WS #13916

The dominant Middle East/oil narrative remains in an escalation phase with no genuine de-escalation signals. Iran has explicitly denied reports of reopening the Strait of Hormuz, and fresh Houthi attacks in the Bab el-Mandeb Strait have killed crew members, marking the first shipping deaths since the war began. Brent crude is hovering near $89-90, with WTI around $83.5, as the US-Iran ceasefire extension reports (via Pakistani sources) are unconfirmed and contradicted by Iran's denial. The US Energy Secretary's claim that Middle East oil flows have normalized is contradicted by ship-tracking data, reinforcing the supply risk premium. This continues to support energy names (XOM, CVX) while pressuring airlines (DAL, UAL) and shipping (MATX, ZIM). Separately, the AI infrastructure trade remains robust: CoreWeave surged 18% premarket on a Q2 beat and raised FY26 guidance to $12.4B, Super Micro jumped 9% on record AI server backlog and strong Q1 guidance, and Lumentum saw strong demand. Nvidia's $500B financing partnership with Wall Street firms is being scrutinized as potential leverage risk, but the immediate market reaction is positive for AI infrastructure names. The July CPI report is due today; consensus is +0.1% MoM headline, +3.4% YoY, with core +0.2% MoM. A softer print could trigger a dovish repricing, while a hot print may be muted given Fed chair Warsh's reluctance to hike. The dollar is firm, gold is up, and European markets are mixed with the DAX at record highs. Also notable: Bank of America announced a $250B infrastructure finance initiative, and Intel raised $20B in its first share sale since 1971, both signaling strong capital flows into AI and infrastructure.