Iran Conflict Escalation Triggers Stagflation Fears as War Enters Second Month

The conflict involving Iran has escalated significantly as it enters its second month, with Israeli air strikes targeting critical electricity facilities in Tehran. Tensions reached a new peak following reports of an Iranian attack on a US AWACS aircraft at a Saudi airbase, prompting the Pentagon to deploy Marine units for potential ground operations. Financial markets are reacting sharply, with Goldman Sachs noting a shift in sentiment from inflation risks toward a broader stagflationary growth scare. This geopolitical volatility has driven oil prices higher while weighing heavily on global equity indices like the SPY. Regional foreign ministers are scheduled to meet in Pakistan this Sunday to explore a diplomatic offramp and prevent further destabilization. Investors are increasingly pivoting toward safe-haven assets such as XAU/USD as the prospect of a prolonged supply shock looms over the global economy.