Tel Aviv hit as Iran fires waves of missiles at Israel

Multiple waves of missiles were launched by Iran at Israel, with Tel Aviv hit, marking a material escalation in regional hostilities. U.S. President Trump postponed a threat to strike Iran's power grid, citing 'productive talks' with Iranian officials, which lowered the immediate risk of U.S.-Iran kinetic escalation. Expect near-term risk-off market moves, potential upward pressure on regional risk premia and energy/defense sector volatility, and heightened broader market volatility.

Analysis

Multiple waves of missiles were launched by Iran at Israel, with Tel Aviv hit, marking a material escalation in regional hostilities. U.S. President Trump postponed a threat to strike Iran's power grid, citing 'productive talks' with Iranian officials, which lowered the immediate risk of U.S.-Iran kinetic escalation. Expect near-term risk-off market moves, potential upward pressure on regional risk premia and energy/defense sector volatility, and heightened broader market volatility.