Good Friday, Bad War — Iran Hits Kuwait, US Destroys Tehran Bridge, Markets Dark Until Deadline Day

The stock market is dark. The war is not.

Good Friday has the US equity market closed for the day, the bond market shutting at noon, and no price discovery until Monday morning. That’s the same Monday when the April 6 energy infrastructure strike deadline expires at 8 PM ET. Investors get to spend the entire Easter weekend watching a war escalate with no ability to hedge, rebalance, or exit.

Both Sides Are Now Hitting Civilian Infrastructure

Today is Day 35 of the war, and the escalation ladder took another ugly step in both directions.

Iran struck Kuwait — again. At dawn, Iranian drones and missiles hit a water desalination plant and the Mina Al-Ahmadi oil refinery in Kuwait, triggering a fire at the refinery and damaging desalination components. This follows the March 30 strike that killed an Indian worker at a Kuwaiti power and desalination plant. Iran also fired missiles at Israel and Gulf states, with 12 people injured in the UAE from intercepted missile debris.

Kuwait is not a combatant. It’s a small Gulf state with a population that depends on desalinated water for survival. Targeting desalination infrastructure isn’t strategic signaling — it’s an attack on a civilian population’s water supply. The IRGC denied responsibility and blamed Israel, but Kuwaiti authorities attributed the strikes to Iran.

The US destroyed Iran’s tallest bridge. US and Israeli forces struck the B1 bridge connecting Tehran to Karaj, Iran’s tallest bridge and a major transport artery inaugurated earlier this year. The strike killed at least 8 people and wounded 95 — families had gathered nearby for Nature Day celebrations. The Pentagon called it “a planned military supply route for sustaining Iran’s ballistic missile and attack drone force.” Over 100 law experts signed a letter warning that the threatened infrastructure strikes could constitute war crimes.

Then Trump posted on Truth Social: “Our Military, the greatest and most powerful (by far!) anywhere in the World, hasn’t even started destroying what’s left in Iran. Bridges next, then Electric Power Plants!”

That’s not a military strategy communique. That’s a countdown. Bridges first (today), power plants next (April 6).

Iran Claims Second F-35 Shootdown

The IRGC claimed it shot down a second US F-35 fighter jet using “a new, advanced defence system.” The Pentagon has not confirmed. The first claimed F-35 loss on March 23 was eventually confirmed by wreckage footage, though the US attributed it to a mechanical issue.

If confirmed, this matters beyond the aircraft loss. The F-35 is supposed to be the cornerstone of US air dominance — an “unkillable” stealth platform. Two losses in 11 days, whether from enemy fire or not, undermines the assumption of cost-free air superiority that the entire strike campaign depends on.

The Jobs Report Nobody Will Trade

The March nonfarm payrolls came in at +178,000 — triple the 57,000 consensus. Unemployment fell to 4.3% from 4.4%. Average hourly earnings rose 3.5% year-over-year. Healthcare added 76,000 jobs. Construction and transportation/warehousing drove the rest.

This is a genuine positive surprise. February’s -133,000 (revised down from -92,000) looked like the labor market was cracking. March says: not yet. The headline numbers are resilient. The surface is holding.

But the subtext is less encouraging:

• Long-term unemployed (27+ weeks) held at 1.8 million, up 322,000 over the past year
• Federal government employment continued to decline — DOGE cuts are showing up in the data
• Wage growth at 3.5% is below the pace needed to keep up with oil-driven inflation at current energy prices
• The hiring rate remains at 3.1% — the lowest since COVID. People aren’t getting fired (yet), but nobody’s hiring.

And here’s the cruel wrinkle: the market can’t respond. Good Friday means no equities trading. The jobs number lands into a vacuum. Traders will have all weekend to digest it alongside escalating war headlines, and the first chance to trade is Monday morning — hours before the April 6 deadline.

