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 by $17, or approximately 15%. By the time you got your coffee, Iran had reportedly called him a liar, and half those gains vanished.
This is the average Monday morning for a very market-oriented executive in the fourth week of war.
At approximately 7 a.m. ET, Trump posted in all-caps on Truth Social that the U.S. and Iran held “very good and productive conversations” over the weekend toward “a complete and total resolution” of hostilities in the Middle East. He ordered the Pentagon to pause all strikes on Iranian power plants and energy infrastructure for five days.
Washington had kept Israel informed of the talks, Reuters reported, and Israel is expected to follow the U.S. in suspending strikes on Iranian power plants.
That came after Trump issued an ultimatum to Iran Saturday night, calling on the regime to reopen the Strait of Hormuz or face bombardment of its power grid. Now, it appears he’s buying time for the workweek, and leaving the weekend as a buffer before any next move.
S&P 500 futures swung nearly 4% off their lows, Brent crude collapsed from $109 to a low of $92 before partially recovering, and West Texas Intermediate touched $88.70, its lowest point since the war began.
Iran’s state media reported that the talks never happened, citing an unnamed “senior security official” in a post on Telegram. The official called it a ploy to manipulate markets and said there’s no communication lines between the two countries. As of time of writing, no official from Iran has publicly confirmed or denied Trump’s claim.
Trump told Fox Business that talks did occur Sunday night, involving special envoys Jared Kushner and Steve Witkoff, facilitated by Egypt, Pakistan and Turkey. Iran wants a deal “badly,” he said.
“We have major points of agreement—I would say almost all points of agreement. Perhaps that hasn’t been conveyed,” he added, also joking that Iran needs “better public relations people.”
Wall Street has a word for all of it, coined by Financial Times columnist Robert Armstrong last May: TACO, or Trump Always Chickens Out. The acronym describes Trump’s habit of making catastrophic threats that cause market panic, then reversing course before economic pain can set in. The trade has minted money for investors who bought every dip, confident that Trump’s tolerance for damage had a ceiling.
The pattern was seen in his trade war last year as he announced prohibitively high tariffs only to reach a deal later. It played out in Greenland too early this year, when Trump spent weeks threatening to seize the island only to settle for a vague base agreement.
The Iran war is, theoretically, supposed to function differently: after all, it takes “two to TACO,” since Trump cannot just unilaterally end the war the same way he could unilaterally pull back sanctions.
Oil analyst Rory Johnston wrote on Monday that though the “base case” was that Trump would try to back out and declare victory, it won’t be that simple to bring down oil prices.
“Hormuz flow still hasn’t resumed and every day we’re shedding more oil from the system,” he wrote on X. “That’ll catch up—can’t jawbone 10 to 15 million barrels per day stock draws.”
It is unclear who Trump is even negotiating with on Iran’s side. He told Fox Business he’s dealing with the man who’s “most respected” in Iran, though “It’s a little tough — we’ve wiped out everybody.”
U.S.-Israeli forces have killed most of Iran’s top brass, including Supreme Leader Ayatollah Ali Khamenei, security chief Ali Larijani, and other senior leaders. When asked a few weeks ago whom Trump wanted to see replace the ayatollah, Trump said “everyone we had in mind is dead.”
The Jerusalem Post has reported that Trump’s actual interlocutor is Iranian parliament speaker Mohammad Bagher Ghalibaf.
Trump also said on Fox Business Monday that he and new Supreme Leader Mojtaba Khamenei—son of the late Ali Khamenei—would together be in charge of the Strait of Hormuz.
