WS #14065

The US-Iran conflict remains the dominant market driver, with the Strait of Hormuz effectively closed after two more ADNOC tankers were attacked. The US has signaled it can maintain its naval blockade indefinitely, and Treasury Secretary Bessent has warned of unprecedented economic measures against Iran next week. This has pushed Brent crude to ~$87-88, with WTI near $82, and US gasoline averaging $4.08, up 92 cents YoY. Asian refiners are pivoting to US crude as a substitute, which supports US energy exports. The situation is ESCALATING, with no de-escalation signals. Meanwhile, US July retail sales fell 0.6% MoM, the biggest drop in over a year, missing expectations of +0.1%, which has dampened Fed rate-hike bets, sending the dollar to May lows and Treasuries higher. This is a counter-signal to the prevailing hawkish Fed narrative. In corporate news, Reddit's addition to the S&P 500 is confirmed, with shares up 12% premarket. SanDisk and Micron are strong after investor day and analyst upgrades, with JPMorgan reinstating Overweight on SanDisk with a $2250 target. AMD's Helios rack shipping challenges Nvidia's AI infrastructure dominance, while Nvidia partners with Goldman to raise $500B for AI infrastructure. The market is at record highs, with S&P 500 hitting its 27th record close of 2026, but futures are subdued as oil prices curb risk appetite.