WS #15702

Geopolitical risk remains the dominant market driver, with the Middle East tension narrative escalating further. Oil prices are holding above $105/bbl, supported by ongoing Strait of Hormuz disruptions and new reports of Iranian naval activity. While a US-brokered 'energy ceasefire' in Ukraine has been announced, it has been immediately rejected by Russia and Ukraine, with Zelensky accusing Moscow of breaking the truce. This failure to de-escalate the Eastern Front reinforces the bearish outlook for European energy security and keeps risk premiums elevated in crude markets. In corporate news, the financial sector is seeing a divergence: Salesforce is rallying sharply on a significant upgrade from Bank of America, while broader consumer weakness is emerging. US household delinquency rates have spiked to 7.2%, the highest level since 2009, signaling potential strain on consumer credit that could weigh on retail and financials. Meanwhile, the energy transition continues to attract capital, evidenced by a $1.2 billion solar joint venture between TotalEnergies and KKR. Regulatory developments in AI and crypto are also active, with Microsoft calling for stricter global AI oversight and the SEC extending comment periods for crypto asset rules.