US President Donald Trump's recent comments regarding Iran have triggered significant market volatility, with Dow Jones futures plunging 0.88% to below 46,400 during European hours on Thursday, ahead of the US regular market open [1]. S&P 500 and Nasdaq 100 futures also fell sharply, dropping 1.1% and 1.4% to below 6,550 and 23,900, respectively [1]. The sell-off in US equity futures was attributed to Trump's warning in a national address that Washington would hit Iran 'extremely hard' within two to three weeks, even suggesting the country could be pushed into the 'Stone Ages' [1].
In contrast, West Texas Intermediate (WTI) oil prices surged over 7% after two days of losses, trading around $101.10 per barrel during European hours on Thursday [2]. The spike in crude prices was driven by intensified supply concerns following Trump's remarks, which failed to convince markets of a swift resolution to the conflict with Iran [2]. Trump stated that Iran is no longer a significant threat but warned that military strikes could intensify over the coming weeks, raising fears of broader damage to energy infrastructure across the Gulf region [2]. Additionally, an oil tanker leased to QatarEnergy was struck by an Iranian cruise missile in Qatari waters on Wednesday, further escalating supply risks [2].
Iran responded by disputing Trump's assertion that it had sought a ceasefire, maintaining that the Strait of Hormuz will remain closed and emphasizing that the critical waterway remains under the control of the IRGC Navy [2]. The head of the International Energy Agency (IEA) warned that supply disruptions are expected to begin impacting Europe’s economy in April, noting that the region had previously been cushioned by cargoes secured prior to the outbreak of the conflict [2].
Despite the sharp drop in futures, Wednesday’s regular US session saw Wall Street extend its advance as oil prices eased, with the Dow Jones rising 0.48%, the S&P 500 gaining 0.72%, and the Nasdaq 100 climbing 1.16%, supported by strong performances in Alphabet and other major stocks [1]. Travel, mining, and technology shares moved higher, led by SanDisk Corp., which jumped around 9%. Gold miners, including AngloGold Ashanti and Newmont, also advanced as bullion prices posted a fourth consecutive daily gain [1].
US equities were supported as investors reassessed the Federal Reserve’s policy outlook amid evolving geopolitical risks, growth uncertainties, and persistent inflation pressures. The median dot plot continues to signal one 25-basis-point rate cut later in 2026, while some policymakers now expect no rate cuts this year [1].
CONCLUSION
President Trump's aggressive stance on Iran has led to heightened risk aversion in equity markets and a surge in oil prices, reflecting investor concerns over potential supply disruptions and broader geopolitical instability. The immediate market reaction is negative for equities and positive for commodities, with analysts warning of economic impacts in Europe if supply issues persist. Forward-looking statements suggest continued volatility as geopolitical risks and central bank policy remain in focus.