WS #13742

The dominant theme remains the US-Iran conflict and the Strait of Hormuz, which is ESCALATING. Iran's Revolutionary Guards have formally stated they will not reopen the Strait of Hormuz until the US meets a list of demands including compensation for war damage, lifting sanctions, and removing troops. This directly contradicts earlier reports that a deal was close, and multiple sources (WSJ, Xinhua, AFP, ANI) corroborate that Trump's options for a face-saving exit have narrowed. The WSJ report that Trump is willing to walk away without a nuclear deal if Hormuz reopens is a potential de-escalation signal, but Iran's hardline stance and the Houthi attack on a Saudi oil facility suggest continued oil supply risk. This is bearish for oil prices and bullish for energy stocks, while pressuring airlines and consumer discretionary. Separately, Apple is reportedly testing memory chips from Chinese supplier CXMT, which is on the Pentagon's blacklist, to address memory shortages and price increases. This could face regulatory hurdles and has implications for Apple's supply chain and US-China tech tensions. Also, Alibaba plans to introduce revenue-sharing for its open-source Qwen AI model, a shift in monetization strategy that could impact its cloud/AI business. The US jobs report showed unemployment fell to 4.1% but payrolls declined by 23,000, which markets interpreted as reducing the odds of a Fed rate hike, supporting equities. The upcoming CPI and PPI data will be key catalysts.