WS #13528

The dominant theme remains the US-Iran conflict and Strait of Hormuz deadlock, which is showing signs of both escalation and potential de-escalation. Iran and Oman are in the final stage of drafting an agreement to manage shipping through the strait, with a joint statement expected unless 'third parties' obstruct the process. The proposed deal would give Iran control over inbound traffic, a major concession, and is contingent on the US ending its naval blockade. However, Iran's deputy foreign minister denied any US-Iran negotiations, contradicting Trump's claims of 'excellent talks,' and Iran has warned Gulf states of retaliation against energy infrastructure if attacked. Brent crude is up ~2% to $81, and WTI is up ~1.6% to $76.4, reflecting continued supply risk. This is corroborated by multiple sources (Al Jazeera, Reuters, GDELT, Polymarket, DW). The narrative arc is STABLE-to-ESCALATING: the deal is progressing but not finalized, and Iran's denial of US talks adds uncertainty. Separately, the tech earnings selloff is intensifying: Western Digital (WDC) is down ~15% premarket despite a beat, SanDisk (SNDK) is down ~10% after guidance missed, and Datadog (DDOG) is down 14% despite a beat. This is pressuring the Nasdaq, with chip stocks slipping (MU -3.5%, AMD, MRVL, INTC down >1%). Alphabet (GOOGL) is marketing a bond offering of up to $25 billion, which is pushing long-end Treasury yields higher (10Y at ~4.65%) and steepening the curve, testing investor appetite for AI-related debt amid concerns about negative free cash flow. The KOSPI dropped 4.6% on SK Hynix's 10.4% plunge, reflecting a broader AI-chip selloff. Macro data was positive: US initial jobless claims came in at 199k vs 205k forecast, and German industrial orders spiked 3.1% vs 0.5% expected, but these are secondary to the geopolitical and earnings signals. Fed Chair Warsh is reportedly sticking with his scaled-back communication strategy, with markets pricing a 56% chance of a September rate hike, adding to rate-sensitive pressure.