WS #13390

The dominant market theme is a sharp de-escalation in the US-Iran conflict, centered on the Strait of Hormuz. Treasury Secretary Scott Bessent stated a deal to reopen the strait could come 'today or tomorrow', corroborated by multiple sources (CNBC, CNA, GDELT). This triggered a broad risk-on rally: Dow Jones hit a record high near 53,936 (+1.43%), S&P 500 opened at a record, and oil prices plunged 4-5% (Brent below $80, WTI near $76). This is a major counter-signal to the prior bearish oil-supply thesis, with second-order effects: airlines and refiners benefit from lower input costs, while energy producers face headwinds. However, a cargo ship (Minoan Pioneer) was hit by a projectile in the strait, underscoring that the situation remains fluid and could reverse. Separately, strong earnings from Caterpillar (CAT +8-11%) and Palantir (PLTR +15-18%) are driving the rally, with PLTR's 'otherworldly' quarter and raised guidance signaling continued AI infrastructure demand. The macro narrative is ESCALATING toward resolution, but the ship attack is a counter-risk.