The global market has been plunged into chaos after the United States launched a wave of strikes against targets belonging to the Islamic Revolutionary Guard Corps (IRGC) near the Strait of Hormuz. The attacks have sent shockwaves across the world, with risk assets taking a hit and investors scrambling for safety.

The US dollar has strengthened against most G10 currencies, while the 2-year Treasury yield has risen by roughly 4 basis points. The S&P 500 has also taken a hit, falling to session lows. The Dow Jones Industrial Average and the Nasdaq Composite have also seen significant declines, with the former down over 100 points and the latter off by around 2%.

The IRGC is a powerful military and political force in Iran, and the US has been at odds with it for years. The latest strikes come after a series of escalating tensions between the two countries, including the US withdrawal from the Iran nuclear deal and the re-imposition of sanctions on Tehran.

The market reaction to the strikes is not surprising, given the high stakes involved. The Strait of Hormuz is a critical shipping lane for global oil supplies, and any disruption to its flow could have far-reaching consequences for the global economy. Additionally, the US-Iran conflict has already had significant ramifications for investor sentiment, with many analysts warning of a potential wider conflict in the region.

Investors are understandably nervous about the situation, and risk assets are likely to remain under pressure until there is some form of resolution. However, it’s worth noting that the US has a history of using military force in the Middle East, and while the current situation is highly concerning, it may not necessarily lead to a broader conflict.

The situation will continue to be closely watched by investors and policymakers alike, with any developments likely to have significant implications for financial markets. In the meantime, investors are advised to remain cautious and diversify their portfolios in case of further market volatility.