A financial newsletter from Anna Szymanski examines how President Trump’s social media activity has created unprecedented volatility in global markets during the ongoing Iran crisis.
The power of presidential social media posts has reached new heights, with a single message from Trump on Truth Social capable of moving trillions of dollars in global assets. When the president posted on Monday about “very good and productive” discussions with Iran, financial markets experienced dramatic reversals across multiple sectors.
Trump’s announcement that he would extend his original 48-hour ultimatum to Iran regarding the Strait of Hormuz to five days triggered massive market movements. Oil prices dropped over 10%, global equities surged, the dollar declined, bond yields decreased, and gold prices climbed. However, these dramatic shifts proved temporary.
The president attempted to recreate Monday’s market impact on Thursday with mixed results. Following a challenging trading session that saw the Nasdaq fall 2% into correction territory and Brent crude rise nearly 6% to exceed $108 per barrel, Trump announced another deadline extension to April 6 at 8 PM EDT, stating negotiations with Tehran were progressing “very well.”
This time, market reactions were more muted. U.S. stocks only slightly reduced their losses, and oil prices merely stabilized rather than plunging. By early Friday, crude was climbing again with Brent topping $109 per barrel, while S&P futures returned to negative territory.
Asian markets, particularly vulnerable to energy supply disruptions, continued declining. South Korea’s KOPSI index dropped nearly 4% on Friday, reflecting regional concerns about the conflict’s economic impact.
The diminishing influence of Trump’s posts may stem from contradictory information emerging from both capitals. While Trump claims Iran requested a seven-day extension, Wall Street Journal sources indicate mediators deny any such request was made. Tehran has reportedly rejected Trump’s 15-point peace proposal, and the U.S. is considering deploying an additional 10,000 troops to the Gulf region according to media reports.
This uncertainty leaves investors facing two vastly different scenarios: either dramatic military escalation or a negotiated settlement within weeks. The challenge of pricing such divergent outcomes has created significant market instability.
Financial asset behavior during this crisis has defied some traditional expectations. Both Treasury bonds and gold have weakened since the conflict began February 28, surprising many analysts who typically view these as safe-haven investments during geopolitical turmoil.
The Treasury decline aligns with inflation concerns and expectations of Federal Reserve policy tightening, supported by centuries of financial precedent. Recent poor debt auction results suggest additional challenges ahead for the $30 trillion Treasury market.
Gold’s weakness has particularly surprised investors, potentially signaling a shift in safe-haven asset preferences. Meanwhile, private credit markets face their own pressures, with Ares Management and Apollo Global Management recently limiting investor withdrawals from private credit funds following increased redemption requests.
Paradoxically, U.S. equities may be emerging as the preferred refuge asset. Despite volatility from geopolitical tensions and concerns about artificial intelligence spending, several major banks have raised their S&P 500 forecasts based on expectations of strong earnings growth.
Oil futures markets appear optimistic given the scale of supply disruption, potentially reaching 20 million barrels daily, and extensive damage to energy infrastructure. Investors seem to be betting on a quick conflict resolution and full Strait of Hormuz reopening, but this optimistic pricing may ironically make continued closure more likely.
Trump may have initiated the Iran conflict believing America’s domestic oil production would shield the country from energy price shocks. However, with U.S. gasoline prices approaching $4 per gallon, this strategy appears problematic.
Despite Americans being arguably better positioned than ever to handle $100-per-barrel oil, public approval remains low. A recent Reuters/Ipsos poll shows only 29% approve of Trump’s economic management, his worst rating on this issue to date.
Natural gas markets may face greater disruption than crude oil due to inflexible supply chains, limited storage capacity, and difficult infrastructure repairs. This particularly threatens gas-dependent Europe, which may need to scale back ambitious climate initiatives.
Conversely, the crisis could accelerate Asia’s energy transition, especially electric vehicle adoption, benefiting China’s dominant EV industry.
Trump has postponed his planned Beijing meeting with President Xi Jinping from next week to mid-May, suggesting he expects the conflict to largely conclude within six weeks. For investors and those affected by the war, that timeline may seem distant.
The newsletter concludes with weekend reading recommendations from various Reuters columnists covering topics from global interest rates to Chinese electric vehicles and Middle East shipping risks.
