Fears of a potential ground invasion of Iran by the U.S. and its allies continued to pressure markets. Despite ongoing mediation efforts, investors remain skeptical about the likelihood of a swift resolution. The Strait of Hormuz, which was briefly reopened to countries purchasing oil in yuan, was again closed to traffic on Friday, further escalating tensions. As a result, investors expect energy prices to remain elevated for an extended period, driving inflation expectations meaningfully higher and pushing markets to price in a 20% probability of a September rate hike by the Fed.