Raymond James analysts including Ellen Ehrnrooth and Ed Mills predict a U.S. military operation in Iran is "likely at this stage," though the scope remains uncertain. The Trump administration may prefer targeted actions, but increased military buildup in the Middle East and stalled diplomatic talks have raised the prospect of wider engagement.

The U.S. demands Iran end its nuclear program, constrain ballistic missiles, and reduce support for regional proxies. Iran has refused these terms while denying ever attempting to build nuclear weapons. Supreme Leader Ali Khamenei promised a "maximum response," suggesting Iran could deliver a blow that would make the U.S. "unable to get up again."

Financial markets are bracing for potential disruptions to oil supplies from Iran, a major producer with influence over the Strait of Hormuz through which 20% of global oil passes. Brent crude prices have hovered near their highest level since early August, with analysts predicting strikes could drive up prices and maintain inflationary pressure.