WS #13407

Markets are surging to record highs on a combination of strong AI-related earnings (Palantir, Caterpillar, Broadcom, ON Semiconductor) and escalating hopes for a US-Iran deal to reopen the Strait of Hormuz, which is crushing oil prices (Brent below $80, WTI ~$76). Treasury Secretary Bessent said a deal could come 'today or tomorrow,' and Qatar reports 'very advanced' progress, though Iran denies direct US talks and is pushing an Oman-mediated corridor. This geopolitical optimism is the dominant macro driver, offsetting inflation fears and fueling a broad risk-on rally (Dow +1,000, S&P 500 record). However, there are counter-signals: Iran demands concessions (transit fees, sanctions relief), a ship was attacked near Hormuz, and Trump's 'last chance' rhetoric adds uncertainty. Oil's collapse is a double-edged sword: it boosts airlines and consumer stocks but pressures energy producers (Exxon, Chevron) and oil-dependent economies. In corporate news, Palantir's blowout quarter (+26%) is the standout, validating AI spending and lifting the whole AI complex, while Chipotle is hit by a salmonella outbreak (-9%). Novo Nordisk fell 5% despite raising guidance, and Amazon slipped 2.5% on Bezos stock sale plans. The AI trade remains bifurcated: hyperscalers (MSFT, AMZN) are winning, while Apple and Meta lag. Overall, the narrative is ESCALATING bullish on Hormuz deal hopes, but with high headline risk.