• As the Iran War continues, gas prices remain high — a real strain for consumers.
• The conflict has kept diesel, crude oil, and gas prices high; inflation is eating up pay hikes.
• As America heads into midterms, it's a hard affordability position for President Donald Trump.

It's expensive out there: Gas prices have been stuck at over $4 a gallon for more days this year than any other. The war in Iran shows no signs of cooling off. Inflation is swallowing any raises you might have gotten at work.

It's a recipe for a challenging midterm cycle for President Donald Trump, who faces an affordability crisis at home that's not going away — and a far-away war that's only making costs go up.

The volatility surrounding the contested Strait of Hormuz, a key oil and gas transit waterway, has hit American consumers hard.

Since the Iran war first kicked off in February and the Strait was subsequently closed, gas and oil prices have skyrocketed. Diesel prices have hit record-breaking highs in recent weeks. That paints a dreary picture for Americans struggling with high costs, who likely won't feel any relief at the pump in the near future — especially as more potential military action looms.

Trump has highlighted the broader goals of the war and argued that the increase in gas prices would be transient. In an October 8 Truth Social post, he wrote, "a temporary increase in the price of Gasoline is a small price to pay for Iran not having a Nuclear Weapon."

While the US military has not carried out airstrikes against Iran directly in several months, it has kept a significant force presence in the Middle East, including more than a dozen warships, dozens of fighter jets, and thousands of sailors and Marines.

US forces in the region are maintaining a naval blockade against Iran, and since July, they have disabled four commercial ships that the Pentagon said were sailing in violation.

After the start of the war in February, crude oil prices soared and remain significantly higher than when Trump's second term began.

Tanker traffic through the Strait of Hormuz nearly ground to a halt early in the Iran war, severely disrupting a waterway that normally carries about a fifth of the world's oil supply. Shipments have since recovered substantially but remain below prewar levels.

The Trump administration said it aims to alleviate issues related to oil. "The President wants to see prices at the pump fall and continues to take historic measures to alleviate temporary disruptions as oil flowing through the Strait of Hormuz approaches pre-conflict levels," White House spokeswoman Taylor Rogers said.

Vessels carrying oil and other products have continued to take fire from both sides, putting more pressure on commerce traveling through the area. US forces have carried out additional strikes on Iranian-linked targets. The Pentagon said they have destroyed 10 tankers tied to the Islamic Revolutionary Guard Corps, or IRGC, since July.

Meanwhile, several merchant ships have come under attack in and around the Strait of Hormuz this month, according to the Royal Navy-affiliated United Kingdom Maritime Trade Operations Center. US Central Command, which oversees American military operations in the Middle East, has attributed some of these strikes to Iran.

The ripples of volatility in oil prices are showing up at the pump. Long gone are the days of gas stations touting below-$3 prices; prices are still hovering in the mid-$4 range. High gas prices are even tamping down spending among higher-income consumers, and soaring costs have led to a rise in "hypermilers" — drivers who try to optimize and gamify their habits to get the best value per gallon.

Diesel prices in the US have spiked even more, up to around $6.18 per gallon, an over $2.50 increase over the year, per the Energy Information Administration. In California, diesel is hovering over $8 a gallon.

Those fuel and energy strains are pushing up costs across the economy. Inflation as tracked by the consumer price index increased to 3.7% year-over-year in September — higher than economists expected. That was driven in large part by soaring gas and energy prices, with energy rising by 20.4% year-over-year and gas by 34.2% in the same period.

Higher inflation has put pressure on the Fed and bond markets. In September, the central bank raised rates for the first time in three years to try to combat rising prices, with one more hike potentially coming by year's end. The 10-year Treasury yield, which influences borrowing costs for mortgages, auto loans, and credit cards, has surged since the war began, from below 4% at the end of February to a high of 5.31% this month. The 30-year mortgage has risen nearly in lockstep, going from just under 6% to 7.5% during the eight-month conflict.

For everyday Americans, all of these international strains amount to what is, essentially, a pay cut. Wage growth remains slow and steady, but, over the past few months, rising prices have outpaced pay increases. Inflation-adjusted wages have slumped since the start of the war, and have given up nearly all their gains since the start of Trump's second term.

When asked for comment, the White House highlighted that by some measures, earnings are still outpacing inflation. "Under President Trump, private sector workers have seen their wages continue to outpace inflation, with average annual earnings growing by more than $600," said White House spokesperson Matthew Middleton.

