WS #14715

Geopolitical tensions in the Middle East have escalated sharply, with Houthi forces claiming a large-scale strike on Saudi military sites, driving Brent crude above $105/barrel and WTI near $95. This supply shock is pressuring consumer and transport sectors while benefiting energy producers and refiners. Concurrently, the Trump-Xi summit has yielded a diplomatic thaw, with both leaders calling for cooperation on trade and AI, providing a counter-narrative to the geopolitical friction and offering relief to global supply chains and tech sentiment. In corporate news, Oracle has issued a force majeure on its $18B AI data center deal, raising concerns about AI infrastructure delivery timelines and causing the stock to drop nearly 5%. Meanwhile, PepsiCo has announced price increases after previous cuts failed to drive volume, signaling a defensive margin strategy rather than strong pricing power. In the energy sector, the US Treasury's $6B long-end debt buyback had a muted impact on yields, which rose slightly, reflecting persistent inflation fears and Fed hawkishness.