WS #13452

The dominant narrative remains the imminent reopening of the Strait of Hormuz, with US, Iran, and Oman reportedly close to an interim deal. This is corroborated by multiple sources (Al Jazeera, Guardian, Polymarket activity) and is driving oil prices down, gold to a one-month high above $4,100, and a risk-on tone in equities. However, Iran's state media cautions that a deal does not guarantee immediate reopening, and continued Houthi attacks and drone strikes on shipping (Turkish cargo ship hit) keep geopolitical risk elevated. The ADP private payrolls report for July came in at 44,000, well below the 68,000-75,000 consensus, signaling labor market softening, which supports the case for Fed rate cuts rather than hikes. Minneapolis Fed's Kashkari, however, stated it is 'time to start slowly moving rates up,' creating a hawkish counter-signal that could pressure rate-sensitive sectors. In earnings, several notable moves: SpaceX extends decline to 11% premarket on lockup expiry and capex fears, impacting AMD as SpaceX shifts to Nvidia; Uber falls on soft Q3 guidance; Shopify surges on a beat; Eli Lilly raises revenue guidance but trims EPS; and CVS Health raises FY26 EPS guidance. Google is in talks for a $1.5B+ deal with AI coding startup Mechanize, and Nvidia is weighing over $750B in AI financing deals, including a $250B guarantee for an OpenAI data center, underscoring the AI infrastructure boom. China announced countermeasures against six US entities, adding to trade tensions. The overall narrative is STABLE with a slight ESCALATION in geopolitical risk due to continued attacks, but the Hormuz deal optimism is the primary driver.