Trump warns Houthis of military action after Saudi tanker attacks

In a recent development, President Donald Trump has issued a stark warning to the Houthi rebels, threatening a “great military punishment” following their attacks on Saudi oil tankers. The situation has escalated tensions in the region, with the United States holding Iran accountable for the actions of the Houthi group, which is considered to be backed by Tehran. This development is part of the broader conflict in Yemen and the ongoing regional confrontation between the U.S. and Iran, involving cross-border attacks and limited diplomatic progress. The market response to Trump’s statement indicates a shift in the perceived likelihood of a U.S.-Iran deal in 2026. The probability of a deal including Iran Reconstruction Funding has decreased, reflecting the increased strain on diplomatic channels. This is evidenced by recent market data showing a decline in YES probabilities across various sub-markets related to the potential U.S.-Iran agreement. Key Takeaways Trump’s threat of military action against the Houthis and Iran appears to decrease the chances of a U.S.-Iran deal in 2026. Market pricing suggests a reduced likelihood of Iran Reconstruction Funding being part of an agreement, w...