WS #16793

Geopolitical tensions in the Middle East are escalating significantly, with the US confirming strikes on Iran and Iran demanding sanctions relief and recognition of sovereignty over the Strait of Hormuz. This escalation is driving a flight to safety, evidenced by gold holding support above $3,900 an ounce and bond yields moving on war headlines. The market is pricing in a high-risk environment where energy supply disruptions are a primary concern, though oil prices have shown some resilience or minor dips depending on the specific news cycle regarding peace talks versus active strikes. In the technology sector, a divergence is emerging. While Nvidia is facing headwinds from new export restrictions requiring 51% of AI compute to be directed to non-China customers, and TD Cowen has cut its target to $175, the broader chip sector is seeing mixed signals. Micron is approaching a critical $150 billion valuation juncture, and while some AI infrastructure plays like Tower Semiconductor are advancing, others like Apple are under pressure due to supply constraints and regulatory issues. The Nasdaq has entered a correction phase as AI worries intensify, though some indices are attempting to bounce from key moving averages. Corporate earnings and guidance are providing pockets of stability amidst the macro noise. Shopify raised its Q4 revenue growth guidance to the low 30s, though the stock fell on broader market sentiment. In the energy sector, Black Stone Minerals is expanding its acreage, and Bloom Energy saw a 10% jump on clean energy tailwinds. Meanwhile, the Brazilian central bank maintained the Selic rate at 13.75%, adding to the global rate-hike narrative that continues to pressure high-multiple growth stocks.