Israel faced a missile attack from Iran on Tuesday, causing US stock markets (^DJI, ^IXIC, ^GSPC) to dip into the red. Raymond James Washington policy analyst and managing director Ed Mills joins Morning Brief to discuss this development and its implications.

Mills observes that markets have been "shockingly resilient" despite global unrest. Notably, oil prices (CL=F ,BZ=F), which would typically be most directly impacted by such events, have shown minimal reaction.

"There are a lot of unknowns ahead and Israel will absolutely respond. They cannot let hundreds of missiles going towards their country be met without a response," Mills states. However, he notes that the nature of Israel's response remains "uncertain."

While the next steps in this Middle Eastern conflict depend on various players, Mills foresees Israel conducting a direct strike on Iran. He suggests that this escalation might paradoxically lead to deescalation, which could be very positive for markets — though US involvement remains "a wildcard."

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This post was written by Angel Smith