WS #14045

The dominant theme remains Middle East tensions, but the window shows a notable de-escalation in oil prices despite fresh attacks on UAE vessels in the Strait of Hormuz, with WTI falling 2.4% to $81.25 and Brent down 2.1% to $87.07 on demand concerns and US inventory builds. This suggests the market is increasingly pricing out a sustained supply disruption, a counter-signal to the prevailing escalation narrative. The US announced tariffs of up to 100% on imported drones, a protectionist move that could benefit domestic drone makers but pressure importers. In tech, Applied Materials reported record revenue of $9.12B but missed the whisper EPS number, while Reddit's addition to the S&P 500 is a positive catalyst. The Fed rate path remains a key driver, with September hike odds falling to ~35% after soft PPI, supporting equities. The S&P 500 hit a record close, led by tech and AI names, but the 30-year Treasury auction at 5.22% (highest since 2001) signals fiscal concerns. Overall, the market is in a 'risk-on' mode driven by disinflation and AI earnings, but oil and trade policy remain wildcards.