US launches new strikes on Iran after Hormuz attacks, sparking escalation and market turmoil

U.S. forces began striking Islamic Revolutionary Guard Corps targets in Iran at noon ET on Tuesday, CENTCOM said, following attempted attacks on commercial shipping in the Strait of Hormuz and on U.S. personnel in the region . The command did not disclose the number or location of targets or the assets involved; a separate Al-Monitor report placed strikes near Bandar Abbas and Qeshm Island. Iran's state-run Tasnim News Agency said the armed forces had launched a "decisive operation" in response, and explosions were seen over the southern Jordanian city of Aqaba, though it was not immediately clear what caused them .

President Trump called the strikes "large and powerful" in a Truth Social post, framing them as retaliation for Iran's attempt to place sea mines in the Strait of Hormuz and for a missile attack on a U.S. base in Jordan, and warned Tehran would be hit "at a much harder and higher level" if it responded again . The exchange follows a weekend in which U.S. forces struck rocket launchers on Iran's Larak Island, Iran fired missiles at U.S. sites in Jordan that were intercepted, and the United Arab Emirates said it intercepted an Iranian drone over its territorial waters.

Markets read it as an inflation event rather than a pure risk-off one. The Financial Times reported that the escalation pushed oil prices higher and sent Treasury yields to the day's highs as investors weighed a fresh bout of inflation . That combination is the uncomfortable one for equity valuations, because an energy-led move in yields tightens financial conditions without the offsetting growth signal that usually accompanies rising rates.

The chokepoint is what gives the story its market weight. Before the war, roughly a fifth of global oil supplies moved through the Strait of Hormuz, according to the U.S. Energy Information Administration . Disruption there is not a regional supply question, it is a global one, and shipping and insurance markets tend to price the risk of closure well before any closure occurs. The U.S. Embassy in Qatar issued a security alert warning of potential "unforeseen escalation" and possible flight cancellations and airspace closures.

The economic track is running in parallel. At the G20 summit, Treasury Secretary Scott Bessent said the U.S. has support for an economic war against Iran, while facing pushback on the administration's trade policies at the same gathering . The political backdrop is not comfortable: Trump's approval sits at 33% and just 36% of Americans approve of the Iran war, according to a Reuters/Ipsos poll released Monday . For markets the near-term questions are whether Iranian retaliation reaches shipping rather than military targets, whether tanker insurance rates move enough to reprice freight, and whether the yield move persists once the initial headline shock fades.

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