WS #13252

The dominant market narrative is the US-Iran conflict, which is now showing signs of DE-ESCALATION after President Trump announced he would hold off on strikes against Iran, citing a potential deal to end the war. This is corroborated by multiple sources (GDELT, AP, NBC, Sputnik) and is a high-significance development that could reduce the oil risk premium. However, Iran's acting defense minister and Fars news agency deny any agreement on reopening the Strait of Hormuz, creating uncertainty and keeping oil prices elevated. OPEC+ has agreed to increase production by 188,000 barrels per day in September, completing the rollback of voluntary cuts, but analysts note this is largely symbolic due to Hormuz constraints. This is a counter-signal to the oil supply crisis, potentially dampening bullish energy sentiment. In FX, Japan and the US conducted a joint yen-support intervention, the first since 2011, which is a significant policy move that could impact USD/JPY and Japanese equities. In tech, the Nasdaq-100 had its worst month since March 2025, with semiconductor stocks plunging 21% in July, the worst since 2008, as investors question AI spending. This is a major bearish signal for the tech sector, but there are pockets of strength: Amazon's AWS growth is strong (JPMorgan raised target), and Apple warned of supply constraints due to high demand, which is a positive for AAPL. Bitcoin is under pressure, testing $63,800 support, with Strategy (MSTR) posting an $8.2B Q2 loss and considering selling up to $5B in BTC, adding to crypto bearishness. Overall, the market is in a risk-off mode with a rotation from tech to financials, but the potential Iran deal could trigger a relief rally in risk assets.