Recent U.S.-Iran hostilities, initiated by airstrikes in February 2026 and followed by a June memorandum of understanding that halted major combat, have shifted toward intermittent strikes, naval pressures on the Strait of Hormuz, and economic measures such as Operation Economic Outcast rather than ground operations. Officials have weighed but paused limited raids or island seizures due to risks of escalation, high casualties, and global economic disruption, with the administration favoring sanctions and negotiations over full-scale invasion. The short window to 2027, combined with ongoing ceasefire extensions and reconstruction talks, reinforces trader consensus against an invasion, as historical patterns and current military posture prioritize containment over occupation.