The Four Warning Signs

Motley Fool flagged that four warning signs are flashing simultaneously for the first time since the pre-2022 crash (which wiped $7 trillion):

1. CAPE ratio at 39.7 — second-highest in 150+ years of data (only 1999-2000 was higher)
2. Consumer confidence at third-lowest reading ever — below the starting level of every recession since 1980
3. S&P 500 down 8%+ from January highs — worst stretch in over a year
4. Oil up 50%+ in five weeks — Brent from $72 to $112

The last time all four coincided: 2008. Before that: 2022. Both preceded major drawdowns.

The Weekend Gap

Let me be blunt about the risk setup heading into Monday:

What’s priced: The S&P closed at 6,582.69 on Thursday, having recovered from a 1.5% futures selloff on the back of the Iran-Oman Hormuz protocol. The market ended the week thinking there might be a diplomatic path. VIX at 25.57. Oil at $111.54 WTI. The 200-DMA gap is ~60 points.

What happened since the close: The US destroyed Iran’s tallest bridge, killing civilians. Iran struck Kuwait’s water infrastructure and oil refinery. Iran fired at Israel and Gulf states. Trump warned the US “hasn’t even started.” Iran claims a second F-35 kill. Over 100 legal scholars warned of potential war crimes. And the jobs report, while strong, won’t move anything until Monday.

What happens Monday: Markets reopen into all of this — plus whatever happens over the weekend — and then the April 6 deadline expires at 8 PM that evening. If the US follows through on striking Iran’s power grid, Iran has explicitly promised to “completely” close the Strait of Hormuz and escalate strikes on Gulf infrastructure.

This is the widest weekend risk gap since the war began.

Historical Context: 1973 Yom Kippur War / Oil Embargo

Today’s developments are the clearest structural parallel to the 1973 analog since we first referenced it on March 16. The war is spreading beyond the original combatants. In October 1973, OPEC’s embargo weaponized oil against nations that supported Israel — punishing countries that weren’t fighting. Today, Iran is physically striking the infrastructure of Gulf states that aren’t in the war. Kuwait is getting its desalination plants bombed. UAE residents are being injured by missile debris. The mechanism is different (missiles vs. embargo), but the dynamic is identical: the war’s economic damage is being deliberately extended to non-combatants.

Similarities:

• War damage deliberately spread to non-combatant nations — Iran hitting Kuwait/UAE infrastructure mirrors the 1973 embargo punishing oil-importing allies of Israel
• Both sides escalating to civilian infrastructure (bridges, power plants, desalination, refineries) with no red lines left
• Diplomatic channels failing while violence accelerates — in 1973, Kissinger’s shuttle diplomacy produced hope rallies that reversed; today’s Hormuz protocols are embryonic while bridges are being destroyed
• Oil at crisis levels with no resolution mechanism — WTI $111.54 vs $72 pre-war (56% increase); Brent hit $11.65 in Jan 1974 vs $3.29 pre-embargo (254% increase)
• Strong jobs data masking underlying deterioration — 1973 unemployment was low even as the economy was sliding into recession
• Central bank trapped — Fed at 3.5-3.75% with core PCE revised up to 2.7%, can’t cut into an oil shock, can’t hike into a weakening economy

Differences (and which way they cut):

• Valuations dramatically higher today (CAPE ~39 vs ~18) — more downside risk if conviction breaks
• 1973 embargo could be lifted by political decision; Hormuz requires mine-clearing AND now both sides are physically destroying infrastructure — harder to resolve, cuts against us
• Iran is attacking water infrastructure in neutral nations — a dimension the 1973 embargo didn’t reach — escalation risk higher than analog suggests
• Information/risk gap compressed into a holiday weekend with no market access — liquidity risk on Monday open has no 1973 parallel

Strategy performance during the analog window (Oct 6 1973 - Mar 18 1974):

Strategy	Typical 5M Return	Typical 5M Vol	Analog Return	Analog Max DD	Analog Vol
Buy & Hold	+4.5%	13.3%	-11.0%	-18.6%	19.6%
200 SMA Trend	+1.8%	10.6%	-4.5%	-5.5%	5.6%
12M Momentum	+2.7%	11.3%	+0.0%	0.0%	0.0%
RSI Mean Reversion	+0.0%	5.9%	-2.8%	-10.1%	17.6%

