WS #14000

The dominant market narrative is risk-on, driven by cooling US inflation (PPI below expectations, headline PPI flat m/m) and a sharp drop in oil prices (WTI -2.5% to $81.16, Brent -2.2% to $86.29) as OPEC and IEA slash 2026 demand outlooks. This has pushed the S&P 500 to a record intraday high, with the Nasdaq 100 up 1.2%. Bond traders have stopped fully pricing in a Fed rate hike this year, with September pause odds rising to 65.6%. The oil price decline is a mixed-cohort event: bearish for energy producers (XOM, CVX) but bullish for airlines (DAL, UAL) and consumers. However, geopolitical risk remains elevated: Iran claims full control of the Strait of Hormuz, rejecting Trump's claims, and Houthis claim a drone attack on an Aramco refinery in Jizan, Saudi Arabia, briefly paring oil losses. The US Defense Secretary stated the US can hold the blockade as long as needed. These developments are partially offset by the demand-side weakness, keeping oil prices lower. In tech, Nvidia shares fell 2.8% to $217.51 despite SpaceX announcing it will use Nvidia hardware for AI, while Cisco dropped ~9% on a weak AI outlook. AMD announced a $5B debt offering. Super Micro Computer (SMCI) saw a large bullish call sweep and Bernstein raised its price target after strong guidance. Databricks closed a $5B round at $190B valuation. Pershing Square's Ackman announced a new pre-IPO fund and discussed portfolio changes. The US-Canada trade talks continue ahead of the August 19 tariff deadline, with Canada unhappy with the latest US offer. Ukraine attacked a key Russian grain terminal on the Black Sea, and Ukrainian drones struck a major Russian refinery, the fourth in three days, keeping geopolitical risk elevated.