Epic Fury, Phase Two: A Pivotal Week Ahead
Why strike severity, Iranian asymmetry, and Ukraine's pipelines may matter more than headlines for the next leg in equities.
A big week is in front of us after deliberately allowing some time pass following the primetime POTUS speech. Time allows you to see whether post‑speech actions confirm or contradict the apparent pivots. In this instance, time suggests the pivots look genuine when you line up the rhetoric with subsequent action and messaging.
Which brings us to what could be one of the most legitimately consequential weeks in years.
Iran, “deals,” and timelines
There is a high probability Iran does not “strike a deal” given Tehran has publicly rejected the idea that current contacts amount to negotiations. That posture can be face‑saving theater, which keeps a deal on the table in theory, but nothing in Iran’s behavior suggests active preparation to deescalate. A long war is better for Iran’s leverage, and that lowers the odds that whatever is happening through proxies quickly morphs into a durable off‑ramp.
US strikes, if/when they come, are more likely to be phased than “shock and awe”: enough damage to show resolve, with room to scale if Iranian retaliation crosses US red lines. Washington has long had the capacity to inflict significantly more damage on Iranian infrastructure than it has chosen to so far, and that restraint is a tell about intent. The US does not appear to want to bring this fight to the Iranian population, or we would already see a very different target set.
Tactically, a more forceful, targeted strike package may be short‑term bullish as it compresses the perceived conflict timeline and reinforces the sense that the US controls the escalation ladder, not because war is “good news.” A “pillow fight” response would do the opposite—signal hesitation, prolong the uncertainty window, and undermine confidence in a clean resolution, which markets typically dislike. All of this remains conditional on avoiding a true supply or systems shock (for example, sustained closure of Hormuz or a major cyber hit on critical infrastructure), which could override any relief rally.
Cyber, retaliation, and what comes after
The post‑attack landscape will be highly informative, especially if the US does not cut the main internet cables serving Iran. Iran has multi‑source‑validated asymmetric cyber capability that exceeds many mid‑tier actors, and successful operations against data centers, financial rails, or logistics networks would be problematic. Given Iran’s eye‑for‑an‑eye doctrine, it is reasonable to expect retaliation across domains, including cyber, where it can impose cost without matching US conventional power. In that sense, US strikes are the beginning of the next phase, not the end.
Markets may be underpricing that asymmetric layer. Given Iran’s diverse toolkit, or even known capabilities targeted at new vulnerabilities, the surprise factor around their response could weigh more heavily on risk assets than the initial US campaign. Seeing both the initial US strike package and at least the first serious Iranian response before underwriting a durable bottom seems prudent; rallies before that look more like tradable squeezes than regime‑change entries.
Power players and escalation appetite
There is more support than not for major action. Saudi messaging has emphasized that prior sanctions relief flowed into Iranian defense and proxy capacity, not “roads and bridges,” underscoring how regional players view Iran as already heavily armed.
At the same time, JPMorgan CEO Jamie Dimon has been explicit that the US must “finish this thing” with Iran and remove the threat, arguing that a decisive outcome matters more than near‑term market volatility. His line—“it’s much more important that this be successfully completed than what the market does”—gives you a very public example of a power center that prefers a firm resolution over an unstable status quo. These are not marginal or unintelligent voices.
Polls show what they show, but key actors are not visibly fazed by the prospect of increased engagement. At that scale, with that toolkit, you can afford to think in base reality terms: a resounding US defeat of Iran’s war‑making capacity is in the perceived interest of a wide set of players, far more than it is in Iran’s. Functionally, it means the political and financial support exists to “drop the hammer” if that’s the path chosen.
Iran could, in theory, be quietly negotiating with the US and end this conflict tomorrow. It’s possible. But it reads highly improbable when you line up the US surge in equipment and personnel to the theater, Iran’s continued missile activity, and open threats against US‑aligned economic infrastructure such as data centers. Using a clean offramp as a base case looks low‑probability from here.
Ukraine, energy, and leverage over Europe
Keep an eye on Ukraine. Kyiv has been attacking Russian energy infrastructure and, in the Druzhba pipeline disputes, has shown it is willing to fight over the remaining Russian oil routes to Central Europe. That has already helped trigger a bitter spat with Hungary and Slovakia, held up a major EU loan package for Ukraine, and forced Brussels to offer money and technical support to get flows resumed.
