WS #8912

The dominant market narrative remains the escalating Iran-US conflict, which is ESCALATING. Multiple corroborating signals confirm a significant escalation: Trump stated Iran has agreed not to develop a nuclear weapon, but this is contradicted by Iranian Revolutionary Guards claiming they struck a US-owned commercial vessel, and a drone attack on Kuwait's airport. Ukraine struck a Russian warship in Kronstadt and an oil terminal in St. Petersburg on the opening day of Putin's economic forum, with NATO chief Rutte backing Ukraine's right to strike such targets. Oil rose for a third day (WTI +1.55%, Brent +1.40%) as fresh strikes cast doubt on a peace deal reopening the Strait of Hormuz. Vitol warned gasoline could be the next fuel to face a supply crunch. The Bank of England warned that continued Strait of Hormuz disruption could push inflation above 6%. South Korea locked in Canadian crude/LNG supply deals to diversify away from Middle East supply. Walmart's CEO cited high fuel prices as a 'stress point', linking the oil shock to consumer spending. Private credit stress is highlighted by Ares Management being owed $547M after Textor's Eagle Football collapse and a Bloomberg report warning of a 'pipeline of defaults'. Separately, Alphabet's upsized $85B equity offering (priced at ~$355) is a major capital markets event, diluting existing shareholders but funding AI capex. Google's Gemini surpassed 900 million monthly active users. SpaceX IPO roadshow is set at $135/share, $1.75T valuation, which could drive tech/IPO sentiment. Intel's 18A production and Xeon 6+ launch at Computex 2026 is a positive signal for the semiconductor turnaround narrative. The Vanguard S&P 500 ETF became the first to surpass $1 trillion in assets. European markets closed lower (DAX -1.24%, CAC -0.71%).