Tensions between the U.S. and Iran escalated again as American forces launched strikes on Iranian military targets near the Strait of Hormuz, with Tehran promptly vowing retaliation. Explosions were reported over Aqaba, Jordan, amid Iran’s claims of striking American assets in response. This fresh bout of hostilities pushed Brent crude prices above $94 a barrel and WTI futures to their highest level since July, signaling market concerns over potential disruptions in oil flow through the strategic Gulf waterway.

The renewed conflict has rattled global financial markets, contributing to a sell-off in bonds and driving yields to multi-decade highs in key economies including the U.S., Japan, and the U.K. The U.S. 10-year Treasury yield surged to 4.80%, reflecting inflation worries tied to the Middle East instability. Meanwhile, Federal Reserve officials like Governor Michael Barr reiterated their readiness to implement further interest rate increases if inflation pressures fail to subside, with markets factoring in a likely quarter-point hike this month.

At the Shanghai Cooperation Organization summit in Kyrgyzstan, Russian President Vladimir Putin expressed support for Iran, condemning U.S. strikes and Western sanctions. Alongside leaders from China and India, Putin criticized the military actions targeting Iran, highlighting civilian casualties and economic damage. This alignment signals deepening geopolitical divides, complicating efforts to de-escalate the situation in the Gulf region.

On a different front, Canadian Prime Minister Mark Carney sharply criticized the Trump administration's trade tactics, accusing officials of prioritizing social media jabs over substantive negotiations. His remarks followed President Trump’s controversial executive order renaming Lake Ontario to “Lake America” for federal usage, adding strain to U.S.-Canada relations. Carney emphasized Canada’s willingness to pursue mutually beneficial trade agreements despite ongoing tensions.