WS #12011

The US-Iran conflict continues to escalate sharply, with multiple new developments in the last 30 minutes. The UAE Defence Ministry confirmed that two national tankers were struck by Iranian cruise missiles in the southern Strait of Hormuz, killing one Indian crew member and injuring eight others. Houthis announced a full air and naval blockade of Saudi Arabia and closure of the Bab el-Mandeb Strait, threatening ~60% of Middle East oil exports. Trump confirmed another major attack Monday night and stated the US is 'knocking out Iran's offensive capability' related to the Strait of Hormuz, while also announcing a 20% fee on cargo transiting the Strait. However, Trump also stated he thinks a deal with Iran is possible, per Reuters, which could act as a counter-signal. The RBNZ's Conway warned that Middle East conflict poses upside risks to inflation, suggesting further monetary tightening may be needed. Oil prices surged (WTI +9.42%, Brent +9.39%). Stock futures are little changed as traders await major bank earnings (JPM, GS, BAC, C, WFC) due Tuesday before the bell. The dominant theme is the US-Iran conflict, which is ESCALATING, but with a potential counter-signal from Trump's deal comments.