WS #13542

The dominant market theme remains the Strait of Hormuz crisis, but this window shows meaningful escalation and new specifics. Iran is reportedly seeking to impose a 5-7% 'service fee' on ships transiting the Strait, with Oman discussing ~3% and the US resistant, while Iran and Oman are near finalizing a joint control agreement for vessel exits (Iran taking sole entry control). Iran's parliament is also reviewing a bill to ban US and Israeli vessels from the Strait. These developments, corroborated by multiple sources (Reuters, Fars, Al-Arabiya, Ilfattoquotidiano), suggest the crisis is ESCALATING in terms of regulatory/economic control even as diplomatic talks continue. Oil prices are surging (WTI +3.5% to ~$77.8, Brent +4% to ~$82.6), with Polymarket showing elevated odds on WTI hitting $105 and $140 in August. The US has reportedly used up 'virtually all' precision missiles, and Trump clashed with Hegseth over munitions shortages, limiting military options against Iran. This is a counter-signal to any de-escalation narrative: the US military constraint could paradoxically increase the risk of a negotiated settlement but also raises uncertainty. In corporate news, several high-profile earnings surprises are moving stocks: Honeywell Aerospace (HONA) plunged ~19-21% on gloomy guidance, AppLovin (APP) fell ~19.6% on mixed results, Datadog (DDOG) dropped ~16-18% despite a beat-and-raise, while Axon (AXON) surged on strong AI-driven results (revenue +35%, ARR +39%, raised guidance). SpaceX (SPCX) reported first earnings with revenue +92% but heavy capex, sending shares down 8% after hours, with a major lockup expiry of 900M+ shares today. The Fed narrative is shifting: Warsh is ditching forward guidance, dollar hedging costs jumped, and there's a 54% chance of a rate hike in September per futures. Fed Governor Cook voted against hiking but is ready to act if inflation persists. This hawkish tilt is a macro headwind for growth stocks.