WS #14355

The dominant theme remains the escalating US-Iran military conflict, which is intensifying. US forces struck two Iranian rocket launchers on Larak Island in the Strait of Hormuz, and Iran retaliated with ballistic missiles against US bases in Jordan, also claiming attacks on US ships in the Strait and the UAE's Al Minhad Air Base. Brent crude has surged above $90/barrel (up ~2.8%), with WTI near $85.5, as the market prices in heightened risk to Hormuz shipping. This is corroborated across multiple sources (Reuters, AP, GDELT, OSINT, and numerous regional outlets). The escalation is compounded by Treasury Secretary Bessent's weekly secondary sanctions on banks to isolate Iran financially, and Iran's warning to all countries not to implement new US sanctions. A counter-signal is the US-Venezuela oil deal, where the US claims control of 65 billion barrels of reserves to refill the Strategic Petroleum Reserve, but this is early-stage and cannot offset immediate supply risks. The Fed rate-hike narrative is also intensifying: Fed Chair Warsh's hawkish Jackson Hole speech has pushed September hike odds to ~57-60%, pressuring Asian equities, gold, and the yen (which breached 160/USD). Barclays now expects hikes in both September and December. The US-Canada trade war is also escalating with Trump's 50% tariffs on Canadian autos and steel, pressuring Canadian-linked equities and benefiting US manufacturing. Apple's September 9 iPhone event and new CEO John Ternus taking over September 1 are notable but secondary to the macro risk-off tone.