Following President Donald Trump's address regarding the ongoing Iran war, financial markets reacted sharply, with oil prices soaring and stock futures plunging. Trump stated that the war would end 'shortly,' but also pledged to conduct additional 'extremely hard' strikes on Iran over the next two to three weeks, offering no structured path to a ceasefire or a plan to reopen the critical Strait of Hormuz. The president remarked, 'The Strait will open up naturally,' and emphasized that military operations would continue until U.S. objectives were 'fully achieved' [1].
Stock futures dropped significantly Thursday morning: S&P 500 futures fell 1.7%, Nasdaq 100 futures tumbled 2%, Dow futures slid 600 points, and Russell 2000 futures dropped more than 2% [1]. Oil prices began rising during Trump's speech Wednesday night and continued their ascent, reversing two days of declines. U.S. crude oil surged 10% to $110 per barrel, while Brent crude jumped 8% to over $109 per barrel. Prices for heating oil and natural gas also increased. The national average price per gallon of unleaded gas reached $4.08, up from $2.98 before the war began [1].
UBS Global Wealth Management CIO Paul Donovan noted, 'The markets wanted something different,' and warned that U.S. escalation, even if short-lived, risks an Iranian response that could threaten further infrastructure damage in the Gulf [1]. Meanwhile, U.K. Foreign Secretary Yvette Cooper hosted a video call with 35 nations, including Gulf states, to discuss reopening the Strait of Hormuz, but the United States did not attend. Cooper indicated that easing the war would be necessary before deploying collective defensive military capabilities [1].
U.S. government bonds also fell, pushing yields higher. The 10-year Treasury yield rose to around 4.37%, and the average 30-year fixed mortgage rate increased to 6.45%, up from 5.99% the day before the war began [1].
CONCLUSION
President Trump's address on the Iran war triggered a surge in oil prices and a broad sell-off in stock futures, reflecting heightened market uncertainty. The lack of a clear ceasefire plan and ongoing escalation have raised concerns about further disruptions in the Gulf region and energy markets. Investors are bracing for continued volatility as geopolitical tensions persist.