WS #13296

The dominant market narrative is a sharp de-escalation in US-Iran tensions, confirmed by multiple sources: Trump announced talks with Iran begin Monday, called off a planned strike, and a Hormuz deal is 'imminent'. This triggered a ~5% drop in Brent/WTI crude (Brent ~$83.85, WTI ~$80.66), boosting risk appetite and pressuring oil-linked equities. Concurrently, the US and Japan confirmed a rare coordinated yen-buying intervention (first since 2011), sending USD/JPY down ~1% to ~156.34, which is battering Japanese exporters and auto stocks. These two macro events are the primary signals. Additionally, China's July manufacturing PMI (RatingDog) came in at 50.9 vs 51.9 expected, signaling slowing factory activity and adding to global growth concerns. In equities, Meta's raised 2026 AI capex guidance to $130-145B (from earnings last week) continues to pressure the stock, while Michael Burry's expanded bearish bets against NVDA and MU highlight growing skepticism on the AI trade. The US-Iran de-escalation is the key counter-signal to the prior oil-supply-crisis thesis, and the yen intervention counters the persistent yen-weakness narrative.