BE +25%) as the forced selling pressure from the fund's unwind is removed. Microsoft's blowout earnings (Azure +43%, revenue $90B, EPS beat) provide a fundamental catalyst for the tech rally, with Bloomberg reporting it's on track for the largest one-day market value increase in history (~$490B). The MSFT earnings also serve as a counter-signal to the prevailing bearish AI capex narrative, showing that massive spending is being monetized. Meanwhile, the US-Iran conflict continues to escalate with missile barrages, a Russian missile crash in Poland triggering NATO response, and Iran asserting control over the Strait of Hormuz, keeping oil prices elevated. Meta's stock plunged -9% on AI spending concerns and weak guidance, contrasting sharply with MSFT's positive AI narrative. The Fed held rates but with a 3-vote dissent for a hike, and US GDP missed at 1.5% annualized. The narrative is one of a tech-led relief rally driven by the removal of a major overhang (Situational Awareness unwind) and strong MSFT earnings, while geopolitical risks and macro weakness persist.