WS #15739

Geopolitical risks are escalating sharply as Houthi strikes on Saudi Arabia and a Ukrainian strike on a Russian oil terminal compound the ongoing Strait of Hormuz disruption. Brent crude is trading above $100, with a tanker struck in the Strait of Hormuz further tightening supply. This supply shock is driving a broad risk-off sentiment, evidenced by Bitcoin sliding 2.2% to $83,700 and the Nasdaq 100 underperforming. The Trump administration's 'energy ceasefire' is proving ineffective against these kinetic disruptions, with Ukraine explicitly violating the truce by striking Russian fuel infrastructure. In the technology sector, a divergence is emerging between AI infrastructure demand and consumer hardware weakness. While Meta is accelerating AI development and Amazon is reportedly in talks to acquire AI startup Decart for $7 billion, Apple is cutting iPhone 18 Pro orders due to softer demand and high AI-driven costs. Additionally, Micron is facing headwinds from a Chinese competitor's breakthrough. The broader tech sell-off is being exacerbated by comments from Intel and Broadcom CEOs regarding capital constraints for AI expansion, despite strong demand. Corporate developments are dominated by a $1 billion buyout rumor driving a 49% surge in Bumble (BMBL), while Shield AI is deepening its partnership with GE Aerospace on autonomous defense systems. In macro policy, the Bank of Russia is expected to raise rates, and the EU has imposed its largest-ever sanctions on the Russian military-industrial complex. The market is now pricing in a sustained 'war premium' on energy, pressuring airlines and shipping while benefiting energy majors and defense contractors.