In the time it takes to walk from your car to your desk, President Donald Trump added $1.7 trillion to stocks and pushed the price of oil down $17, or about 15%. By the time you drink your coffee, Iran has reportedly called him a liar, and half the gains are lost.
That’s an average Monday morning for a very market-focused executive in the fourth week of the war.
Posting in capital letters on Truth Social at around 7 a.m. ET, Trump said the United States and Iran had “very good and productive conversations” over the weekend toward a “complete and complete resolution” of hostilities in the Middle East. He ordered the Pentagon to suspend all attacks on Iran’s power plants and energy infrastructure for five days.
According to Reuters, Washington has informed Israel of the talks, and Israel is expected to follow the United States in suspending attacks on Iranian power plants.
It comes after Trump issued an ultimatum to Iran on Saturday night, calling on the regime to reopen the Strait of Hormuz or face bombing of its power grid. Now, he appears to be buying time into the work week and using the weekends as a buffer before taking the next step.
S&P 500 futures fell nearly 4% from their lows, with Brent crude falling from $109 to a low of $92 before partially recovering, with West Texas Intermediate hitting $88.70, its lowest since the war began.
Iranian state media quoted an unnamed “senior security official” in a post on Telegram as saying the talks never took place. The official called it a ploy to manipulate the market and said there were no channels of communication between the two countries. As of this writing, no Iranian official has publicly confirmed or denied Trump’s claims.
Trump told Fox Business that talks did take place on Sunday night, with the participation of special envoys Jared Kushner and Steve Witkoff and being facilitated by Egypt, Pakistan and Turkey. He said Iran “very much wants” to reach a deal.
“We have major consensus – I would say almost all consensus. Maybe that hasn’t been communicated yet,” he added, joking that Iran needed “better PR people.”
Wall Street has a word to describe it all, by financial times Columnist Robert Armstrong last May: TACO, or Trump has always been timid. The acronym describes Trump’s habit of issuing catastrophic threats, causing markets to panic and then turning the tide before economic pain sets in. This trade made money for investors who bought every dip because they believed there was a limit to how much damage Trump would tolerate.
This pattern was seen in his trade war last year, where he announced prohibitively high tariffs but later struck a deal. That scenario played out too early this year in Greenland, where Trump spent weeks threatening to seize the island, only to reach a vague underlying agreement.
