WS #6224

The dominant macro narrative remains the Iran war and its energy market implications, which is ESCALATING. The key development in this window is President Trump's rejection of Iran's offer regarding the Strait of Hormuz, confirmed by multiple sources (Axios, Zettawire, Alpaca News). This has driven oil prices sharply higher, with WTI and Brent up ~7% and US gasoline futures at their highest since 2022. The US naval blockade remains in place, and Trump has stated it will not be lifted without a nuclear deal. This is a significant escalation that reinforces the bullish energy thesis and bearish consumer/transportation thesis. Additionally, the Senate Banking Committee advanced Kevin Warsh's nomination for Fed Chair, which could signal a shift in monetary policy direction. On the earnings front, several companies reported results, but the most notable is General Dynamics raising its profit outlook, which is consistent with the defense spending narrative. The market is also bracing for a heavy earnings night with Amazon, Meta, Microsoft, and Alphabet reporting after the close, which could drive significant sector moves. The prevailing narrative is that the Iran situation is escalating, with no counter-signals detected.