WS #13927

The dominant theme remains Middle East tensions, with the US-Iran conflict over the Strait of Hormuz escalating. President Trump claimed 'total control' over the strait, calling the naval blockade a 'wall of steel,' while Iran and Oman near a deal to manage the strait, suggesting a potential de-escalation. The IEA more than doubled its global oil deficit forecast to 1.8 million bpd for Q3, and OPEC cut its 2026 demand growth forecast, both supporting elevated oil prices. US July CPI came in at 3.4% YoY, core 2.5%, in line with expectations, reducing September rate hike odds to ~42%, providing a modest tailwind for equities. AI infrastructure demand remains robust, with Super Micro, CoreWeave, and Nebius beating earnings, lifting memory and AI-related stocks. However, a WSJ report warns that Nvidia's $500B chip-backed financing plan could create a subprime-like risk, adding a cautionary note to the AI trade. Other notable developments include Wendy's surging on a potential take-private bid from Nelson Peltz's Trian, and the Lakers being sold to Bob Iger and Josh Kushner for $12.5B, which may have limited market impact.