WS #13388

The dominant theme remains the US-Iran situation, with Treasury Secretary Bessent reiterating that a deal to reopen the Strait of Hormuz could be reached 'today or tomorrow,' while Trump has given Iran until today to comply or face air strikes. This is corroborated by multiple sources (Bessent statement, Trump deadline, Polymarket activity on Hormuz and ceasefire). Oil prices have fallen sharply (Brent -4.24% to $80.22) on hopes of de-escalation, which is a counter-signal to the previous bullish oil thesis. However, Saudi Aramco's Q2 earnings ($33.4B adjusted net income) and commentary that refineries have 'virtually no ability to increase capacity' support a structurally tight oil market, suggesting any deal-driven oil decline may be limited. The equity market is at record highs (S&P 500 opened at record), driven by strong earnings: Caterpillar's blowout Q2 (record $20.5B revenue, raised outlook) confirms AI data center demand, and Palantir's 93% revenue growth reinforces the AI narrative. Other notable earnings: Toyota beat (EPS $7.57 vs $5.33 est), Merck double beat, Sysco raised outlook, while BioNTech, Smith & Nephew, FIS, and AdaptHealth missed. The US trade deficit narrowed in June, and Fed's Paulson signaled steady rates with inflation concerns. The situation is ESCALATING on the geopolitical front with a potential de-escalation if a deal is reached, but the market is pricing in a positive resolution.