US-Iran Tensions Escalate After Attacks

The US has announced that it conducted airstrikes in response to attacks on commercial ships in the Strait of Hormuz. This development has increased concerns that a full-scale war may break out in the Middle East. Donald Trump stated at the NATO Summit in Ankara that the agreement signed with Iran has 'come to an end'. Trump expressed that he might allow peace talks to continue for some time, but he believes these negotiations are a 'waste of time'. Following Trump's statements, the price of Brent oil rose by 6% to $78 per barrel. European stock markets declined by 1.6%, while the dollar gained value and government bond yields increased. Investors have begun to factor in the potential effects of escalating conflicts on inflation. The Iranian Revolutionary Guard Corps announced that it retaliated against US attacks by targeting American assets in neighboring countries. On Wednesday morning, sirens sounded in Bahrain and Kuwait, and the Revolutionary Guard also reported that one of its members was killed by 'enemy drones'.