In further evidence of escalating tensions between the United States (US) and  Iran-backed Houthi rebels in Yemen, a US defense official stated on Tuesday that the Houthi-controlled Yemen fired a land-based cruise missile, leaving a commercial vessel in flames in the Red Sea.

“US Navy vessel Mason arrived at the scene to offer assistance following the attack, no casualties reported,” the defense official added.

Houthis threatened to disrupt shipping in the Red Sea early Monday, having fired rockets on Friday at the US embassy in Baghdad

Market reaction

Risk sentiment remains tentative on the US Consumer Price Index (CPI) day, with geopolitical tensions running in the background. The S&P 500 futures, a risk barometer, is fluctuating between gains and losses while the US Dollar Index is consolidating recent gains near 104.00, as of writing.