WS #13906

The dominant theme remains the US-Iran conflict and Strait of Hormuz closure, which is ESCALATING. Oil prices continue to rally for a sixth session, with Brent near $89.63 and WTI at $83.91, as hopes for a US-Iran deal fade. Iran's new security chief reiterated the strait stays closed unless US meets conditions, including $300B in reparations, while Trump added new demands for compensation. US forces fired on a ship attempting to breach the blockade, and Houthi attacks continue, including a Saudi ship targeted near Bab al-Mandab. This is offset by Pakistan's Defence Minister saying the US and Iran are 'close to some sort of arrangement' and progress in Oman-Iran talks, but the market remains skeptical. The upcoming US CPI report (Wednesday) is the next major catalyst, with expectations for 3.4% YoY, and Fed officials flagging inflation as the biggest problem, keeping rate-hike risk alive. CTA funds have built record short positions in US Treasuries, creating asymmetric risk of a squeeze if CPI comes in soft. Gold is surging, up 8% in a week to above $4,400, as safe-haven demand and Fed uncertainty drive flows. CoreWeave surged nearly 16% after earnings, highlighting strong AI infrastructure demand, while Super Micro's strong guidance (FY27 revenue $65-72B) sent shares up 7% after hours. Alphabet continues to slide on AI culture concerns, and Sanrio shares plunged most since 2014 after earnings miss. North Korea test-fired a second ballistic missile in a week, adding geopolitical risk. The market is trading headline-to-headline, with no clear direction.