U.S. and Iran exchange strikes after attacks on Larak Island, Kharg Island not hit

U.S. Central Command said American forces carried out a limited, precise strike on two launchers on Iran's Larak Island in the Strait of Hormuz on Sunday, citing an imminent threat from Iranian Revolutionary Guard forces preparing rockets with sea mines. Iran responded by firing ballistic missiles at U.S. bases in Jordan, which it claimed caused casualties.

A senior Iranian source told Reuters that Tehran would retaliate to each U.S. attack with force "dozens of times greater" and warned that vessels violating Iranian rules in the Strait could face harsher conditions. The Iranian side described the exchange as a "limited and contained confrontation," indicating it does not view the incidents as a broader war.

President Donald Trump posted AI-generated videos on Truth Social suggesting that Iran's Kharg Island, a key oil-export hub, would be "blown to smithereens." An Iranian energy official called the post "laughable" and said operations on the island continued normally. A U.S. official later confirmed to Reuters that Kharg Island was not targeted in the overnight strikes.

The hostilities have pushed oil prices up more than 3% and contributed to a decline in U.S. stock indexes at the opening bell. Market participants noted a rising probability of a Federal Reserve rate hike in September, citing recent hawkish comments from Fed Chair Kevin Warsh.

Treasury Secretary Scott Bessent said Iran's military actions are a kinetic response to the economic pressure from U.S. sanctions, adding that Tehran needs to "come to its senses." Meanwhile, U.S. Central Command denied Iran's claim that a supertanker had struck mines in the Strait of Hormuz, calling the allegation disinformation aimed at intimidating commercial shipping.