WS #14976

The geopolitical crisis in the Middle East has escalated sharply as the Trump administration rejected Iran's proposal to reopen the Strait of Hormuz, sending Brent crude past $107 and triggering a broad risk-off environment. This rejection, combined with the previous spike in 30-year Treasury yields to 5.535%, has created a hostile macro backdrop where energy supply shocks are colliding with inflation-driven rate hike fears. US futures are red across the board, with the Nasdaq down 1% and the S&P 500 off 0.4%, reflecting the market's repricing of real rates and energy costs. In the technology sector, a notable divergence is emerging. While the broader market is weighed down by macro headwinds, Meta is gaining ground in the spatial computing race by launching its $1,299 VR glasses, capitalizing on Apple's decision to scrap a lighter Vision Pro. This development highlights a competitive shift where Meta's aggressive pricing and product iteration are outpacing Apple's internal development. Meanwhile, NVIDIA continues to push its AI agent safety platform, maintaining its narrative dominance in AI infrastructure despite the broader tech selloff. Corporate earnings and guidance are mixed, with Zymeworks missing sales estimates and Sarepta Therapeutics facing a reiterated Underperform rating, signaling continued pressure in the biotech space. Conversely, Palo Alto Networks saw a price target raise, and Gray Media benefited from higher political advertising revenue. The market is currently prioritizing the macro energy shock and rate fears over individual company fundamentals, though selective opportunities in energy beneficiaries and tech leaders persist.