US and Israel Launch Heaviest Strikes Yet on Iran as Markets Predict War Conclusion

Eleven days into the most consequential military operation in the Middle East since the 2003 invasion of Iraq, the United States and Israel are escalating their joint air campaign against Iran to unprecedented levels — even as financial markets, buoyed by President Donald Trump's assurances of a quick resolution, are pricing in an imminent end to hostilities. The dissonance between the battlefield and the trading floor captures the extraordinary uncertainty of a conflict that has already reshaped the geopolitical order of the Middle East.

The Opening Salvo: February 28 and the Death of a Supreme Leader

On February 28, 2026, U.S. and Israeli forces launched nearly 900 airstrikes in a 12-hour blitz targeting Iranian missile sites, air defenses, military infrastructure, and — most consequentially — the compound known as Leadership House in Tehran [1]. The opening attack killed Ayatollah Ali Khamenei, Iran's supreme leader of 37 years, along with more than 40 senior Iranian military and security officials, including the IRGC Commander, the Defense Minister, and the Armed Forces Chief of Staff [4].

The operation, codenamed "Epic Fury" by U.S. Central Command and "Roaring Lion" by the Israel Defense Forces, represented the culmination of months of deteriorating relations between Washington, Tel Aviv, and Tehran. According to a detailed timeline published by the UK House of Commons Library, indirect nuclear negotiations between Iran and the United States had been underway as recently as February 2026 when the strikes were launched — a fact Iranian officials have cited as evidence of American duplicity [5].

The scale of the first wave was staggering: more than 2,000 munitions launched from air, land, and sea platforms in the initial hours [8]. By March 10, CENTCOM reported that U.S. forces alone had struck more than 5,000 targets inside Iran [1].

The 'Most Intense Day': Escalation on Day 11

On March 10, Defense Secretary Pete Hegseth announced that the military would deliver its "most intense day of strikes inside Iran" to date, deploying "the most fighters, the most bombers, the most strikes" since the operation began [6]. Hegseth, speaking from CENTCOM headquarters in Tampa, framed the escalation as part of a systematic campaign to "raze" Iran's ballistic missile industry and "permanently deny Iran nuclear weapons forever" [8].

"This is not Iraq. This is not endless," Hegseth told reporters, pushing back against comparisons to the protracted conflicts of the past two decades [8]. He emphasized that the U.S. has "no shortage of munitions" and can "sustain the fight for as long as it takes."

The objectives, as articulated by U.S. officials, center on three pillars: neutralizing Tehran's missile capabilities, destroying its navy, and eliminating its nuclear weapons program [8]. But the breadth of targeting has drawn scrutiny, with strikes hitting not only military installations but also fuel depots, government buildings, and infrastructure across cities including Tehran, Isfahan, Qom, Karaj, and Kermanshah [4].

Iran's Retaliation and the Strait of Hormuz Crisis

Iran's response has been far from passive. By March 5, Iranian forces had launched over 500 ballistic and naval missiles and nearly 2,000 drones, with approximately 40% directed at Israel and 60% aimed at U.S. targets in the region, according to Iran's Fars News Agency [4]. The Islamic Revolutionary Guard Corps struck targets in the United Arab Emirates, and at least 13 people were killed in Israel and 17 in Gulf states from retaliatory strikes [1].

But the most economically devastating Iranian response has been the effective closure of the Strait of Hormuz, the narrow waterway through which roughly 20 million barrels of oil — about 20% of global seaborne oil trade — transit daily [10]. The IRGC issued warnings prohibiting vessel passage through the strait, and subsequent attacks on at least 10 vessels killed seven seafarers, according to the International Maritime Organization [10]. Tanker traffic through the strait dropped by approximately 70% within days, and soon effectively ceased [10].

Source: FRED / U.S. Energy Information Administration

Data as of Mar 11, 2026CSV

The consequences rippled through global energy markets. Brent crude surged from around $70 per barrel before the conflict to nearly $120 at its peak on March 8, a gain of roughly 70% [9]. WTI crude saw similar volatility, spiking to $113.30 per barrel — a 24.6% surge in a single session [9].