And, with midterm season in full swing, affordability is on the ballot for many voters. The current economic situation shows no immediate signs of changing — another blow for Trump, who's been on a quest to bring down gas prices.

There are growing signs that the US could be preparing for fresh military action against Iran. Another aircraft carrier strike group is sailing across the Pacific and is expected to enter the Middle East.

The Trump administration is also facing a resurgence in attacks from the Houthis, a rebel group in Yemen. In recent weeks, the Iran-backed rebels have seized key territory along the Red Sea, allowing them to threaten the Bab al-Mandeb Strait, another maritime chokepoint like Hormuz, and have ramped up missile strikes against Saudi Arabia.

The Houthis previously tormented Red Sea shipping, leading the Trump administration to launch a major bombing campaign last year that ended in a ceasefire. The rebels have since rearmed.

Any other disruptions there might be bad news for consumers, potentially bringing more price spikes across the many goods shipped through that chokepoint.

Last week, Palantir CTO Shyam Sankar mentioned something bizarre in an interview on CBS News. "So many AI researchers have started smoking as a way of signaling to other researchers how much they believe in AI," he said. Their thinking, he said, goes like this: "I believe so much in AI that it's going to cure cancer. So I'm showing you my chips are all in."

I laughed as I read the quote. It read like a headline in The Onion, mocking the blind optimism of the AI-pilled. But then I felt sad and worried for them. Are they smoking because they believe AI is saving the world, I wondered, or because they believe AI is ending it?

It's been an especially alarming few months here in San Francisco. OpenAI's bots went rogue and hacked another company, and then an Anthropic researcher quit, warning that AI could wipe out the human race. It seemed more believable to me that these researchers were smoking because they didn't think they'd be around for much longer — or at least freaked out about that possibility. I thought of the HBO show "The Leftovers," which features a doomsday cult that chain-smokes. Because they believe the world has ended, they don't mind obliterating their lungs. They're living as though they're already dead.

I asked a handful of people who work in AI and none of them knew anyone who had suddenly taken up cigarettes because of AI. So I don't think what Sankar observed is widespread. But in a story last month about tech founders who smoke, my colleague Henry Chandonnet quoted a guy who wasn't worried about his habit because he believed AI will soon cure lung cancer. Among the people I spoke to, a few recognized that underlying sentiment: AI's going to fix (or destroy) everything, so YOLO. Last year, my former colleague Rob Price reported on these attitudes. Some were spending down their savings. Others were taking dangerous drugs and having orgies. Last year, my former colleague Rob Price reported on these attitudes. Some were spending down their savings. Others were taking dangerous drugs and having orgies.

While AI boomers and doomers expect completely opposite outcomes, I've found it interesting that their very different beliefs often end up manifesting as the same behaviors. Smoke or don't smoke, it doesn't matter: The future is inevitable. In either case, they're relinquishing their fate to a humanity-ending or humanity-saving AI — and ignoring one of the most evidence-backed things they can do to live a healthy future. It's a kind of fatalism, believing that what you do won't change what happens next.

I see traces of that in so many corners of society. What's the point of studying, students say, if they're never going to be as good as ChatGPT at coding or math? What's the point of agonizing over a breakup text, people say, if a bot can write it for them? What's the point of working hard, employees say, if their companies are going to replace them with an agent? In a recent survey by Verasight, 78% felt that they had little or no say over how AI is being developed and regulated.

Even the people who have the most say don't seem to believe they do. Anthropic CEO Dario Amodei has issued increasingly grave warnings about the technology that he himself is creating. He has to keep going, he says, because if he doesn't, a less responsible steward of the industry will. Amodei and his peers sound as if they're utterly powerless in the face of an unstoppable god. If it's really that bad, couldn't they just pull the plug? "Saturday Night Live" captured the strangeness of it all in a recent sketch impersonating Amodei. "If we can pressure lawmakers to create guardrails," Jane Wickline's Amodei deadpanned, "we will be able to stop me."

We need people thinking seriously about the risks of these technologies, and we also need people dreaming big about the immense good they can bring. But neither of these outcomes is inevitable. As we entrust more and more of our work and our lives to AI agents, we shouldn't cede our own agency to them too. I'm not taking up smoking anytime soon.