WS #14062

The Middle East conflict remains the dominant market driver, with the Strait of Hormuz blockade persisting and escalating. The US has shifted its stated war goal to keeping oil and gas prices low, with VP Vance explicitly ranking this above preventing Iran from acquiring a nuclear weapon, while Treasury Secretary Bessent threatens 'unprecedented' economic sanctions. Maritime traffic through the strait picked up 44% day-on-day to 13 crossings on Aug 13, but a tanker was struck by a drone on Aug 14, and Asian refiners are increasingly buying US crude as alternative supply, indicating the blockade's persistence. Oil prices are recovering after a two-day correction, with WTI up 0.4% on supply concerns, but demand destruction and OPEC's fourth consecutive demand forecast cut are capping gains. The US has imposed new tariffs on drone imports (100% on sensitive drones, 25% on smaller ones, 15% on EU/Japan/Korea/Taiwan components), which is boosting US drone stocks. In corporate news, Apple has trained a custom AI model for China with Alibaba's support, a departure from its third-party strategy, and is also proposing a 5-15% cut on external App Store payments. Silver Lake is reportedly in talks to acquire Workday in a mega buyout, sending WDAY shares up 18%. Reddit is set to join the S&P 500, replacing AvalonBay, effective Aug 18. Bitcoin remains under pressure at ~$62,765 with ETF outflows, while the broader market is supported by cooler PPI data reducing September Fed hike odds to ~35%.