The S&P 500 Index (SPX) (SPY) (DIA) and the Nasdaq 100 Index (QQQ) were all down in afternoon trading as Treasury Yields (T-notes) retreated following comments from Federal Reserve Chair Jerome Powell that the central bank's tools for addressing supply-side shocks remain limited. The US and Israeli forces continue to engage in attacks on Iran, while the UAE issued multiple alerts and Saudi Arabia and Kuwait reported numerous strikes by Iranian drones and missiles. The closure of the Strait of Hormuz, the source of Iran's attacks on shipping and forced Gulf producers to cut output due to the situation. Crude oil prices are up more than +2% at a 3-week high due to Iran’s actions. The markets are discounting a 3% chance for a +25 bp FOMC rate hike at its next policy meeting. European government bond yields are also moving lower, with the 10-year German bund yield down -5.5 bp to 3.039%. Meanwhile, June T-notes (ZNM6) are up by +24 ticks due to speculation that the ongoing war in the Middle East could lead to a fuel shortage, offsetting inflation fears and potentially keep the Fed from raising interest rates.