The Biggest Market Concern as War Erupts
Author: Greg Valliere
June 13, 2025
THE MASSIVE ISRAELI ATTACK has decimated Iran’s uranium enrichment program and killed many top Iranian military officials and nuclear scientists. It has ignited a war that may last for weeks or months, with major concerns for the financial markets.
IRAN WILL RETALIATE AGGRESSIVELY AGAINST ISRAEL: The major market concern will be the Strait of Hormuz — 20 million barrels of oil a day pass within the narrow strait, roughly one-fifth of the world supply.
STILL ANOTHER ISSUE TO WATCH THIS WEEKEND is whether the Israelis took out the nuclear enrichment facilities in the mountains to the north and west and Tehran. The most crucial facility is at Fordow.
THIS MASSIVE STRIKE WAS INEVITABLE when it became clear that Iran wasn’t interested in serious negotiations on nuclear enrichment and transparent inspections. As Benjamin Netanyahu said this week, Iran has “taken steps that it has never taken before — steps to weaponize enriched uranium.”
THE OTHER CONCERN in Washington is whether the U.S. will get dragged into an all-out war. Probably not, we think, because Israel has lost political clout in both U.S. political parties. But there will be enormous pressure on the U.S. to sell “bunker busting” bombs to the Israelis.
THERE ARE 40,000 U.S. TROOPS stationed throughout the Mideast, and casualties could quickly anger the American public.
THIS IS A MAJOR CRISIS, more serious than Los Angeles, trade tariffs, the tax bill and the Ukraine war. The Israelis will prevail, at a huge cost. The U.S. eventually may have to get involved but like everything in the U.S. today, this will become an enormously divisive issue.
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