WS #13911

The dominant market narrative remains the escalating Middle East conflict, with the Strait of Hormuz closure persisting and oil prices surging. Brent crude is trading near $90/bbl, up over 1% today, with Dubai crude jumping 10% to $88.99. The US and Iran remain at odds: Trump claims total control of the strait while Iran's security chief reiterates conditions for reopening, including ending regional wars and releasing frozen assets. Shipping traffic through Hormuz hit a one-week low of 8 vessels, down from a 10-day average of 12, versus a pre-conflict norm of 130-140. This is corroborated across multiple sources (EconoTimes, Kpler, LSEG, various news outlets). The oil supply shock is pressuring airlines and shipping, while benefiting energy producers and refiners. A key counter-signal emerged: Ukraine has halted drone strikes on Russian oil tankers near Novorossiysk at the request of US VP JD Vance, potentially easing some supply disruption fears, though the impact is limited to Black Sea routes. Additionally, a massive drone attack on Novorossiysk port and oil terminal occurred, but Ukraine's halt may be a response to US pressure to stabilize oil markets. The US CPI report due later today is the next major catalyst; expectations are for a modest 0.1% MoM increase and 3.4% YoY, with gasoline prices falling. A weaker-than-expected print could reduce Fed hike odds, supporting risk assets. In tech, AI demand remains robust: CoreWeave revenue more than doubled to $2.58B with backlog at $104B, Super Micro forecast FY27 revenue above estimates, and Nvidia announced a $500B AI infrastructure financing plan with major asset managers. Samsung and SK Hynix surged 7% on reports of potential Temasek investment, lifting the KOSPI 4%. However, Apple faces headwinds from DRAM shortages and a potential iPhone production slowdown, with conflicting reports on its all-glass iPhone project. The Harmony blockchain suffered a major exploit, with 4B ONE tokens minted, crashing the token 30%. Overall, the theme is ESCALATING, with oil and geopolitical risk dominating, but AI-driven tech strength provides a partial offset.