WS #13711

The dominant market-moving theme in this window is the Strait of Hormuz crisis, which is ESCALATING. Iran's Supreme National Security Council, via secretary Mohammad Bagher Zolghadr, issued a sweeping list of new demands for reopening the strait, including lifting the naval blockade, withdrawing US military forces, paying war reparations, lifting sanctions, and unconditionally releasing frozen assets. This is corroborated by multiple sources (NBC, AP, Al Jazeera, GDELT, and various international outlets). Simultaneously, Iranian Foreign Minister Araghchi said Iran and Oman are 'very close' to a new shipping protocol, but that the strait will not reopen immediately and additional conditions (including US compensation) must be met. IRGC spokesperson Mohebi reiterated that reopening depends on the US 'fully' accepting Iran's conditions. This dual-track messaging—progress on an Oman deal but hardline conditions on the US—creates uncertainty for oil markets, with Brent around $83.55 and WTI around $78.18. The US position, per VP Vance, is that Washington is 'in the middle of the game' and assessing whether Iran will make changes; he claimed the US 'destroyed' Iran's nuclear program. The 60-day negotiation period from the June interim deal ends in just over a week, adding a near-term catalyst. This is a high-significance geopolitical development with direct implications for energy prices and risk sentiment. Separately, the Pentagon has ordered a surge in arms production due to depleted missile stockpiles from the war with Iran, which is bullish for defense contractors. Also notable: a Ukrainian drone exploded near a Bulgarian gas pipeline compressor station, raising energy infrastructure risk in Europe. On the corporate front, several earnings surprises emerged: Peabody Energy reported a Q2 GAAP loss of $0.74/share, 75.9% below consensus (bearish BTU); Marathon Digital missed by $1.77 EPS (bearish MARA); New Fortress Energy missed by $1.09 EPS (bearish NFE); Oklo missed by $0.12 EPS (bearish OKLO); Datadog beat by $0.07 EPS and raised guidance (bullish DDOG); Onto Innovation jumped 14.74% on strong Q2 results (bullish ONTO); IonQ rose 11.86% on 287% revenue growth (bullish IONQ); Navitas Semiconductor rose 12.02% (bullish NVTS). Global equity fund inflows reached $27.21 billion, with $1.75 billion into EM funds, indicating risk-on flows. The US 10-year yield hit 4.68%, highest weekly close since January 2025, and oil and dollar broke out technically, suggesting a potential summer correction in equities with energy and financials as rotation targets. The Coldcard hardware wallet hack ($100M attack) and AI-driven security audit uncovering 5,000 vulnerabilities across 400 projects is a bearish signal for crypto sentiment, though Bitcoin is around $64,900. The dominant narrative is the Hormuz escalation; no counter-signals emerged in this window.