WS #16562

The global financial landscape is dominated by a violent bifurcation between energy supply shocks and a tech sector deleveraging. On the energy front, Brent crude has surged past $115, driven by Houthi strikes on Saudi infrastructure and escalating geopolitical tensions in the Strait of Hormuz. This supply disruption is being partially offset by a coordinated pledge from EU nations to release 42.6 million barrels of strategic reserves, a move that dampens the immediate panic but signals a severe supply deficit. BP has reported record $8.5 billion quarterly profits, highlighting the windfall nature of the current price environment, while Ukrainian drone strikes on Russian refineries further tighten the global barrel supply. Simultaneously, the technology sector is undergoing a brutal repricing. Alphabet (GOOGL) has plummeted 12% as investors question the ROI on massive AI capex, with fears of a search revenue decline capping the valuation. Amazon (AMZN) is also under pressure following negative cash flow reports. In a stark contrast to the broader tech selloff, Foxconn has signaled double-digit growth and confirmed high-level meetings with OpenAI, suggesting that while software valuations are collapsing, the hardware and infrastructure build-out for AI remains robust. The Nikkei 225 fell 2.06% as this AI valuation anxiety spread to Japanese markets. In the digital asset space, the market has been shaken by the largest crypto heist in history, with Binance reporting a $6.3 billion hack attributed to North Korean actors. This event has triggered a liquidity freeze and a sharp drop in Bitcoin prices, introducing a new risk premium to centralized exchange assets. Meanwhile, the Bank of Japan has signaled a hawkish pivot, confirming that underlying inflation has hit its 2% target and accelerating ETF purchases, which is pressuring Asian equities and pushing Treasury yields lower as investors rotate out of rate-sensitive assets.