Markets Whipsaw: Betting on a Quick End

Then came the reversal. On March 10, oil prices plunged dramatically — U.S. crude fell 11.94% to close at $83.45, while Brent dropped 11.28% to $87.80 — in what Bloomberg described as the biggest single-day decline since March 2022 [11]. The catalyst was a confluence of factors: Trump's assurances that the war would end "very soon," reports of potential G-7 strategic oil reserve releases, and — briefly — a since-deleted social media post by Energy Secretary Chris Wright claiming the U.S. Navy had escorted an oil tanker through the Strait of Hormuz [11].

The escort claim proved false. "The U.S. Navy has not escorted a tanker or a vessel at this time," White House Press Secretary Karoline Leavitt clarified [11]. But the episode illustrated how markets are grasping at any signal that the disruption to global oil flows might be temporary.

Source: FRED / S&P Dow Jones Indices

Data as of Mar 11, 2026CSV

Stock markets have been similarly volatile. The Dow Jones Industrial Average shed 785 points on March 5 after briefly falling more than 1,100 points [9]. South Korea's KOSPI index suffered its worst crash since the 2008 financial crisis, dropping 12% in a single day and triggering a circuit breaker [9]. Japan's Nikkei 225 plunged more than 5% as the conflict threatened economies dependent on Middle Eastern oil and gas imports [9].

Despite the carnage, a partial recovery emerged in the latter half of the week as markets began to absorb Trump's rhetoric about a swift conclusion. The S&P 500, which had fallen from its pre-war level of roughly 6,880 to a low of 6,740, edged back to 6,781 by March 10 — still below its February 27 close but showing signs of stabilization [14].

Trump's 'Little Excursion': Rhetoric vs. Reality

President Trump's characterization of the conflict has evolved from triumphalism to attempted reassurance. In remarks to Republican lawmakers on March 9, he described the military campaign as "a little excursion ... to get rid of some evil," predicting that hostilities would end "pretty quickly" [2]. He claimed the U.S. military had already destroyed roughly "80 percent" of Iran's missile launchers, reducing its capabilities to a "trickle" [2].

But Trump simultaneously left the door open to dramatic escalation. "If Iran does anything that stops the flow of oil within the Strait of Hormuz, they will be hit by the United States of America 20 times harder than they have been hit thus far," he warned [2]. NBC News reported that Trump "gives no timeline" for ending the conflict, calling it a "short-term excursion" while refusing to commit to specific dates [3].

The contradiction has not gone unnoticed. As NBC News observed, Trump "says Iran war will end 'soon' but also issues threats that could prolong it" [3]. His refusal to specify conditions for a ceasefire or withdrawal, combined with a stated goal of regime change, has raised questions about what "soon" actually means in operational terms.

The Humanitarian Toll

Behind the market gyrations and political rhetoric, a humanitarian crisis is unfolding. As of March 9, Iranian authorities reported 1,255 people killed in U.S.-Israeli strikes, describing the majority as civilians [13]. The U.S.-based Human Rights Activists News Agency (HRANA) documented more than 1,000 civilian deaths in the first five days alone, including 181 children under the age of ten [13].

The single deadliest incident occurred on the first day of the war: a missile struck a girls' school adjacent to a naval base in Minab, near Bandar Abbas, killing approximately 165 people — around 150 of them schoolchildren [4]. Amnesty International has issued urgent calls for the protection of civilians and adherence to international law [13].

The healthcare system is buckling under the strain. The Medical Council of Iran reports that 77 healthcare facilities have been affected, with 29 clinical facilities damaged, 10 rendered inactive, and patients being evacuated from seven others [13]. At least 11 healthcare workers have been killed and 55 wounded. The Gandhi Hospital in northern Tehran was reportedly struck by Israeli forces, further degrading a system already strained by years of U.S. sanctions that restricted access to medicines and medical equipment [13].

The Iranian Red Crescent Society reported that over 6,668 civilian structures and nearly 20,000 civilian buildings — including at least 16,000 residential units — have been affected after 11 days of war [1][13].

