WS #13985

The Strait of Hormuz standoff remains the dominant market driver, with Iran's Basij commander asserting Tehran's control over the strait, directly contradicting Trump's claim of US control. This escalation rhetoric, corroborated by multiple sources (Fars, AP, Economic Times, VOV), keeps oil prices elevated but they are easing on demand concerns. Oil prices fell ~0.5-1.8% as OPEC and IEA cut demand forecasts and US crude inventories posted a massive 17.4M barrel build, the largest since January 2023. This demand-side weakness is a counter-signal to the supply-driven bull thesis, but the deadlock in US-Iran talks and Iran's insistence on conditions before reopening the strait maintains a floor under prices. The AI infrastructure trade remains robust, with SK Hynix's $720B buildout, Lenovo's 43% revenue growth, and strong earnings from Super Micro, CoreWeave, and Nebius reinforcing the capex narrative. However, Cisco's post-earnings selloff (-6%) and Oracle's reported job cuts amid AI debt signal some froth. Birkenstock raised FY guidance despite an EPS miss, sending shares up ~10%. The UK economy grew 0.3% in June, beating expectations, but the FTSE slipped. Overall, markets are cautiously optimistic on AI and inflation, but Hormuz remains the key risk.