The US-Iran conflict intensified overnight as Trump launched “Project Freedom” to escort vessels through Hormuz, triggering Iranian missile fire on US destroyers and a drone strike on the UAE’s Fujairah oil port. US Central Command said it successfully guided two American-flagged ships through the strait while repelling attacks and destroying small boats. The S&P 500 fell 0.4% to 7,201.75 with all 11 sectors except energy in the red, the Dow dropped 1.1% to 48,941.90, and the Nasdaq slipped 0.2% to 25,067.80. Brent crude surged 5.4% to $114.03 while WTI jumped 3.3% to $105.26. Bond yields spiked sharply — 10-year Treasuries +7bp to 4.44%, 30-year yields above 5% for the first time since July. Gold fell 2.1% to $4,517.21. In a stunning escalation, China ordered its companies to defy US sanctions on Iranian-linked refiners, issuing an unprecedented blocking order ahead of the Trump–Xi summit. Morgan Stanley raised hyperscaler AI capex forecasts to $800 billion for 2026 and $1.1 trillion for 2027. Q1 earnings growth has doubled to 27.8% from 14.4% at the start of April. ASX 200 futures fell 70 points to 8,645, with the RBA expected to hike 25bp to 4.35% at 2:30pm AEST.

Key Takeaways

01 The S&P 500 fell 0.4% to 7,201.75, the Dow dropped 1.1% to 48,941.90, and the Nasdaq slipped 0.2% to 25,067.80 as all sectors except energy declined, while KOSPI surged 5% in Asia and Bitcoin briefly reclaimed $80,000.

02 Trump’s “Project Freedom” drew Iranian missile fire on US destroyers, a drone strike on the UAE’s Fujairah oil hub (three injuries), and US forces destroyed seven Iranian small boats — two US merchant ships transited the strait successfully.

03 Brent crude surged 5.4% to $114.03 and WTI jumped 3.3% to $105.26, while 30-year Treasury yields breached 5% for the first time since July, 10-year yields rose 7bp to 4.44%, and gold fell 2.1% to $4,517.21.

04 China issued an unprecedented blocking order telling companies to defy US sanctions on Iranian-linked refiners including Hengli Petrochemical, escalating the US–China confrontation weeks before the Trump–Xi summit.

05 Morgan Stanley raised hyperscaler AI capex forecasts to $800B for 2026 and $1.1T for 2027; Q1 S&P 500 earnings growth has nearly doubled to 27.8% — the highest since late 2021 — while Palantir guided for 71% full-year revenue growth.

06 ASX 200 futures fell 70 points to 8,645, with the RBA expected to deliver a third consecutive 25bp hike to 4.35% at 2:30pm AEST, and Westpac results, AMD earnings and April US non-farm payrolls due this week.