WS #9283

The Israel-Iran conflict has escalated dramatically overnight, with Israel launching air-launched ballistic missiles at Tehran, Tabriz, and Isfahan in the first strike on Iranian soil since the April ceasefire. Iran has responded by fully blocking both the Strait of Hormuz and the Bab el-Mandeb Strait, and the IRGC has threatened strikes on oil and gas infrastructure in Saudi Arabia, UAE, and Qatar. Iran's state media says it is ready for a 'long-term war.' Trump has called for an immediate halt to hostilities, but the situation is clearly escalating. Oil prices are surging, and European stocks are dropping on the escalation. Counter-signals include Abu Dhabi National Oil Co. selling bumper volumes of crude to Asia, which may partially offset supply fears, and the Kalshi prediction market putting only a 31% chance of Hormuz traffic normalizing by September 1. On the corporate side, Eli Lilly's next-generation weight-loss drug impressed in a late-stage trial, with stock jumping premarket. Honeywell reaffirmed 2026 guidance ahead of its aerospace spin-off but initiated lower EPS guidance for the remaining entity, causing the stock to fall. Marvell Technology surged 7% premarket on S&P 500 index inclusion. A leveraged ETF tied to SK Hynix surged 50% despite an 8% drop in the underlying stock due to a liquidity dislocation. The dominant narrative is ESCALATING: the Israel-Iran conflict is intensifying with direct strikes on Iranian soil and threats to Gulf energy infrastructure, driving oil prices sharply higher and risk-off sentiment across global markets.