WS #8903

The dominant theme remains the Iran-US conflict, which is ESCALATING with new corroborated reports of IRGC strikes on US bases in Kuwait and Bahrain, including Fifth Fleet HQ. Iran has suspended ceasefire talks with the US over Israeli operations in Southern Lebanon, further raising tensions. Oil prices remain elevated with WTI near $96 and Brent near $98. A key counter-signal emerged: Iraq's PM ordered the resumption of oil operations in Kurdistan starting Thursday, which could add supply and partially offset the Strait of Hormuz blockade. On the Ukraine front, Ukrainian drone strikes hit an oil terminal in St. Petersburg as the Putin economic forum opened, and Zelenskiy signaled readiness to escalate retaliatory strikes. However, Zelenskiy also said he will attend the NATO summit in Ankara, and there were reports of a potential Israel-Lebanon meeting. On the macro side, Fed's Williams indicated no obvious argument to change rates now, but noted upside risks to inflation from energy and tariffs. ISM Services PMI beat expectations at 54.5%, and US companies added the most jobs since January 2025. In tech, Alphabet upsized its equity offering to $85B for AI spending, Meta launched Business Agent AI tools lifting shares, and Microsoft-OpenAI breakup details emerged with Microsoft aiming to become a top-4 AI lab. Macy's lifted outlook as sales rose. The US announced new tariffs of 10-12.5% on dozens of countries over forced labour concerns, which could weigh on trade-sensitive sectors.