Monday’s open: the situation has suddenly turned.

| CNN Top Headlines Today: A close-up photo of a U.S. flag with a “Breaking News” label. The image summary says that this is the first time since March this year that U.S. servicemembers have died as a result of Iran’s firepower attack.

——The risk level for the Monday open needs to be raised. This isn’t just the usual “Middle East escalation again”; it’s moving into a more sensitive phase: when the U.S. military suffers direct casualties, the market will immediately reprice the likely strength of U.S. retaliation.

The script for Monday’s open has been completely rewritten:

AP reports that the U.S. military has confirmed that after Iran carried out an attack on Jordan, two U.S. servicemembers were killed, four were injured, and one is missing.

Iran announced on Saturday that it will no longer comply with the terms of the interim peace agreement.

First, this news of U.S. military casualties pushes the war to an entirely new level of intensity. In the past, the market could still interpret the U.S.-Iran conflict as a “manageable escalation”: you hit once, I hit back; oil prices rise for a while, then negotiations cool off once signals emerge. If there were no U.S. casualties, the White House could still choose restraint—sending negotiation signals to give the market some breathing room. But with U.S. deaths, the pressure facing Trump rises exponentially. It’s hard to respond with words alone; it requires a “proportionate, even amplified” military response. What the market cares about now isn’t what Iran says, but where the United States will strike next. If the response expands to Iran’s energy, ports, and maritime transport, the risk premium on crude oil will rise quickly.

Second, on Friday this week the market already pushed its worries about AI to a new height, and now concerns about the Middle East conflict have also escalated to a new height. What’s especially worth noting is that Friday’s selloff in the market was driven purely by a liquidity stampede and valuation bubble compression—oil prices didn’t really rise that day (geopolitics wasn’t even the main cutting edge at the time). Previously, the market treated AI and energy as two separate storylines. But if oil prices surge on Monday, these two lines will meet for the first time, triggering a rebalancing of assets across the entire market.

Third, according to the survey we published on Saturday, investors are slightly bearish on gold next week (42% bullish, 40% bearish), strongly bullish on oil next week (70% bullish, 18% bearish), and bearish on the U.S. stock market (28% bullish, 63% bearish). At this moment, the market is sliding into an extremely twisted and dangerous pricing logic.

Fourth, on Monday, Asian markets will take the hit for the U.S. stock market first, because the U.S. stock market hasn’t opened yet—Asia has to absorb that blow first. South Korea is the most sensitive, because it’s right at the point where AI de-leveraging is in the spotlight. A-shares are relatively steadier, but AI and semiconductors will also be dragged down by South Korea and the tech-heavy Nasdaq.

What the market truly fears is that war will change the inflation path; what is truly dangerous is when, during an AI pullback, oil prices break out. If these two lines gain momentum at the same time, the market will enter a more complex repricing cycle.