Context:

Coordinated strikes on Iran by the U.S. and Israel under Operation Epic Fury upend a postwar global order and spark immediate market jitters across asset classes. Equity indices in the Middle East came under pressure as trading resumed, while oil markets are expected to be volatile with Brent potentially exceeding $80 a barrel amid the closure of the Strait of Hormuz. The disruption extends to shipping and air travel, with multiple carriers rerouting and thousands of flights delayed or canceled, amplifying investor uncertainty. The episode also intersects with AI-focused debates after reports of Anthropic’s Claude being used in planning operations, underscoring how geopolitical shocks ripple into technology and defense sourcing. The outlook remains uncertain, with investors watching for known unknowns and policymakers’ next moves.

Dive Deeper:

• Stock markets in the Middle East opened with declines on Sunday, as Tadawul in Saudi Arabia and the Muscat index in Oman posted losses while several markets in the region did not open. Major regional indices including Dubai and Israel are set to resume trading, highlighting uneven initial responses to the strikes.

• Oil is at the center of volatility, with traders forecasting Brent crude above 80 dollars per barrel despite OPEC’s earlier output increase, and the Strait of Hormuz closure adding to supply risk and price pressure.

• Global shipping has been disrupted as carriers such as Maersk, MSC, and Hapag-Lloyd suspended transit through the Strait of Hormuz, with rerouting around Africa adding time and cost to shipments.

• Iran's Revolutionary Guard claimed to have struck several oil tankers in the Gulf in retaliation, underscoring regional escalation and ongoing uncertainty about when the strait might reopen.

• Air travel has been severely affected, with the Middle East region experiencing widespread airspace closures and more than 1,500 flights canceled and over 19,000 delayed globally, complicating travel and logistics.

• The tech angle emerged as a linkage between AI and military planning, with Axios reporting the use of Anthropic’s Claude in strike planning even as the Pentagon flags the company as a supply chain risk, illustrating cross-cutting concerns about AI in high-stakes operations.

• President Trump described U.S. operations as ahead of schedule, contributing to a market sense of unsettled timing and the need to navigate evolving policy and military developments.