WS #13979

The Strait of Hormuz standoff remains the dominant market driver, but the narrative is shifting from pure escalation to a demand-supply tug-of-war. While Iran's IRGC adviser explicitly stated Tehran could prolong the war until Trump leaves office, and the US Senate passed a war powers resolution to halt military action, oil prices are falling on demand concerns. OPEC cut its 2026 demand growth forecast for the fourth time to 580k bpd, and the IEA now sees a 1.6 million bpd decline in consumption, with US crude inventories surging by 17.4 million barrels—the largest weekly build since January 2023. Brent is trading around $87.7-88.8, down from the $90+ highs, as the market weighs supply disruption against weakening demand. This is a counter-signal to the pure supply-crisis thesis, pressuring energy names while providing some relief to airlines and shipping. The UK GDP data showed Q2 growth of 0.4% (in line), but the Guardian and Sky News highlight that high energy prices from the Iran war are starting to weigh on growth, with UK inflation expected to rise further. The AI infrastructure theme continues to intensify: Anthropic is reportedly in talks to acquire Nvidia-backed Decart AI for up to $6B, and investors expect Anthropic's IPO valuation to reach $2 trillion, which would be the largest in history. Nvidia's $500B AI financing plan is drawing scrutiny, with Jensen Huang seeking to ease credit risk concerns. Cerebras Systems tumbled 17% after hours despite beating earnings, as its hardware business revenue declined, while Super Micro Computer surged 19% on upbeat results, providing a positive read-through for Nvidia. The MSCI August rejig adds four Indian stocks (Adani Energy, Groww, Laurus Labs, Lenskart) and removes three, which could drive passive flows. The US CPI report (3.4% YoY, core 2.5%) was in line, reducing September Fed hike odds to ~40%, and the dollar is steady. The Senate's war powers resolution is largely symbolic but signals political pressure on Trump, potentially de-escalating the conflict narrative.