WS #14028

The S&P 500 closed at a record high, driven by cooling inflation data (July PPI at 4.7% vs 5.5% prior) and strong AI-related earnings, with memory chipmakers Sandisk (+13.7%) and Micron (+4.2%) leading gains. This reinforces the 'AI boom, not bubble' narrative, supported by Microsoft and Amazon capex optimism. However, Applied Materials (AMAT) beat Q3 estimates and issued strong Q4 guidance but fell ~4% after hours, suggesting profit-taking or high expectations. Fitch affirmed the US at 'AA+' with a stable outlook, citing high fiscal deficits and gridlock risks, which is a neutral-to-slightly-negative signal for Treasuries. Geopolitically, the Middle East remains tense: ADNOC vessels were attacked in the Strait of Hormuz, and Iran-Oman talks on a temporary shipping route offer a potential de-escalation, but Houthi attacks on Saudi tankers persist. Russia's first-ever gasoline imports from India highlight refinery attack impacts, and Ukraine offered a Black Sea truce, which could ease grain supply concerns. The dominant theme is ESCALATING for Middle East tensions, but with a counter-signal from Iran-Oman negotiations. Key earnings misses (Globant, KinderCare, Blaize) and guidance cuts signal selective weakness in tech and consumer sectors.