WS #15118

The US military withdrawal from Iraq is now complete, fulfilling the 2024 Biden agreement. This resolves a high-significance geopolitical risk but introduces a security vacuum in the region, potentially emboldening Iranian proxies and ISIS. While this de-escalates direct US combat involvement, it sustains the broader Middle East tension narrative, shifting the focus to proxy stability and regional power vacuums. The market impact is muted for defense stocks that had priced in ongoing commitments, but shipping and energy routes remain under watch for potential Houthi or proxy disruptions. Earnings season is in full swing, with Micron (MU) reporting after-market today, a critical bellwether for the AI and semiconductor cycle. The market is closely watching for guidance on HBM and data center demand. Meanwhile, Cal-Maine Foods (CALM) reported a significant miss, with EPS of -$1.26 missing estimates by over 100% and revenue down 41.5% YoY, highlighting pressure in the food sector. This is a localized negative signal for agricultural/food stocks but does not broadly impact macro sentiment. Geopolitical tensions remain elevated elsewhere, with Pakistan locking down Islamabad over Imran Khan’s party protests, and Ethiopia facing fears of civil war return. These are high-impact regional events but have limited direct US market spillover. In Europe, the UK-France 'one in one out' migrant deal is set to expire, adding to political friction but with no immediate financial market consequences. The dominant market narrative remains anchored by the US-Iraq withdrawal and the upcoming Micron earnings, with secondary attention on regional instability.