WS #13965

The dominant theme remains the Strait of Hormuz closure and its market impact, with the situation STABLE-to-ESCALATING. Iran's Persian Gulf Strait Authority explicitly rejected Trump's claim of 'total control,' stating the strait remains blocked until its conditions are met, directly countering any de-escalation narrative. This is corroborated by multiple sources (ANI, gCaptain, Times of India) and reinforces the bearish oil-supply thesis. However, oil prices edged lower (WTI -0.22% to $83.02, Brent -0.13% to $88.79) as traders await progress, and OPEC cut its 2026 oil demand growth forecast to 600k bpd from 800k bpd, a bearish demand-side signal that partially offsets supply concerns. The AI infrastructure trade is firmly back in leadership, with CoreWeave (+19.3%), Super Micro (+19%), Nebius (+15.5% to +34%), and Lumentum (+13.6%) surging on strong earnings, and Jim Cramer explicitly declaring the 'AI data center trade is back.' This is corroborated by multiple sources (CNBC, GDELT, Newsquawk) and is the primary driver of the Nasdaq's +0.54% gain. US July CPI came in at 3.4% YoY, in line with expectations, easing Fed rate-hike fears and supporting a September hold, though the market still prices a 25bps hike by year-end. The UK Treasury's warning that growth could slow to 0.3% in 2027 if Hormuz remains closed adds a macro downside risk. A notable counter-signal: the AI trade's strength is partially offsetting the oil-driven inflation and geopolitical risk, keeping the S&P 500 near record highs. Watch for Thursday's PPI and initial jobless claims as the next catalysts.