WS #14358

The situation remains dominated by Middle East tensions, with the US striking Iranian launchers at Larak Island and Iran retaliating against US bases in Jordan and UAE. These actions have intensified the already volatile regional dynamics, leading to a surge in Brent crude above $100/barrel as the Strait of Hormuz chokepoint tightens. The Fed's signals of possible rate hikes and the increased likelihood of a September hike to ~60% have further fueled market uncertainty. While the US-Canada trade war and other narratives remain unchanged, the Middle East escalation has become the primary driver of market sentiment, with energy and defense sectors showing heightened activity. The situation is stable, but the risk of further escalation remains high, with potential impacts on global markets and geopolitical stability.