Epic Fury

Over the weekend, the United States and Israel launched Operation Epic Fury, which involved hundreds of U.S. and Israeli aircraft performing strikes on key military and nuclear sites. The military campaign was launched after negotiations between Washington and Tehran stalled over Iran’s nuclear program. On Saturday, the compound of Supreme Leader Ali Khamenei was targeted, and he was reportedly killed in the attacks. President Trump described the situation as a “major combat operation” in Iran, aimed at “eliminating threats from the Iranian regime.” He warned that “this regime will soon learn that no one should challenge the strength and might of the United States Armed Forces.”

The widening conflict has inflicted a toll on civilians, including more than 100 children reportedly killed in a strike on a girls’ school in southern Iran. The escalation has also thrown regional infrastructure into chaos, with closed airspace, suspended flights, and an attack on Dubai International Airport. More than 3,400 flights were cancelled Sunday across seven airports in the Middle East as Iranian drones struck some of the region’s most recognizable landmarks. Debris from intercepted drones hit one of the Etihad Towers in Abu Dhabi and the “seven-star” Burj Al Arab hotel in Dubai, where the lower portion of the building reportedly caught fire. Nearby, four people were seriously injured when a kamikaze drone struck the Palm Jumeirah Fairmont Hotel, another tourist hotspot popular with Western visitors.

As of Monday, Israel and the United States had struck more than 2,000 targets across Iran, including senior military and political officials along with Islamic Revolutionary Guard Corps leaders, aerial defense systems, ballistic missiles and launchers, intelligence targets, and command centers. On the other side, five countries – Jordan, Kuwait, Bahrain, Qatar, and the UAE – said they had intercepted and shot down about 1,400 Iranian missiles and drones.

When the US and Israel first attacked Iran on Saturday, European leaders were diplomatically neutral at best and Middle Eastern leaders condemned the attacks. But once Iran started firing missiles indiscriminately against various countries, both Europe and the Middle East turned decisively against Iran and vocally supported further action. This is a notable shift that bodes ill for Iran both in the weight of further attacks but also the resolve of the U.S. and Israel to see the mission through thoroughly.

In a joint statement Sunday evening, the three leaders stated they were appalled by what they described as “indiscriminate and disproportionate missile attacks” from Iran and vowed to “take steps to defend our interest and those of our allies in the region.” Late Sunday, Israel announced that it had struck Hezbollah targets in Lebanon after the Iranian-backed group launched a projectile into Israel, the first time it had done so since 2024. Hezbollah said it launched rockets and drones at Israeli territory in retaliation for the killing of Iran’s Supreme Leader.

Timeline of Events Leading to Operation Epic Fury

Saturday’s strikes were not sudden. They were the culmination of eight months of failed diplomacy, mounting sanctions pressure, domestic unrest inside Iran, and an unprecedented U.S. military buildup across the region. The path to conflict was gradual, visible, and ultimately combustible.

• June 13th, 2025 – Israel launches major air strikes against Iranian nuclear and military facilities, amid talks between the U.S. and Tehran. Iran responds within hours with a large-scale missile and drone attack on Israeli cities.
• June 22nd, 2025 – A week after the initial Israeli air strikes, the United States strikes Iranian nuclear facilities at Natanz, Fordow, and Isfahan, with President Trump stating that the attacks severely crippled Tehran’s nuclear program. In retaliation to the targeting of the nuclear sites, Iran fired missiles towards the Al Udeid airbase in Qatar, housing U.S. soldiers. The missiles were intercepted by U.S. air defenses.
• June 24th, 2025 – The U.S. brokers a ceasefire between Iran and Israel, ending all hostilities.
• August 22nd, 2025 – Iran agrees to resume nuclear talks with the United Kingdom, France, and Germany, despite the threat of revived sanctions.
• August 28th, 2025 – The three European countries trigger a mechanism reinstating the United Nations’ sanctions on the Islamic republic for the first time in a decade.
• November 7th, 2025 – President Trump tells the press that Iran has requested that Washington remove its crippling sanctions on Tehran.
• December 28th, 2025 – Protests break out in major cities across Iran, including Tehran, as soaring prices follow the rial’s sharp decline against the U.S. dollar. The currency’s collapse fuels severe inflation, with food prices rising 72% year over year. What begins as economic unrest quickly transforms into a broader movement demanding an end to the Islamic government, becoming the largest uprising since the 1979 Islamic revolution. During the demonstrations, Ayatollah Ali Khamenei and senior officials reportedly order security forces to use live ammunition against protestors, according to Iran International, leaving thousands dead. Human rights activists in Iran confirmed at least 7,000 deaths with other agencies reporting more than 30,000. In the aftermath, authorities impose a nationwide internet shutdown lasting two weeks in an apparent effort to restrict information and suppress coverage of the crackdown.
• January 13th, 2026 – President Trump tells Iranians to “keep protesting,” claiming that “help is on the way.” At this point the US begins to bolster its military presence in Iran. Over the course of the next 6 weeks, the United States goes on to build up its largest military presence in the Middle East since the 2003 invasion of Iraq. This includes two aircraft carrier strike groups.

