WS #16611

Geopolitical tensions in the Middle East have escalated sharply, with confirmed reports of Iranian Revolutionary Guard attacks on oil tankers in the Strait of Hormuz and renewed Ukrainian drone strikes on Russian refineries. This dual supply shock is driving oil prices higher, creating a bifurcated market where energy majors like ExxonMobil and Chevron are seeing strong earnings and price action, while airlines and shipping face margin compression. The escalation narrative is now firmly entrenched, overriding previous de-escalation hopes. In the technology sector, the AI spending narrative continues to fracture. Alphabet's 13% post-earnings drop highlights the market's growing impatience with AI monetization, while Amazon's AWS growth remains a bright spot. Meanwhile, Intel's catastrophic 28% earnings miss underscores the widening divergence between legacy semiconductor manufacturers and AI-focused chipmakers. The market is rotating out of broad tech exposure into specific winners and defensive energy plays.