WS #6313

The dominant narrative remains the escalating Iran conflict, now at a critical inflection point. The US has formally terminated Iran military operations under War Powers Act requirements, but President Trump has signaled a possible return to war, stating 'we might need' to restart operations. Iran's Supreme Leader has threatened that 'the only place for Americans in the Persian Gulf is at the bottom of the waters,' while Iran warns of 'long and painful strikes' if attacks resume. The Strait of Hormuz blockade continues, with Goldman Sachs warning Europe could run out of jet fuel by year-end if the strait doesn't reopen by June. Brent crude remains above $110/bbl, and US PCE inflation hit 3.5% in March, the highest since May 2023, reinforcing expectations that the Fed will keep rates higher for longer. Counter-signals include Trump approving a major transborder pipeline (Bridger Pipeline Expansion) to boost energy security, and the IEA's warning on jet fuel shortages being somewhat offset by Ryanair's CEO stating Europe may dodge a jet fuel crisis in May. On earnings, Apple reported a record Q2 with revenue up 17% and iPhone sales up 22%, with shares rising slightly in after-hours trading. Reddit also beat estimates with a 69% revenue jump. However, Meta's stock fell after hours despite beating estimates, as investors focused on rising capex guidance and lack of a clear AI monetization path. The narrative is ESCALATING on the Iran war front, with the administration's legal maneuver and Trump's ambiguous stance adding uncertainty, while tech earnings provide a STABLE but increasingly fragile counterweight as oil prices remain elevated.