In a significant escalation of the ongoing conflict with Iran, President Donald Trump has announced plans to target Iran’s power plants and bridges next week, with additional strikes scheduled for tomorrow night. Trump emphasized caution to minimize civilian casualties, despite the clear implications for civilian infrastructure. This announcement comes amid heightened tensions following the collapse of a ceasefire on July 7, 2026. The U.S. military, alongside Israel, has been actively targeting Iranian military assets, while Iran has launched retaliatory strikes on U.S. bases in Kuwait and Bahrain. The potential targeting of civilian infrastructure has drawn international criticism, with experts warning of possible violations of international law.

Key Takeaways

• Trump’s announcement appears to increase tensions, suggesting a less likely scenario for a US-Iran deal on reconstruction funding in 2026, with current market pricing at 26% YES.
• The reported plans for strikes on civilian infrastructure could indicate further escalation, consistent with a decrease in diplomatic resolutions, reflected in the low 1% YES odds for an upcoming meeting in the UAE.
• Market reactions suggest a lowered probability of any uranium enrichment cap being part of a 2026 US-Iran deal, with odds currently at 26% YES.

What to Watch

Observers will be closely monitoring any developments that could lead to de-escalation or further conflict. Key indicators include responses from Iranian officials and potential diplomatic interventions from mediators such as Qatar and Pakistan. Additionally, any statements from international bodies regarding the legality of the proposed strikes could influence market perceptions. Any unexpected shifts in military strategy or peace talks could significantly alter market probabilities.

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