TL;DR

Israel-Iran conflict escalates; oil surges, equities fall; U.S. assists Israel, safe havens bid.

Highlights

• Israel launched major airstrikes on Iranian nuclear and military sites, killing senior officers and scientists8.
• Iran retaliated with over 100 ballistic missiles targeting Tel Aviv, overwhelming some Israeli air defenses4.
• U.S. military forces are assisting Israel in intercepting Iranian missiles; two U.S. Navy destroyers deployed to the Eastern Mediterranean36.
• Airspace closures across Israel, Iran, Iraq, and Jordan forced mass flight cancellations and rerouting, disrupting Middle East aviation5.
• Oil prices surged sharply on fears of supply disruptions; equities fell as investors moved to safe havens (USD , Treasuries, gold )1.
• Israel threatened to strike Iranian oil and gas infrastructure if further missile attacks occur7.
• UK and Greece advised merchant vessels to avoid the Red Sea and register Hormuz transits, highlighting shipping risks18.
• Iran called for an emergency UN Security Council meeting, condemning Israeli strikes and pledging a response8.
• OPEC maintained no changes to oil supply policy, rejecting IEA calls for emergency stock releases10.
• U.S. consumer sentiment (University of Michigan) rose to 60.5, with 1-year inflation expectations dropping to 5.1%9.
• RH shares jumped nearly 20% after a revenue beat and successful tariff mitigation13.
• Draft U.S.-China rules may ease data and design barriers for Tesla and other autonomous vehicle makers12.

Commentary

Geopolitical risk dominated U.S. markets today as direct military exchanges between Israel and Iran escalated, drawing in U.S. military support and triggering a broad risk-off move23. The Israeli strikes on Iranian nuclear and military sites8, followed by Iran’s large-scale ballistic missile attack on Tel Aviv4, drove investors into safe-haven assets. Oil markets responded with a sharp rally on fears of energy supply disruptions, while equities came under pressure globally. The U.S. dollar, Treasuries, and gold saw increased demand as traders sought safety1.

The closure of Middle Eastern airspace and new advisories for commercial shipping—especially around the Strait of Hormuz—underscore the risk of broader supply chain and energy market disruptions518. Israel’s threat to target Iranian oil and gas infrastructure if attacks continue raises the stakes for potential direct impacts on global crude and LNG flows7. OPEC’s decision to hold steady on production, despite IEA calls for emergency measures, leaves markets highly sensitive to any further escalation or physical supply interruptions10.

Domestically, U.S. macro data offered a positive surprise: consumer sentiment rebounded and near-term inflation expectations fell sharply9. While this would normally support risk assets, the market’s focus remains on geopolitical developments. Select names like RH outperformed on strong earnings and tariff mitigation13, and regulatory moves in both the U.S. and China could accelerate autonomous vehicle deployment, benefiting Tesla and peers12.

Into the close, traders should monitor headlines for any signs of further escalation or diplomatic intervention in the Middle East. Energy, defense, and transport sectors remain most exposed to headline risk, while safe-haven flows are likely to persist absent de-escalation.