Has Israel Pushed US into War Against Iran?

The latest military confrontation involving the United States and Iran did not emerge in a vacuum. It followed Israeli escalation that Washington ultimately chose to join. The central question, therefore, is not whether America is now at war — it clearly is — but whether the pathway to war was shaped primarily in Tel Aviv rather than Washington.

For years, US policy has demonstrated near-automatic alignment with Israel’s security doctrine. Strong diplomatic cover and sustained military support during regional crises created a strategic environment in which Israeli planners could reasonably assume American backing in the event of wider confrontation. When Israeli strikes expanded toward Iran in mid-2025, that assumption appeared to hold. The United States did not restrain the escalation; it became a direct participant.

The recent Senate briefing by Secretary of State Marco Rubio and senior defense officials has done little to clarify the strategic endgame. Lawmakers from both parties emerged expressing uncertainty about objectives, timelines, and even the possibility of deploying ground troops. Concerns over drone defenses, casualties, and munitions stockpiles further suggest that the conflict may be broader and more prolonged than initially presented.

This pattern evokes uncomfortable historical parallels with the Iraq War — a campaign launched with confidence but sustained amid shifting justifications and unclear exit strategies. No two conflicts are identical, yet the strategic risks of escalation without defined political outcomes remain constant.

To be clear, Iran’s regional posture and missile capabilities are not trivial matters. Nor can Israel’s security anxieties be dismissed. However, the responsibility of a global power extends beyond alliance solidarity. It requires independent assessment of costs, consequences, and long-term regional stability.

If Israeli action triggered the sequence of escalation and the United States entered primarily to preserve alliance credibility, then Washington must ask whether it is shaping events — or being shaped by them. Strategic partnerships are assets, but they should not become conduits for unintended wars.

At stake is not merely battlefield success, but America’s claim to strategic autonomy. In geopolitics, perception often hardens into reality. The longer this war continues without clearly articulated objectives, the louder the question will grow: who truly set this course?

PSX benchmark index up 3.6%WoW despite unrest in Middle East

Pakistan Stock Exchange (PSX) staged a strong rebound during the week following the ceasefire agreement between Iran and Israel. The benchmark index gained 4,356 points or 3.6%WoW to close at record 124,379 points on Friday, June 27, 2025.

While the week began on a cautious note due to renewed concerns over regional instability following the US attacks on Iranian nuclear facilities, the ceasefire restored investors’ confidence and triggered a sharp recovery from the second trading day onward.

Market participation dropped despite the rally, with average daily traded volume falling to 736 million shares from 822 million shares a week ago, down 10%WoW.

The foreign exchange reserves held by State Bank of Pakistan (SBP) declined sharply by US$2.7 billion to US$9.1 billion as of June 20, 2025, the second-largest weekly fall, mainly due to scheduled external debt repayments.

However, SBP reiterated its June end reserve target of US$14 billion, with US$3.6 billion inflows expected to be reflected in the coming week. Domestic currency remained largely stable at PKR283.7/US$.

The FY26 Federal Budget was approved on Thursday, with minor adjustments to tax laws and rates.

On the inflation front, headline CPI for FY26 is projected to moderate further to 4.4%YoY as compared to 4.5% for FY25, due to a moderate increase in food and housing indices.

Other major news flow during the week included: 1) Pakistan and United States eyeing preferential trade deal in talks, 2) Consumer confidence at highest since 2022, up 25%YoY in 4QCY25, 3) Power generation up 1%YoY in May 2025 on lower tariffs, and 4) RDA inflows were up 14%MoM in May 2025, to US$10.38 billion.

Woollen, Glass & ceramics, and Vanaspati & allied sectors were amongst the top performers, while Modaraba, ETFs, and Sugar & allied industries reported declines.

Major selling was recorded by Foreigners and Individuals with a net sell of US$15.8 million. Mutual funds and Insurance absorbed most of the selling with a net buy of US$16.1 million.

Top performing scrips of the week were: BNWM, GHGL, NATF, HUMNL, and PABC, while laggards included: PSEL, PKGP, PGLC, EPCL, and ISL.

According to AKD Securities, the market is expected to remain positive in the coming weeks, with forward inflation for FY26 projected at 4.4%YoY, indicating substantial room for monetary easing, which would serve as a catalyst for equities.

The KSE-100 index is anticipated to sustain its upward trajectory, primarily driven by strong earnings in Fertilizers, sustained ROEs in Banks, and improving cash flows of E&Ps and OMCs, benefiting from falling interest rates and economic stability.

Top picks of the brokerage house include: OGDC, PPL, PSO, FFC, ENGROH, MEBL, MCB, HBL, FCCL, INDU, and SYS.