The U.S. military has begun “major combat operations” in Iran, President Donald Trump said on Saturday, as explosions were reported across parts of the Middle East.
“Our objective is to defend the American people by eliminating imminent threats from the Iranian regime, a vicious group of very hard, terrible people,” Trump said in a video message posted on Truth Social.
A U.S. official confirmed that American forces carried out strikes by air and sea, according to Reuters. Iranian officials said several ministries in the southern part of Tehran were targeted. Explosions were also heard in Jerusalem after Iran launched counterattacks.
Earlier on Saturday, Israel conducted a daylight strike on Iran’s capital, with smoke seen rising over downtown Tehran. Trump said Iran had continued pursuing nuclear weapons despite negotiations aimed at curbing its program.
“[In] operation midnight hammer last June, we obliterated the regime’s nuclear program at Fordow nets. And Isfahan. After that attack, we warned them never to resume their malicious pursuit of nuclear weapons, and we sought repeatedly to make a deal,” Trump said. “But Iran refused.”
He added that Iran had attempted to rebuild its nuclear program and develop long-range missiles capable of threatening U.S. allies and forces abroad.
Limited market impact
Keith Lerner, chief investment officer and chief market strategist at Truist Advisory Services, said investors were already navigating a complex backdrop before the latest escalation.
“As if AI disruption and renewed tariff uncertainty were not enough for investors to contend with, geopolitical tensions flared late in the month following a joint U.S.–Israel strike on Iran,” Lerner told Investing.com.
“Historically, such events have tended to have only short-term market impacts… That said, oil prices remain an important variable to monitor. Taken together, this backdrop points to elevated volatility—also consistent with a midterm election year.”
Michael Brown, senior strategist at Pepperstone, said crude prices were likely to gap higher when markets reopen, alongside gains in traditional havens such as gold, the yen, the Swiss franc and U.S. Treasuries.
Equities and higher-beta currencies could face pressure. He cautioned, however, that geopolitical shocks have rarely led to lasting moves in major asset classes once the initial reaction fades.
William Jackson, Chief Emerging Markets Economist at Capital Economics, said the broader economic impact would hinge on oil.
“Our estimates suggest that the political risk premium baked into the oil price has already risen substantially,” the firm said, adding that Brent Oil Futures could climb toward $80 per barrel even if strikes remain limited.
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