WS #6265

The dominant narrative remains the Iran war and its escalating economic impact. Oil prices have surged to a four-year high above $126/bbl after President Trump signaled the blockade of Iranian ports could last months and is being briefed on new military strike options. This is corroborated by multiple sources (MarketWatch, Axios, WSJ, AFP). The euro zone economy barely grew (0.1% QoQ) in Q1, while euro zone inflation jumped to 3.0% in April, driven by energy costs. The yen weakened past 160 to the dollar, prompting Japan's finance minister to issue a verbal intervention warning. These macro shocks are creating clear winners and losers: energy stocks (XOM, CVX) benefit, while airlines (DAL, UAL) and consumer sectors face headwinds. Qualcomm (QCOM) surged over 10% on better-than-expected Q2 results, a positive signal in the tech sector. Meta (META) shares fell ~8% pre-market after raising 2026 CapEx guidance to $125-145B, with CEO Zuckerberg unable to clearly articulate ROI, echoing the metaverse-era skepticism. Alphabet (GOOGL) reported strong Q1 with cloud revenue growing 50%, beating expectations. The Fed held rates steady at 3.5-3.75% with a deeply divided 8-4 vote, and Powell indicated he plans to stay on after his term ends. The ECB is expected to hold rates today but signal potential hikes. The Iran war narrative is ESCALATING, with no de-escalation signals and new military planning underway. The counter-signal of a potential ceasefire or diplomatic breakthrough is absent. The key development to watch is the Trump briefing on Iran strike plans, which could trigger further oil price spikes and risk-off moves.