• February 6th – February 26th, 2026 – Iran and the U.S. have indirect nuclear negotiations in Geneva, mediated by Oman, with the goal of reaching a deal to curb Tehran’s nuclear program.
• February 27th, 2026 – Oman’s foreign minister says Iran agreed to degrade its current stockpiles of nuclear material to “the lowest level possible” – effectively to unrefined levels. President Trump says he prefers diplomacy but warns that “all options” remain available if diplomacy fails.
• February 28th, 2026 – Israel launches coordinated strikes on Iranian targets. The United States follows. Iran responds with a wave of counterattacks across 12 countries in the Middle East, making the most significant regional escalation in decades.

Financial Market Reactions

Oil

The most visceral reaction to the weekend’s events took place in the commodities market, specifically oil. On Sunday oil prices surged with U.S. crude futures rising as much as 11%, trading as high as $75 a barrel, Brent futures, the global price gauge, jumped 8%, to roughly $79 a barrel. The back and forth strikes over recent days have thrown one of the world’s key shipping routes for energy into the crossfire. Iranian officials and media have shared conflicting statements about the status of Strait of Hormuz, but as of noon today the shipping route remains open. The key oil shipping lane, which accounts for 20% of the world’s daily oil volume, is vital to keep open in order for oil prices to remain in check. As of Sunday night, three ships were attacked near the Strait of Hormuz, with Iran continuing to launch strikes across the Middle East in response to the U.S. and Israel. Two vessels have been struck, and an unknown projectile was reported to have exploded near a third according to the UK Maritime Trade Operations Center.

At market open on Monday ICE Brent Crude continued to hover around $79 a barrel and was up 8%.

Equities

As for equities, index futures were down more than 1% on Sunday night but pared losses at the open on Monday.

The S&P 500, Dow Jones Industrial Average, and Nasdaq were down as much as 50 bps after the open, but at the time of writing the S&P and Dow were flat to moderately positive with the tech heavy Nasdaq up around 50 bps. As expected, major moves were concentrated in sectors like energy and industrials. Exxon Mobile, Occidental Petroleum, and Chevron were each up approximately 1.50% at the open, but mixed news about the status of the Strait of Hormuz left investors searching for answers, leading to choppy trading.

Defense stocks including RTX, Northrop Grumman, Lockheed Martin, and BAE Systems all bounced off the weekend news and ensuing comments from the President stating that the operation could last for “four to five weeks”. Citi analyst Charles Armitage stated, “The U.S./Israeli strikes on Iran and Iran’s subsequent retaliation are likely to increase investor focus on missile-defense systems, as well as a likely increase in U.S. spending.”

A less expected reaction in equities took place in the airlines sector. Airline stocks fell sharply during early trading as the conflict forced governments to shut down airports and cancel flights. On top of the logistical nightmare, higher oil prices will drive up the price of jet fuel, hurting profits. The conflict is also likely to force travelers to cancel or put off trips, particularly on international flights. Shares of American Airlines, United Airlines, and Delta all fell sharply with UAL and AAL each down more than 3.50%.

Safe-Haven Assets

Another expected market reaction was a flight to save haven assets such as gold and the U.S. Dollar. Gold rallied early, but pared gains, up about 1% at $5,300 an ounce at the time of writing. Prior to market open futures had spike to more than $5,400 an ounce.

The U.S. dollar also rallied more than 1% on the day with the DXY hitting 98.60 intraday. The jump in value is once again attributed to the spike in energy prices and increased safe-haven demand.

Geopolitical shocks often rattle markets in the short term—stocks fall, safe-haven assets rise, and commodities spike—but history shows these reactions are usually temporary. Once uncertainty fades, markets tend to normalize, with stocks often ending higher than before the event. Past crises, such as 9/11, illustrate how quickly markets can rebound, suggesting this latest conflict is unlikely to derail long-term trends.In moments like this, discipline matters more than emotion. Investors should resist the urge to reposition portfolios based on fast moving headlines and instead stay anchored to their long-term strategy. Geopolitical shocks can create volatility, but they rarely justify abandoning a well-constructed plan.

As we look ahead, the broader risk is not limited to Iran alone. Economic fragility paired with political strain can become combustible in other regions. Whether that risk materializes will depend heavily on how the current conflict progresses and whether tensions intensify or begin to stabilize.

Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

Investment advice offered through Great Valley Advisor Group (GVA), a Registered Investment Advisor. I am solely an investment advisor representative of Great Valley Advisor Group, and not affiliated with LPL Financial. Any opinions or views expressed by me are not those of LPL Financial. This is not intended to be used as tax or legal advice. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly. Please consult a tax or legal professional for specific information and advice.

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Evan Coffey Associate, Asset Management

Evan is an Associate on GVA’s Asset Management Team. He specializes in investment research and has a passion for finance and economics. Evan uses his strong work ethic and financial literacy to help manage GVA’s multi-asset portfolios, mitigate risk, and help coordinate wholesaler relationships.

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