WS #13899

The dominant US-Iran conflict narrative remains in an escalation phase, with Iran reiterating that the Strait of Hormuz will stay closed until US conditions are met, while Pakistan claims sides are close to an arrangement. Oil prices remain elevated, with Brent trading above $88 and WTI above $83, pressuring equities and fueling inflation concerns ahead of Wednesday's July CPI report. The market is pricing roughly a 50% chance of a September Fed rate hike, and CTA bond shorts are at record levels, creating asymmetric risk if CPI comes in soft. Corporate earnings continue to show strength in AI infrastructure: Super Micro Computer guided FY27 revenue to $65-72B and Q4 revenue up 93% YoY, CoreWeave beat Q2 expectations, and Nvidia's $500B AI financing platform with Apollo, BlackRock, Blackstone, Brookfield, Goldman Sachs, and KKR is moving forward. Lumentum reported a 109% revenue surge on AI demand, and Firefly Aerospace delivered a double beat with a Space Force win. However, Apple is testing memory chips from China's CXMT, which could pressure Micron and other memory suppliers, and the company is also stockpiling OLED panels to manage costs. The US Senate passed a Russia sanctions bill allowing 100% tariffs on top Russian oil importers, including India, which could have second-order effects on global trade. North Korea launched a suspected ballistic missile, adding to geopolitical noise. Overall, the market is in a wait-and-see mode ahead of CPI, with tech earnings providing selective bullish signals.