US President Donald Trump has formally notified Congress that hostilities with Iran have resumed, following defensive strikes carried out by American forces on July 7. The letter, disclosed by The New York Times, details Trump’s use of his authority as commander in chief to authorize these actions. The strikes targeted over 80 sites, including air defense systems and small boats of the Iranian Revolutionary Guard, in response to Iranian attacks on commercial vessels in the Strait of Hormuz. This development marks the end of a temporary ceasefire and significantly raises tensions between the US and Iran, with potential implications for regional stability and US domestic politics.

Key Takeaways

• Market activity suggests an increased probability of Iran implementing a full airspace closure by July 31, with current pricing at 26.5% YES.
• The formal notification of resumed hostilities appears consistent with scenarios where Iran might respond with further military measures, such as airspace closure.
• The possibility of the US officially declaring war on Iran remains low, with current market pricing at 5.5% YES by the end of the year.

What to Watch

The Civil Aviation Organization of Iran and Iranian State Television could play key roles in announcing any airspace closure, which would be a strong indicator of escalating military concerns. Observers should monitor US congressional responses, as debates over military authority could influence future actions. Additionally, watch for any further retaliatory strikes from Iran, which might impact market expectations around both airspace closure and broader military engagement scenarios.

Get live prediction-market analysis, powered by Vera. Sign up for Vera.