Ukraine’s leverage is strongest at the margin and inside EU politics. By enabling or constraining flows on the remaining Russian routes, Kyiv can make life harder for member states that still rely on Russian barrels and, indirectly, for their willingness to sign off on further aid. That’s happening at the same time the EU is trying to phase out Russian fossil fuels and lean harder into LNG and renewables—making Europe more dependent on less convenient suppliers and, in the case of LNG, on routes now exposed to Iran/Hormuz risk. That combination is not a comfortable strategic place to be.
Non‑POTUS signals and escalation appetite
Non‑POTUS actors are helpful tells. Senator Lindsey Graham, for example, briefly throttled back his rhetoric toward “ending the crisis” and “peace” early last week, then flipped back to encouraging aggressive action after the primetime address. You don’t have to like Graham to use him as a bellwether for escalation appetite inside parts of the US political system. It’s worth watching whether his line moderates or hardens over the next couple of sessions. Always scrutinize material deviations in behavior.
From “polycrisis” to portfolio channels
You can always claim we live in a polycrisis, but this configuration has more teeth. Even if US strikes are sufficient to degrade Iranian capacity over the coming weeks, real‑world problems remain and new ones may be created depending on how Iran retaliates.
A few concrete channels to care about:
• Europe’s already fragile energy system faces layered risks: Iran war disruptions in the Gulf, Ukraine–Russia pipeline disputes, and a slow, expensive grid build‑out. That implies a higher floor under power prices and persistent margin pressure for energy‑intensive industry.
• Inflation and rates: a renewed energy shock plus higher term premia complicate the “clean disinflation” story just as private credit is wobbling, increasing the risk that policy has to stay tighter into a weaker growth backdrop.
• US vs RoW: in a harder world where energy security and hard power matter more, the US’s role as both energy exporter and security provider tends to reinforce relative preference for US assets over more fragile, energy‑importing blocs.
The end of the US–Iran conflict will be an end, but also a beginning. There is a plausible world where the damage done by the economic impact of this conflict—on energy, supply chains, and confidence—creates severe knock‑on consequences that later invite “bullish” emergency measures. Those measures, historically, come after the pain, not before.
A harder world order
It seems prudent to start reviewing the world through a different lens. NATO may or may not survive 2026 in anything like its current form. The US is now more of a center of the energy world than at any point in decades, and that role is likely to grow. Countries are going to be forced to care more for themselves.
We are likely exiting a period where weaker states could lean heavily on US security guarantees and global institutions to constrain stronger actors at low cost. In a scarcer, more economically natural system, material power and self‑help will matter more, and the calculus for alliance management, burden sharing, and deterrence will shift accordingly.
For analysis and positioning, that means future problems require different calculus: less assumption of automatic US backstops, more attention to who controls energy and chokepoints, and closer mapping of hard capabilities on a country-specific basis.
When to get bullish
The aim of all of the above is simple: deciding when to re‑enter risk. As you know, markets move ahead of full resolution. The process may have started last week, but we may not have a durable bottom in place until we see (1) what the US strike package actually looks like and (2) how Iran’s first serious retaliation lands and is absorbed.
Consider three phases:
1. Pre‑strikes: skew to defense and optionality; headline risk dominates.
2. Post‑US strikes, pre‑Iran response: beware false‑dawn rallies as markets extrapolate a “decisive” outcome from incomplete information. This is important to remember, regardless of the actions that take place.
3. Post‑Iran response: once the main body blows are delivered and we see whether they include a true supply or systems shock, you can start underwriting more durable entries if the damage is containable. Iran’s response is as, if not more, important than any US action in terms of surprise power, and equity markets don’t love surprises.
Markets may be underpricing Iran’s remaining asymmetric capability, which is neither fully defeated nor as weak as some podium rhetoric suggests. Given that toolkit, their eventual response—especially in cyber or targeted infrastructure attacks—may matter more for the medium‑term market path than anything the US launches after the 5:00 PM PT deadline.
We’ll have a better sense of that once both sides have thrown their initial punches.
Shaping up to be quite an informative week.
Disclaimer: This publication is for informational and educational purposes only and reflects the author’s personal views as of the date of writing. It does not constitute investment, legal, tax, or any other professional advice, and it should not be relied upon as such. No recommendation or solicitation to buy or sell any security, strategy, or financial instrument is being made. Markets involve risk, including the potential loss of principal. Readers should conduct their own research and consult with qualified professionals before making any investment decisions.