WS #6263

The dominant theme this cycle is the ESCALATION of the Iran war narrative, with oil prices surging past $125/bbl (Brent) on reports that the US is considering new military strikes against Iran, including potential deployment of hypersonic missiles. This is corroborated across multiple sources (Axios, Al Jazeera, Bloomberg, Reuters, BBC). The Strait of Hormuz remains effectively closed, and the US blockade continues. The UAE's exit from OPEC adds a structural shift to oil markets, weakening OPEC's grip. The Fed's hawkish hold (3 dissents, first since 1992) and Powell's final presser flagged rising inflation concerns, pushing yields higher and the dollar firmer. The yen breached 160, triggering intervention warnings from Japan's FinMin. European GDP data (Germany +0.3% q/q, Italy +0.2% q/q) were slightly above consensus but overshadowed by energy crisis. Big Tech earnings (Alphabet, Amazon, Meta, Microsoft) were strong, but Meta's stock fell ~7% on capex hike and user decline, while Alphabet surged 7% on cloud revenue. The oil spike is the primary market driver, repricing inflation expectations and central bank policy paths. Counter-signal: Zelenskiy proposed a long-term ceasefire for Ukraine, but this is a diplomatic shift, not a market-moving de-escalation yet. The Iran conflict remains the key risk.