What happened
Iran has threatened to 'punish the aggressor' after the United States launched a wave of retaliatory airstrikes against Tehran, escalating tensions in the Middle East. The Iran Revolutionary Guard Corps (IRGC) stated it would retaliate 'today,' also warning Gulf nations supporting Washington would face a 'harsh response,' according to Iranian state media.
Why it matters for the market
The U.S. military conducted two hours of airstrikes late Wednesday in response to IRGC missile attacks on an American base in Jordan on Tuesday. The strikes marked a significant escalation, with the conflict also expanding into Egypt, where two ships near the Suez Canal caught fire after drones believed to be Iranian struck the area.
President Trump warned that the U.S. would 'beat the f---ing s--- out of' Iran and said it was the military's 'turn' to strike. The remarks came amid growing frustration over the six-month war, which has cost an estimated $37.5 billion and led to the deaths of 18 U.S. troops. Despite the escalating conflict, Senate Republicans blocked a resolution directing the withdrawal of U.S. troops from hostilities against Tehran.
What traders should watch
The expanding conflict has raised fears of a broader regional war, with global energy prices already impacted by Iran's closure of the Strait of Hormuz. The situation remains volatile as both sides continue to trade strikes, and the risk of further escalation remains high, potentially affecting market risk appetite and commodity prices.
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