WS #14050

The dominant Middle East narrative remains in an ESCALATING phase, with the US threatening an indefinite naval blockade of Iran and Treasury Secretary Bessent warning of 'unprecedented' economic isolation measures next week. This is corroborated by multiple sources including Moneycontrol, Times of India, and ETMarkets. Oil prices have steadied after a 2% drop, with Brent near $87 and WTI around $81, but remain on track for ~4% weekly gains. The UAE's accusation that Iran attacked two ADNOC vessels in the Strait of Hormuz adds to supply concerns, while OPEC and IEA demand downgrades and a large US crude inventory build act as counterweights. This geopolitical backdrop is pressuring airlines and shipping while supporting energy names. Separately, the US has imposed tariffs of up to 100% on imported drones, with 25% on smaller models and 15% on those from key allies, effective in 21 days, impacting drone manufacturers and importers. On the AI front, SanDisk's strong outlook lifted memory chipmakers (Micron +4.2%, SanDisk +13.7%), and Nvidia's $500 billion AI infrastructure financing initiative with Apollo, BlackRock, and KKR continues to support the AI capex supercycle, with BlackRock, Apollo, and Blackstone all up 2-5% on the day. Bill Ackman's Pershing Square has taken a new stake in Netflix, sending NFLX up 5.4%. US equities hit record highs on softer PPI data, with the S&P 500 closing at 7,799, while the 30-year Treasury yield remains elevated above 5.2%.