Iran fired ballistic missiles at US military positions in Jordan overnight, and President Trump responded Wednesday morning by telling Fox News, on camera, that the United States is going to "beat the f---ing s--- out of" the Islamic Republic. The Dow dropped 707 points. Oil jumped 7%. And the Federal Reserve is scheduled to meet this afternoon to decide whether to raise interest rates into an economy that is now actively on the edge of a broader Middle East war.
What Actually Happened Overnight
Iran's Islamic Revolutionary Guard Corps fired ballistic missiles at two targets in Jordan: the Muwaffaq Salti Air Base and the headquarters of US Central Command. According to Fox News, Jordan's military said five Iranian missiles were intercepted and destroyed. US Central Command confirmed all incoming missiles were successfully shot down, and Trump told Fox News that American personnel were calling out coordinates in real time during the interceptions, a detail he said he watched on video.
US and Saudi aircraft responded quickly. According to the New York Post, American and Saudi jets struck "multiple terrorist logistics and weapons sites" in eastern Iraq in retaliation for more than 30 drone attacks over the past three days by what Centcom described as "Iran-aligned terrorists." Fox News reports the strikes were coordinated with the Iraqi government, per Trump himself, though photographs from AP show damaged structures at a Popular Mobilization Forces base in Mosul, which is the kind of image that tends to complicate the phrase "coordinated with."
As of Wednesday morning, no US casualties from the overnight missile attack had been confirmed. Fox News did report that the Army had identified two victims killed in a separate Jordan air base attack, suggesting this escalation has already drawn American blood in the region.
Trump's Exact Words, Because They Matter
Let's be precise. The President of the United States told Fox News chief foreign correspondent Trey Yingst, on the record: "We're going to beat the f---ing s--- out of them." He added: "We'll be hitting them hard. They're going to get a beating."
In the same breath, Trump said negotiations with Iran would continue. "We're going to let them keep talking," he said. So the official US position is, simultaneously, that we are about to deliver a severe military beating to a country and also that diplomatic talks with that country are ongoing. Whether those two things can coexist is, apparently, a question for the adults in the room to sort out, assuming any are present.
Trump also called Iran-backed militias a "cancer on the world" and said additional warnings against Iranian proxies were under consideration. Secretary of State Marco Rubio, meanwhile, has been separately accusing Iran of flying IRGC personnel into Yemen as the Houthi threat escalates, per Fox News. The region is, to use the technical term, extremely lit right now.
The Markets Are Having an Absolutely Terrible Morning
Wall Street did not take any of this well. The New York Post reports the Dow Jones Industrial Average plunged 707 points, or 1.3%, by around 10:10 a.m. ET. The S&P 500 fell 0.5% and the Nasdaq dropped 0.6%. Chipmakers got hit especially hard: AMD sank 3.2%, Nvidia fell 2.1%, and Broadcom dropped 0.6%, a combination of war fears and ongoing anxiety about an AI bubble and the possibility that China's own technology sector is closing the gap with American rivals.
Oil was the real story. Brent crude surged 6.4% to $89.45 a barrel, while West Texas Intermediate jumped 7% to $84.84. The New York Post notes that the Strait of Hormuz, which carries roughly 20% of the world's oil supply, has been largely blockaded for months amid the ongoing conflict with Iran, and US gasoline prices have already climbed above $4 a gallon. Fresh reports of suspicious activity in the Red Sea, flagged Tuesday by the UK Maritime Trade Operations Centre, have raised new fears that the Bab el-Mandeb Strait, which carries about 7% of global oil, could be the next chokepoint to go.
The Fed Walks Into All of This Today
Here is the timing that should make anyone with a retirement account want to lie down on the floor. Federal Reserve Chairman Kevin Warsh holds his second meeting as Fed chair today, Wednesday, with a rate decision expected this afternoon. According to the New York Post, markets were already pricing in a hold in the 3.5% to 3.75% range, but Warsh's hawkish stance on inflation has been cooling hopes for any cuts. Add a potential war premium baked into oil prices, and the picture gets uglier fast.
The odds of a rate hike at today's meeting had already climbed to 35%, according to CME FedWatch data cited by the New York Post. More than half of traders now anticipate the Fed will raise rates by a quarter point by September. That means the American consumer, already paying over $4 a gallon for gas, may soon be paying more to borrow money too. The economy is being squeezed from both ends simultaneously, and the president is on television promising to beat a foreign government into submission.
How We Got Here, Briefly
This is not a sudden outbreak of chaos. The Strait of Hormuz blockade has been grinding away for months, producing what the New York Post describes as the world's worst-ever energy supply disruption. Houthi attacks on Red Sea shipping have been ongoing. Iran-aligned groups have launched more than 30 drone attacks in the past three days alone, according to Centcom. The overnight missile strike on Jordan was the biggest direct escalation yet, but it did not come from nowhere.
Rubio has been raising alarms about IRGC personnel moving into Yemen, per Fox News, suggesting Iran is actively expanding its operational footprint across the region. Saudi Arabia struck back alongside the US overnight, with Riyadh's defense ministry stating it "does not seek escalation but will respond to any aggression." That sentence, from a government that just participated in airstrikes on Iraqi soil, gives you a sense of where the diplomacy stands.
The Dingo Take
The President of the United States threatened a sovereign nation with a profanity-laden promise of military violence, on camera, to a reporter, while simultaneously insisting that negotiations with that nation remain open. Markets cratered. Oil spiked toward levels that will make every commute in America more expensive. And the Federal Reserve is walking into its rate decision today carrying a geopolitical grenade with the pin already pulled. This is not a stress test. This is the test.
Trump's quote will get clipped and shared and debated for days over whether the language is appropriate for a sitting president. That is the wrong argument to have. The language is the least interesting part. The interesting part is that the United States and Iran are exchanging missile strikes and retaliatory airstrikes across multiple countries while the president maintains, with a straight face, that talks are continuing. At some point, a "talk" becomes difficult to distinguish from a war. We may already be past that point.
American troops are in Jordan. Two have already been killed in the region. The Strait of Hormuz is blockaded. Gas is over four dollars. The Fed might raise rates. And the guy running the response just told the country his strategy on Fox News using words that would get you kicked out of a Little League game. If this is winning, it is very hard to see what losing would look like.
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