Some in the US Pentagon, and among some members of the Trump administration, have a deepening concern that the Iran conflict could spiral out of control, Politico reports

• ‘The mood here is intense and paranoid,’ one person said.
• There is anxiety among senior leaders that the fighting will extend for weeks, further stressing limited US air defence stockpiles

The reports of increasing concern within the Pentagon and Trump administration about the Iran conflict suggest a potential escalation that could affect market sentiment. Heightened geopolitical tensions often lead to risk-off behavior, pushing traders towards safe havens like gold and the USD, while negatively impacting equities and energy prices. If this situation unfolds, watch for volatility in commodity markets and potential flight to safety across currencies.