WS #14752

The dominant market-moving event is the rapid de-escalation of Middle East tensions, specifically regarding the Strait of Hormuz. Following the previous cycle's escalation narrative, Iran has proposed reopening the strait in exchange for a truce, causing oil prices to retreat from highs near $106/bbl (Brent) and $89/bbl (WTI). This geopolitical pivot has triggered a broad risk-on rotation, lifting European equities to their first weekly gain in four weeks and easing pressure on growth assets. However, the ceasefire is fragile; France is deploying military assets to protect the Saudi port of Yanbu, and Houthi missile interceptions continue, suggesting the market is pricing in a 'hopeful' baseline rather than a resolved conflict. In the technology sector, the narrative remains bifurcated. While Meta surged 4.5% on its Muse AI agent launch, Apple faces its worst iPhone slump since the pandemic as Chinese competitors gain share. Conversely, the AI infrastructure buildout is accelerating, with Elon Musk doubling xAI's Colossus 2 chip order and Qualcomm rebuilding its Snapdragon architecture for agentic AI. Oracle faces a specific contractual risk regarding data center power obligations, but the broader hardware demand thesis remains intact. Macro conditions are tightening. US 10-Year Treasury yields are holding near 19-year highs, and the dollar remains strong, pressuring emerging market currencies like the Turkish Lira and Romanian Leu. The Czech National Bank held rates steady, but the broader global liquidity environment is constrained by high yields. In crypto, Bitcoin ETFs saw significant inflows ($190M), supporting price action above $82,000, while Polymarket data indicates high conviction in Bitcoin holding these levels.