WS #13438

The dominant narrative remains the US-Iran deal optimism and its market effects, with a key new development: a deal to reopen the Strait of Hormuz is said to be close, with an announcement targeted for tomorrow, according to two regional sources and a U.S. official. This is corroborated by multiple sources including Al Jazeera, GDELT, and Polymarket signals, and has driven oil prices down (Brent below $80, WTI ~$75.90) and US stocks to record highs (S&P 500 above 7,700, Dow at 54,085.88). The narrative is ESCALATING in terms of deal progress, with Treasury Secretary Bessent saying a deal could be reached as early as Tuesday or Wednesday, and details emerging of a 60-day deal using Iranian inbound waters and Omani outbound waters with zero fees. However, there are counter-signals: Iran denies talks are underway, and there are reports of Iranian intelligence arresting Mossad/CIA agents near Hormuz, plus a Russian ballistic missile strike on Kyiv and Ukrainian drone strikes on Russian infrastructure, indicating continued geopolitical risk. The oil price slide is a counter to the earlier bullish oil thesis, benefiting airlines and consumer stocks but pressuring energy producers. In tech, AMD stock tumbled nearly 9% after hours despite a Q2 beat, and SpaceX fell 7.5% on capex concerns, while Palantir surged 29.5% on strong earnings. Microsoft faces a securities class action lawsuit and has the highest short interest in a decade ahead of earnings, while Alphabet's cloud margins improved to 35.6% with a $514B backlog. Bitcoin is holding around $63,400-64,000 despite Strategy selling 1,638 BTC and a US spot ETF closing, with whales accumulating. The yen is firmer at 157.60 after intervention, with Bessent saying the US will do 'whatever it takes' to support Japan, and BOJ rate hike expectations for September. Overall, the market is in a risk-on mode driven by Hormuz deal hopes, but with underlying tech and geopolitical risks.