WS #13960

The dominant themes remain Middle East tensions (Strait of Hormuz closure, Iran war) and the AI infrastructure rally, with the latter showing strong momentum. US July CPI at 3.4% YoY in line with expectations, easing Fed rate hike fears, supporting equities. AI infrastructure trade continues to surge: CoreWeave +19%, Super Micro +19%, Nebius +34%, with CoreWeave's $104B order backlog and commentary on GPU longevity validating the AI capex cycle. However, after-hours earnings disappointments in Cerebras (-14%), StubHub (-15%), and Cisco (-3%) signal selective profit-taking. Oil prices remain elevated with Brent near $88, as Iran insists the Strait of Hormuz remains closed, countering US claims of control. This keeps upward pressure on energy stocks and downward pressure on airlines. The US budget deficit for July hit $432.3B, the highest monthly since 2021, raising concerns about Treasury supply and yields. Wendy's surged 15% on a Trian-led take-private bid, a notable M&A signal. Intel's upsized $20B share offering at $95/share reflects its turnaround momentum but may dilute near-term. Overall, the market is in a 'risk-on but selective' mode, with AI infrastructure and energy leading, while high-multiple tech and consumer discretionary face headwinds.