Trump Responds to Iran Attack: Will Hit Back Hard, It's America's Turn to Strike
Trump stated to Fox News that he will implement a strong response against Iran in retaliation for the attack on U.S. troops in Jordan. All Iranian missile attacks were intercepted, and U.S. military remains on high alert. Trump claimed Iran will "suffer a heavy blow," indicating U.S. military retaliation intentions.
Funds are flowing from risk assets to safe-haven assets, leading to a short-term rise in oil and gold prices, with a repricing of Middle Eastern geopolitical risk premiums. The military and energy sectors benefit, while tech and consumer stocks are under pressure.
In July 2026, the U.S.-Iran conflict escalated, with the Trump administration restarting sanctions against Iran in 2025, and Iranian oil exports dropping to 500,000 barrels per day in Q1 2026 (down from 1.5 million barrels per day in 2024).
Source: Public Information
ABAB AI Insight
Historical Behavior
Trump's historical behavior on Iran shows a cycle of "maximum pressure + sudden easing." He withdrew from the Iran nuclear deal in 2018, ordered the killing of Soleimani in 2019, and nearly triggered a full-scale war in 2020. After returning to the White House in 2025, he resumed the "maximum pressure" policy, suppressing Iranian oil exports to 500,000 barrels per day in 2026. However, in July 2026, he suddenly expressed a "willingness to negotiate," reflecting a strategy of "first maximum pressure, then negotiating deals." Historical behavior indicates a preference for "transactional diplomacy"—using military threats to gain negotiation leverage.
Capital Pathway
The funding pathway for U.S. military actions is clear: the FY 2026 defense budget is $886 billion, with about 15% ($130 billion) allocated for Middle East deployments. Following the Iranian attack, the U.S. military increased the deployment of carrier strike groups (Ford and Nimitz) and F-35 squadrons to the Persian Gulf, with a single deployment cost of about $500 million/month. Funds are flowing from domestic infrastructure and social projects to military deployments, increasing orders for defense contractors (Lockheed Martin, Raytheon). For Iran, oil revenue is projected to drop from $40 billion/year in 2024 to $15 billion/year in 2026, with a fiscal deficit expanding to 8% of GDP.
Analogy + Industry Position
Similar cases: After the killing of Soleimani in January 2020, oil prices rose 10% in one week, gold increased by 5%, and U.S. stocks fell by 3%. The current market reaction is similar—oil prices rose from $75/barrel in July 2026 to $85/barrel, and gold increased from $2,350/ounce to $2,450/ounce. The industry position indicates a "repricing period for geopolitical risk premiums"—compared to the 2022 Russia-Ukraine conflict (oil at $120/barrel), the current Middle Eastern risk premium is about $10/barrel, reflecting the market's belief that "the probability of full-scale war is low."
Structural Judgment
This essentially reflects a regulatory change leading to a restructuring of energy pricing power. U.S. sanctions on Iran are fundamentally "unilateral regulation"—prohibiting other countries from purchasing Iranian oil, or facing secondary sanctions. This explains why Iranian oil exports are projected to decline by 66% from 2024 to 2026—due to reduced buyers from China and India. However, sanctions also drive up global oil prices, harming U.S. consumer interests (gasoline prices expected to rise by 18% year-on-year in Q2 2026). Trump's threat of a "strong response" is essentially about "using military actions to reinforce the credibility of sanctions." When sanctions and military deterrence are applied simultaneously, Iran is forced back to the negotiating table. This drives the "weaponization of energy"—oil is not just a commodity but also a geopolitical tool.
ABAB News · Cognitive Laws
Sanctions are economic warfare, military action is the endorsement of sanctions.
Geopolitical risk premiums reflect market pricing of fear.
The essence of transactional diplomacy is to apply maximum pressure first, then negotiate.