President Donald Trump’s long-standing ability to soothe volatile financial markets through social media diplomacy appears to be fracturing. Despite recent claims of progress in negotiations with Tehran, Brent crude oil surged 3.3% on Friday to exceed $111 per barrel, while global equity markets continued a sharp descent.
The market’s refusal to rally follows a post by Mr. Trump on Truth Social asserting that talks with Iran were “going very well.” Investors, however, remain focused on the physical reality of the Strait of Hormuz, a critical energy artery that remains largely obstructed, threatening 20% of the world’s oil supply.
The current market indifference marks a stark departure from earlier this month. On March 8, oil prices spiked to $120 after the President suggested high energy costs were a necessary price for global safety. Conversely, prices plummeted 15% last Monday following a promised five-day suspension of military threats.
That “jawboning” effect has now stalled. Current indicators reflect a deepening crisis:
- Nasdaq Composite: Down 10% since the onset of the conflict.
- S&P 500: Plunged to a six-month low on Friday.
- FTSE 100: On track for its worst month since the 2020 pandemic, dropping nearly 9%.
Financial analysts have coined the term “Nacho” trade—short for “Not Actually Changing Hormuz Opening”—to describe the market’s new cynical stance. Jordan Rochester, executive director at Mizuho Bank, noted that the President’s 10-day extension of negotiations offers no immediate solution to the naval blockade.
“The market has a higher sense of confidence this war will continue for ‘at least’ 10 more days,” Rochester stated, noting that diplomacy rarely concludes ahead of schedule.
Deutsche Bank analysts echoed this sentiment, observing that a “risk premium” is now being baked into prices before weekends to hedge against potential escalations while markets are closed.
There is growing evidence that the administration’s diplomatic overtures are reactions to domestic economic pain rather than geopolitical breakthroughs. A Deutsche Bank index monitoring pressure on the White House—combining approval ratings, inflation, and bond yields—hit a record high this week.
Michael Brown, an analyst at Pepperstone, pointed out that the President’s latest optimistic update arrived just 11 minutes after the S&P 500 closed its worst session since the conflict began. “This shows that [the administration] is still very, very close to their pain threshold,” Brown noted.
While the President speaks of peace, the Pentagon is reportedly considering the deployment of 10,000 additional troops, supported by fighter-jet squadrons and armored vehicles, to the region. This military buildup, contrasted with Iranian intransigence, suggests that the window for a diplomatic resolution is narrowing.