Interpretation: Momentum went to cash and stayed there — zero return, zero drawdown. That’s what disciplined systematic exit looks like during a supply shock. The 200 SMA trend strategy’s -4.5% and -5.5% max DD came from whipsaws during the hope-and-reversal cycles that are now happening on a compressed daily timeline. Today, our systems are out. The S&P is 60 points below the 200-DMA. No signal to enter. The weekend’s events — bridge strikes, Gulf infrastructure attacks, approaching deadline — all confirm that the war is escalating, not resolving. The system doesn’t need to predict Monday. It needs to not be in when Monday arrives.

Why CRITICAL Holds — And Why Monday Could Be Worse

The risk environment is materially worse than 24 hours ago:

1. The war is spreading to neutral nations. Iran struck Kuwait’s water and oil infrastructure for the second time in four days. UAE residents injured by missile debris. This is no longer a US-Iran bilateral conflict.

2. Both sides are destroying civilian infrastructure. The US hit Iran’s tallest bridge (8 dead, 95 wounded). Trump warned that bridges are first, power plants next. Iran responded by striking Gulf refineries and desalination plants. The escalation ladder has no visible rungs left before power grid attacks.

3. The April 6 deadline arrives on market reopening day. There is no separation between the liquidity event (markets reopening after a 3-day weekend of escalation) and the catalyst event (deadline expiry at 8 PM). Monday morning’s open will price the entire weekend at once.

4. No ceasefire framework exists. Iran rejected the 15-point plan. Kharazi (the injured diplomat) can’t negotiate. Iran denies talks are happening. The Iran-Oman Hormuz protocol is embryonic and Iran’s military actions today directly contradict its diplomatic signals from yesterday.

5. The Hormuz hope trade may die Monday. Yesterday the market rallied on Iran-Oman’s Hormuz monitoring protocol. Today Iran struck Kuwait’s oil infrastructure. If the April 6 deadline passes and the US hits power plants, Iran has promised complete Hormuz closure. The diplomatic track and the military track are on a collision course.

What would bring us to RED: April 6 deadline extended by at least two weeks (not just days), oil sustaining below $100, S&P reclaiming the 200-DMA, credible ceasefire framework acknowledged by both sides. Multiple must coincide.

What would make this worse: US strikes Iranian power grid after April 6, Iran follows through on “completely” closing Hormuz, Gulf state infrastructure attacks intensify (especially Saudi Arabia), oil above $120, VIX above 35, S&P gaps below 6,400 on Monday’s open. Any single one.

Key dates:

• Today (Apr 3) — Good Friday, equity markets closed, bond market closes at noon ET. War continues.
• Apr 4-5 (Sat-Sun) — Easter weekend. No markets. Potential for diplomatic activity or further escalation before Monday.
• Apr 6 (Monday) — Markets reopen. Strike pause on Iranian energy infrastructure expires 8 PM ET — 3 days away. The biggest single-day risk event of the war.
• Apr 9 — Q4 GDP final revision
• Apr 28-29 — FOMC meeting

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Sources: Al Jazeera — Kuwait desalination plant, oil refinery hit by missile and drone strikes, NBC News — US strike destroys Iran’s B1 bridge, Euronews — Strike hits major Iranian bridge, killing at least 8 civilians, Express Tribune — Iran claims second F-35 shootdown, US News — Iran launches missiles at Israel and Gulf states, PBS — Iran threatens to completely close Strait of Hormuz, CBS News — Iran military warns Hormuz will be completely closed, Yahoo Finance — March 2026 jobs report: 178,000 payrolls added, Indeed Hiring Lab — March 2026 jobs report analysis, Motley Fool — 4 warning signs flashing at once, CNBC — Trump threatens Iranian infrastructure, Al Jazeera — Iran condemns US-Israeli moral collapse, CNN — Trump warns US hasn’t even started, Washington Post — Iran launches missiles at Israel and Gulf states, Al Jazeera — UK-led coalition of 40 countries vows Hormuz action, CNBC — Iran and Oman Hormuz protocol