WS #6219

The dominant macro narrative remains the Iran war and its energy market implications, which is ESCALATING. Multiple sources confirm Ukrainian drone strikes on Russian oil infrastructure (Tuapse, Perm, Orsk refineries) and a Ukrainian Navy strike on a shadow fleet tanker in the Black Sea, directly tightening global oil supply. Oil has topped $100, with WTI at $105 and Brent at $115, up ~5% in the session. The White House confirmed discussions on continuing the Iran blockade for months, and the Wall Street Journal reports Trump has ordered preparations for a prolonged blockade. The UAE's exit from OPEC+ adds further uncertainty, though Russia says it will remain in OPEC+. The IAEA warns Iran could access its near weapons-grade uranium stockpile, adding nuclear risk. The Bank of Canada held rates at 2.25%, noting the Middle East war as a source of uncertainty and assuming oil declines to $75 by mid-2027. The Fed is expected to pause today, with markets pricing no rate cuts until at least mid-2027. On the MAG7 front, today is a massive earnings day with GOOGL, MSFT, AMZN, and META reporting after the close. Implied moves are large (MSFT 6.9%, META 7.0%). Seagate (STX) reported better-than-expected Q3 results and issued Q4 guidance above estimates, driving shares higher. General Dynamics (GD) beat Q1 estimates. Avis Budget (CAR) missed Q1 estimates, shares falling. The macro energy crisis is the dominant force, but tech earnings will be the key catalyst for the next 8 hours. Key developments in this window include: the Senate Banking Committee advancing Kevin Warsh's nomination for Fed Chair to a full Senate vote, clearing a key hurdle for the transition; the UK formally declaring the London stabbings a terrorist incident, which may have limited market impact but adds to geopolitical unease; and the Supreme Court ruling against Louisiana's congressional map, which is a political story with limited direct market impact. The IAEA warning that Iran could access its near weapons-grade uranium stockpile if it retrieves material from bombed sites is a significant escalation of nuclear risk, potentially driving safe-haven flows and oil premiums. The UAE's OPEC exit, confirmed by the Kremlin as not coordinated with Russia, adds supply uncertainty but may be partially offset by the UAE's desire to increase production. Overall, the energy crisis remains the primary market driver, with tech earnings as the key event risk for the next 8 hours.