Strait of Hormuz, breaking news! Iran: Taking significant action!

Iran Issues Warning!

According to the latest reports, on March 21 local time, Iran’s armed forces announced that Iran is taking significant action in the Strait of Hormuz. If Iran’s infrastructure is targeted, Iran will retaliate against more important and critical U.S. and Israeli infrastructure.

Notably, a strategist at JPMorgan Chase stated that due to the uncertainty of the Iran conflict, the target for the S&P 500 has been lowered to 7,200 points. JPMorgan said that supply shocks caused by disruptions in oil transportation through the Strait of Hormuz could compress corporate profits and slow economic growth.

Iran: Taking Major Action

According to CCTV News, a spokesperson from Iran’s Central Headquarters of the Hatam Abiyah Armed Forces said on the 21st local time that Iran is “taking major actions in the Strait of Hormuz.” The spokesperson emphasized, “If Iran’s infrastructure is attacked, Iran will retaliate against more important and critical infrastructure of the U.S. and Israel.”

The spokesperson also stated that Iran is seeking to establish a sustainable security path amid current conflicts and stressed that Iran’s actions are not only for self-defense but also to maintain regional security. Iran will respond to related threats with “its own strength,” and the armed forces are equipped with the necessary capabilities.

On the morning of the 21st local time, Iran’s Natanz nuclear facility was attacked by the U.S. and Israel. Iran claims that this act violates international laws, including the Non-Proliferation Treaty.

Following the attack, Iran’s Nuclear Safety System Center conducted technical and expert studies on the possibility of radioactive material leaks in the area. The results showed that there was no radioactive leak at the facility, and nearby residents were not threatened.

According to Xinhua News Agency, U.S. President Trump posted on social media on the 20th that the U.S. is “very close” to military targets and is considering gradually de-escalating military actions against Iran. However, U.S. media reported on the 20th that the U.S. continues to reinforce its forces in the Middle East, including deploying an amphibious assault group and about 2,500 Marines.

Since the U.S. and Israel launched military strikes against Iran, Trump and other U.S. officials have made conflicting statements about the reasons and goals of the actions, sparking controversy and criticism domestically. A recent poll by Reuters and Ipsos shows that nearly 60% of Americans oppose military action by the U.S. and Israel against Iran.

JPMorgan Downgrades S&P 500 Target

Recently, JPMorgan strategists lowered their target for the S&P 500, citing that Middle East conflicts are imposing “greater constraints” on the upside potential of risk assets.

Led by Fabio Bassi, JPMorgan’s strategists have revised the year-end forecast for the S&P 500 from 7,500 to 7,200 points, citing supply shocks from disruptions in oil transportation through the Strait of Hormuz, which could reduce corporate profits and slow economic growth.

In a report to clients on Friday, Fabio Bassi wrote, “Geopolitical concerns and prolonged high energy prices will weigh on global growth and push inflation higher. We advise investors to stay invested while hedging against downside risks, given the modest adjustments so far this year.”

Since the outbreak of Middle East conflicts three weeks ago, the U.S. stock market has been under pressure. The S&P 500 fell 1.51% on Friday to 6,506 points, its lowest in six months, marking the fourth consecutive week of decline—the longest streak in over a year. JPMorgan’s new target still implies an 11% upside from Friday’s close by year-end.

According to Bloomberg, tensions between Iran and the U.S. have added a new pressure point to the markets, which are already dealing with other headwinds, including shocks to the AI industry and concerns over private credit write-downs. Fabio Bassi stated that soaring oil prices threaten corporate earnings growth.

In the report, Bassi wrote, “In terms of earnings, if oil prices stay around $110 per barrel until the end of the year, consensus earnings estimates for the S&P 500 will be revised downward by 2% to 5%. If crude prices rise further, the pressure will intensify. Recent stock market risks are more about valuation compression as investors reassess growth and liquidity conditions, rather than deep profit recessions.”

Earlier this week, JPMorgan strategists noted that although five out of six oil shocks since the 1970s have led to recessions, investors have yet to price in the potential economic damage from soaring energy prices and the prolonged closure of the Strait of Hormuz.

The ongoing war between the U.S., Israel, and Iran has nearly halted shipping through the Strait of Hormuz, which normally accounts for about 20% of global oil transportation. Currently, only a few oil tankers are passing through. Brent crude has surged over 50% this month, and Middle Eastern oil grades like Murban have doubled in price.

Bloomberg reports that the resulting rise in fuel prices for U.S. consumers is putting enormous pressure on President Biden and the Republican Party ahead of the midterm elections in November. Persistent inflation could weaken the Republicans’ chances of maintaining control of Congress, and losing either chamber could hinder Trump’s political agenda.

Bank of America’s Global Research warns that a prolonged shutdown of the Strait of Hormuz could push oil prices to $200 per barrel and increase recession risks. Francesco Blanch, head of commodities and derivatives research, said that the current conflict has tightened global energy supplies, and the shipping route needs to reopen quickly to mitigate economic damage. Due to this supply shock, BofA has raised its oil price forecast for 2026.

Analysts believe that the next phase will depend on whether shipping resumes quickly or remains restricted. If the disruption continues, rising energy costs could further fuel inflation and dampen demand in the U.S., Europe, and Asia.

Layout: Liu Junyu

Proofreading: Li Lingfeng