Iran expands conflict with new attacks on US allies in Middle East

Fox News reports that Iran has escalated its military actions by targeting U.S. allies throughout the Middle East. This development comes amidst the ongoing 2026 Iran war, which involves multiple regional players including the United States, Israel, and several Gulf Arab states. The conflict has intensified with Iran’s use of missiles and drones against U.S. military facilities and allied nations such as Bahrain, Kuwait, Qatar, Saudi Arabia, Oman, and the UAE. These attacks suggest a shift towards a broader regional campaign, extending beyond the bilateral hostilities with the U.S. In the context of prediction markets, this escalation appears to be influencing the perceived likelihood of a U.S.-Iran deal in 2026 that would include reconstruction funding for Iran. As of now, the probability of such an agreement being reached by the end of the year is priced at approximately 29% YES. This reflects a slight decrease from recent days, suggesting that the increased hostilities may be viewed as a barrier to diplomatic progress. Market participants seem to interpret the heightened tensions as reducing the chances of successful negotiations, with observable decreases in the odds across sev...