$100 oil, PCE data, MLB valuations and more in Morning Squawk

• Brent crude climbed 9.22% to close above $100 per barrel; U.S. plans naval escorts for tankers through the Strait of Hormuz 'as soon as militarily possible', potentially with an international coalition
• Fed rate cut expectations slashed from two to three cuts this year down to only one expected in December, as energy price surge raises inflation concerns ahead of Friday's PCE data release
• Adobe CEO Shantanu Narayen announced he will step down once a successor is named, while Adobe shares fell over 7% in premarket trading despite beating Q1 earnings expectations with 12% revenue growth

Market Summary: Oil Surge, Fed Rate Outlook, and Corporate Developments

Key Market Movements:

Brent crude surged 9.22% to close above $100/barrel for the first time since 2022 after Iran's supreme leader threatened to close the Strait of Hormuz. The Dow Jones fell over 700 points, dropping below 47,000 for the first time this year. All major indexes are tracking toward weekly losses.

Geopolitical Developments:

The Trump administration is pursuing new trade probes focused on forced labor practices. Treasury Secretary Scott Bessent announced the U.S. would sanction countries purchasing Russian oil already at sea. The U.S. Navy plans to escort oil tankers through the Strait of Hormuz "as soon as militarily possible," potentially with international coalition support. Five U.S. military personnel died in a non-hostile aircraft crash in western Iraq.

Federal Reserve Outlook:

Expectations for rate cuts have diminished dramatically. Fed futures traders now anticipate only one quarter-point cut in December, down from earlier projections of two-to-three cuts in 2026. The Fed's next decision is March 18. January's PCE inflation data releases at 8:30 AM ET, with economists expecting 0.3% monthly and 2.9% annual increases.

Corporate News:

Adobe (ADBE) shares dropped 7% in premarket trading after CEO Shantanu Narayen announced plans to step down once a successor is named, despite beating Q1 earnings expectations with 12% revenue growth. Microsoft's Office chief announced retirement after 35 years.

Other Developments:

OpenAI CEO Sam Altman met lawmakers regarding Pentagon contracts and AI warfare guardrails. The Yankees remain baseball's most valuable franchise at $9 billion, with the Dodgers valued at $8 billion.