WS #6228

The dominant signal in this window is the continued escalation of the US-Iran conflict, with President Trump rejecting Iran's offer to reopen the Strait of Hormuz and confirming the naval blockade will remain until a diplomatic deal is reached. This has pushed Brent crude above $116-118/barrel, with oil surging 5-6% in the session. The Pentagon has spent approximately $25 billion on the conflict so far, and CENTCOM has prepared plans for a 'short and powerful' wave of strikes on Iranian infrastructure. The Strait of Hormuz remains effectively closed, with shipping costs surging and S&P warning that even if it reopens, oil flows will recover only gradually. This is driving UK borrowing costs to their highest since 1998, German inflation accelerating to 2.9% on energy costs, and US gas prices hitting a four-year high of $4.23/gallon. The Fed decision later today is expected to hold rates steady, but the oil shock is complicating the inflation outlook. Separately, Kevin Warsh's nomination to lead the Fed cleared the Senate Banking Committee 13-11, moving to a full Senate vote. In corporate news, NXP Semiconductors surged 26% on earnings beat, Seagate hit an all-time high on AI demand, and Starbucks reported strong results with traffic at a three-year high. The MAG7 earnings are all due after the bell today, with expectations high for Alphabet, Amazon, Meta, and Microsoft.