WS #6556

The dominant market narrative remains the US-Iran conflict in the Strait of Hormuz, which is ESCALATING with new clashes. Multiple sources (Al Jazeera, NBC, Al-Monitor, Pentagon) confirm an exchange of fire: US forces sank six Iranian small boats, Iran launched missiles at a UAE oil facility in Fujairah, and the Pentagon briefing on 'Project Freedom' aims to reopen the strait. However, Hegseth insists the ceasefire 'is not over' and the Pentagon says it continues despite the UAE attack, creating a counter-signal to full escalation. Oil prices remain elevated, with SocGen warning the market is too complacent about supply threats. Separately, Ukraine continues to strike Russian oil infrastructure, with confirmed hits on the Kirishi refinery (Leningrad region) and Tuapse refinery, causing over $300M in damage and oil spills into the Black Sea. This adds to supply-side pressure. In corporate news, Palantir (PLTR) reported strong Q1 earnings but shares slipped in premarket, while DigitalOcean (DOCN) surged 18% on a Q1 beat and raised FY26 guidance. Backblaze (BLZE) surged 51% on strong Q1 results and AI customer growth. PayPal (PYPL) announced $1.5B in cost savings via AI but CFO warned of Q2 pressure, sending shares down 10%. Ferrari CEO stated no abnormal order cancellations and flat Middle East deliveries, a positive signal for luxury demand. Amazon (AMZN) rolled out its new Supply Chain Service, directly competing with UPS and FedEx, whose shares fell. The MAG7 narrative shows mixed signals: GOOGL is cited as 'on fire' with strong Q1 earnings, while NVDA's gross margin declined. TSLA's breakout is still considered valid. The overall market narrative is that US stock futures climbed as the ceasefire appeared to hold, but the rally is narrow and reminiscent of the dot-com bubble, per Bloomberg.