Iran's New Supreme Leader and the Question of Negotiations

On March 8, Iran's Assembly of Experts named Mojtaba Khamenei, the 56-year-old son of the slain supreme leader, as Iran's third supreme leader [15]. The selection reportedly came under heavy pressure from the IRGC, which conducted "repeated contacts and psychological and political pressure" on assembly members [15]. In a grim illustration of the conflict's reach, U.S. and Israeli bombs struck the Assembly of Experts office in Qom after votes had been cast but before the count was completed [15].

Mojtaba Khamenei is widely viewed as a hardliner with deep ties to the Revolutionary Guard. Trump declared the appointment "unacceptable," and Israel vowed to target the new supreme leader [15]. Russia's Vladimir Putin, by contrast, pledged "unwavering" support [15].

Iran has categorically rejected ceasefire negotiations. Foreign Minister Abbas Araghchi stated his country is "not asking for a ceasefire" and sees "no reason why we should negotiate" [5]. Iran's speaker of parliament, Mohammad Bagher Ghalibaf, echoed the stance: "Certainly we aren't seeking a ceasefire" [5]. Iranian officials have pointed to what they describe as a pattern of American betrayal — noting that indirect nuclear talks were underway when the U.S. attacked in both June 2025 and again in February 2026 [5].

Deputy Foreign Minister Kazem Gharibabadi has articulated one precondition: that "no further aggression be launched" before any talks can begin — a demand that is, under current circumstances, effectively a non-starter [5].

International Response: Condemnation Without Intervention

The UN Security Council convened an emergency session at the request of Russia and China, where the UN Secretary-General condemned the strikes [7]. China characterized the assassination of Khamenei as "a grave violation of Iran's sovereignty" that "tramples on the purposes and principles of the UN Charter" [7]. Russia called it "a pre-planned and unprovoked act of armed aggression against a sovereign and independent U.N. member state" [7].

But the condemnations have been conspicuously decoupled from any promise of military support. Despite sharp rhetoric, neither Russia nor China has indicated willingness to intervene on Iran's behalf [7]. As Al Jazeera reported in a March 5 analysis headlined "Where are Iran's allies?", Moscow and Beijing are "keeping their distance" from direct involvement [7].

Western responses have been more supportive of the U.S.-Israeli operation. Canada, Australia, and Ukraine expressed backing for the strikes, while the EU called for restraint and respect for international law without explicitly condemning the action [7].

Domestic Dissent

At home, the war faces significant opposition. A Quinnipiac poll taken in January 2026 found that 70% of American voters opposed military action against Iran [16]. Anti-war protests erupted in approximately 50 cities across the United States, with hundreds of demonstrators maintaining a vigil outside the White House since February 28 [16].

In Congress, the House voted on the Khanna-Massie War Powers Resolution on March 5, while a bipartisan Kaine-Paul Iran War Powers Resolution faced a discharge vote in the Senate [16]. Both efforts failed, primarily due to Republican opposition, though House Speaker Mike Johnson called the votes "dangerous" [16]. The Council on Foreign Relations subsequently published an analysis titled "Congress Declines to Demand a Say in the Iran War," highlighting what critics call a pattern of legislative abdication on war powers [16].

Six U.S. Army Reserve members have been killed in the conflict as of March 10, with at least eight total U.S. military deaths reported [8][1].

What Comes Next

The fundamental question — whether this conflict will indeed prove to be Trump's "short-term excursion" or metastasize into something far larger — remains unanswered. The market's tentative bet on a quick conclusion rests on thin foundations: Trump's word, the assumption that Hormuz traffic will resume, and hope that Iran's retaliatory capacity is genuinely degraded.

Against this, the stated U.S. objective of regime change, Iran's appointment of a hardline successor supreme leader, Tehran's categorical rejection of negotiations, and a humanitarian crisis that threatens to galvanize international opposition all point toward a potentially protracted conflict. The gap between a president calling this "a little excursion" and a Defense Secretary promising "the most intense day of strikes" yet underscores the tension at the heart of American strategy: an escalation ladder being climbed even as the end is declared near.