Ceasefire Frays, Crude Rebounds — Stagflation Hardens
Iran struck two tankers in the Strait of Hormuz Friday, reversing the week's crude slide — WTI bounced ~1% to $84.67 (Brent $90.12), and the sub-$80 break ORION was waiting on never arrived. The stagflation residue is hardening beneath a green tape: the 10Y pushed to 4.75%, futures now price ~63% odds of a September Fed hike, and the gold complex kept bleeding (GLD −1.5%, GDX −3.5%). Under the surface, AI leadership narrowed back to NVDA (+2.9%, new $200 handle) as the broad semis complex faded hard off session highs.
Regime Context
Friday re-armed the regime's governing binary — the ceasefire-hold path that looked benign 48 hours ago is fraying at the Strait of Hormuz — while the stagflationary core (sticky rates, an elevated energy baseline, receding cut odds) intensifies rather than unwinds.
Key Signals
- Hormuz binary re-armed: WTI rebounded ~1% to $84.67 Friday (Brent $90.12) after Iran attacked two tankers transiting the Strait of Hormuz — erasing the sub-$80 break ORION had set as its trim-confirmation trigger. Crude still finished the week down >5%, but the geopolitical bid is back and the $70 late-June baseline is a distant floor.
- Rates harden, a hike back on the table: 10Y closed 4.75% (up from 4.67% on 07-30), 2Y 4.28%; fed funds futures price ~63% odds of a 25bp September hike, with Kashkari, Hammack, and Logan all flagging upside inflation risk. Duration-underweight and long-USD (UUP $28.17, +0.1%) reaffirmed.
- Haven unwind meets narrowing AI leadership: GLD $371.54 (−1.5%) and GDX $74.10 (−3.5%) extended the tactical haven bleed off the $377 reclassification level, while NVDA $200.75 (+2.9%) broke $200 and led — as SMH ($540.53, +0.3%, vs a 561.4 intraday high) and AVGO ($389.28, +0.4%) both reversed ~3–4% off session peaks. Leadership is re-concentrating in NVDA just as desks (Wells Fargo, Deutsche Bank) flag an AI-capex "reality check."