WS #8914

The dominant narrative remains the Iran-US conflict escalation, which is now clearly ESCALATING. Fresh Iranian missile strikes on Kuwait International Airport and Bahrain, retaliating for a US airstrike on Qeshm Island, have caused at least 63 injuries in Kuwait. This directly threatens the Strait of Hormuz and has pushed oil prices higher for a third day. Trump's statement that he expects to meet Iran's Supreme Leader and that Iran has agreed not to develop a nuclear weapon introduces a potential diplomatic off-ramp, but the immediate military action overshadows this. Separately, Ukrainian drone strikes hit the St. Petersburg oil terminal on the opening day of Russia's economic forum, and a Russian warship in Kronstadt, escalating the Ukraine-Russia conflict and adding to energy supply concerns. SpaceX is targeting a fixed $135 IPO price at a $1.75 trillion valuation, with a Nasdaq debut on June 12, which is a major positive for the IPO market and tech sentiment. Alphabet (GOOGL) is conducting a $40B at-the-market equity issuance to fund AI spending, creating persistent selling pressure. Meta (META) is up on the rollout of its AI Business Agent to Instagram, expanding non-ad revenue. Citigroup raised IBM's price target to $375 from $285. European markets closed lower across the board, with the DAX down 1.24%, reflecting risk-off sentiment. The BOJ's 'Highlights of the Outlook' noted Japan's economy is likely to maintain moderate growth but at a decelerated rate due to rising crude oil prices from the Middle East situation, with CPI inflation expected in the 2.5-3.0% range in fiscal 2026.