Trump’s latest comments have added pressure on Iran while negotiations continue, keeping both escalation and a potential deal in play.
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Over the weekend, he set a new deadline for Tuesday evening for reopening the Strait of Hormuz and warned that energy infrastructure could be targeted if talks break down. At the same time, negotiations are still ongoing, with several countries pushing for a temporary ceasefire. That combination matters—because it keeps risk elevated without locking markets into a single outcome.
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You can see that in how assets are trading.
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Oil remains elevated after rising more than 50% since the conflict began, gasoline prices have moved back above $4, and shipping through Hormuz is still significantly below normal levels. But at the same time, equities have started to stabilize and even rebound modestly on signs that talks are still active. That’s not a market pricing escalation alone—it’s a market balancing disruption against the possibility of resolution.
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Trump’s address last week added to that tension. He described the conflict as nearing completion, while also repeating that further strikes remain on the table if a deal isn’t reached. That kind of mixed signaling doesn’t resolve uncertainty—it extends it.
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The initial liquidation phase appears to have run its course, but there’s no clear conviction behind the rebound. Volatility has eased off recent highs, flows have stabilized, and leadership has become less one-sided, which typically happens after the first leg of a selloff. But markets are still reacting to headlines rather than trending on fundamentals.
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If the Strait remains constrained and oil stays elevated, the current setup holds: energy and commodities remain supported by supply disruption, and inflation pressure stays in focus.
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If conditions begin to ease—even partially—the pressure points reverse, and a different set of trades starts to matter:
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• Rates / Duration (TLT): Lower oil would ease inflation pressure and reduce upward pressure on long-term yields.
  • High-duration equities that typically benefit from falling yields include growth/tech names like MSFT, NVDA, AAPL, as well as rate-sensitive software (IGV ETF)
  • Homebuilders (DHI, LEN) and REITs (PLD, AMT) also tend to respond positively to lower rates
  • Utilities (NEE, DUK) often act as bond proxies and benefit from declining yields
• Biotech (XBI): Has held up relatively well and tends to benefit from improving liquidity and lower discount rates
  • Examples: VRTX, REGN, MRNA
• China / EM (FXI, EWZ): Stabilizing global growth and lower energy stress support flows
  • China large caps: BABA, JD
  • Brazil/commodities: VALE, PBR
• Consumer (XLY): Lower fuel costs and easing inflation support spending
  • Discretionary: AMZN, TSLA, HD
  • Travel/leisure (fuel-sensitive): DAL, UAL, RCL