WS #13273

The dominant US-Iran/oil narrative is DE-ESCALATING with new diplomatic developments: Trump has called off a planned strike on Iran, citing a potential deal that would reopen the Strait of Hormuz, and Iran's foreign minister says negotiations with Oman over the strait are in 'final stages.' However, an LNG carrier (GasLog Shanghai) was struck and disabled in the Strait of Hormuz, and Rubio is pushing for permanent alternative shipping routes, indicating ongoing supply-chain risk. Oil prices remain volatile around $89-90 Brent, with supply risks underpriced. Separately, a major tech divergence is emerging: Amazon's blowout earnings (+15.3%) and Microsoft's AI-driven surge contrast with Meta's 91% FCF drop and Tesla's China exit speculation, creating a MAG7 carve-out. The Fed's credibility is under pressure as Treasury yields spike (30Y above 5.2%), with St. Louis Fed's Musalem advocating a rate hike, which could weigh on growth stocks. Ukraine's drone strikes on Russian oil infrastructure (30%+ refining capacity offline) add to energy supply concerns. Overall, the market faces a tug-of-war between de-escalation hopes and persistent geopolitical/energy risks.