WS #14093

The Middle East crisis remains the dominant market driver, with the Strait of Hormuz blockade intensifying. Iran used underwater drones for the first time in an attack on two UAE ADNOC oil tankers, and Houthi drone strikes hit Saudi Aramco's Jizan refinery. Crude flows through the strait have dwindled to near zero, with only two vessels transiting on Friday, and the US has vowed 'unprecedented' sanctions on Iran next week. Oil prices are rising (Brent $88.50, WTI $82.81), pushing energy stocks higher while pressuring airlines. The US Navy deployment is described as 'not nearly long enough' by Trump, indicating no de-escalation. This is corroborated by multiple sources including AP, Reuters, and financial news outlets. The 30-year Treasury yield has risen to 5.269%, and the 2s10s curve is steepening, reflecting supply concerns and AI-driven competition for capital. Retail sales fell 0.6% in July, missing expectations, which is weighing on consumer discretionary stocks. In tech, Apple has trained its own LLM for China with Alibaba's help, a departure from relying on third-party models, which could impact AAPL and its China strategy. Tiger Global's Q2 13F shows significant moves: new stakes in Cerebras, Intel, and AMD, while cutting NVDA, MSFT, META, and Broadcom, suggesting a rotation within AI/semis. SpaceX completed its $60B acquisition of Cursor, and Nvidia's $500B AI financing plan is gaining Wall Street backing, with Goldman, Blackstone, Apollo, KKR, BlackRock, and Brookfield involved. The macro narrative is stable-to-escalating on Middle East tensions, with no de-escalation signals.