The US Central Command reports that Iran launched cruise missiles at US military and commercial ships in the Persian Gulf.
US forces responded by destroying six Iranian small boats in what marks a significant escalation in the Gulf. The incident is the latest development in Operation Epic Fury, the US-led naval blockade of Iranian ports. Iran has enforced a counter-blockade in the Strait of Hormuz, and the missile attack suggests a shift from standoff enforcement to direct naval combat.
Prediction markets now show a 14.5% probability of a US-Iran nuclear deal by May 31, down from 14% a day earlier. The likelihood of Iran closing its airspace by May 8 climbed sharply to 35.5% from 14%. The military engagement indicates worsening relations and diminishing prospects for a diplomatic resolution.
Key figures to watch include President Donald Trump and Iran’s Supreme Leader Ali Khamenei for signs of de-escalation or further confrontation.