WS #16733

Geopolitical tensions have escalated sharply following reports of US strikes on Iran's Qeshm Island, driving oil prices higher and triggering a broad risk-off sentiment across global markets. The Middle East theme is now firmly in an escalation phase, with energy beneficiaries like Saudi Aramco and CVR Energy rallying on supply disruption fears, while airlines and shipping face headwinds from potential Strait of Hormuz closures. Concurrently, Apple's margin warning regarding rising memory costs has sparked a global tech rout, creating a divergence between the energy rally and the technology selloff. In macro news, the Reserve Bank of Australia raised interest rates to an 18-year high, underscoring persistent inflationary pressures despite the geopolitical volatility. Meanwhile, China has reportedly instructed investment banks to pause IPOs and large stock offerings to stabilize its domestic markets, a move that dampens near-term liquidity but aims to prevent further downside. The US midterm elections have begun, introducing political uncertainty that is weighing on the dollar and gold, though geopolitical safe-haven flows continue to support precious metals. Notable corporate developments include Marvell's acquisition of Lumentum's laser pantry, which has drawn mixed reactions from the market, and Pershing Square's critique of hyperscaler capital intensity, highlighting skepticism around AI revenue growth. In the energy sector, Germany's gas plant tenders came in significantly below maximum prices, providing a temporary offset to energy inflation fears, while Saudi Aramco reported surging profits due to the war environment.