Stock and oil futures spiked in unusual trading activity minutes before President Trump announced a market-moving update on Iran on Monday morning. At approximately 6:50am in New York, S&P 500 e-mini futures on the CME registered a sharp and unusual spike in volume, and West Texas Intermediate oil crude futures saw a sudden surge in activity at nearly the same moment. At 7:05am, Trump posted on Truth Social that the U.S. had engaged in talks with Iran and was halting planned strikes on Iranian power plants and energy infrastructure. S&P 500 futures surged more than 2.5% before the opening bell, while oil prices plunged, with West Texas Intermediate futures falling nearly 6% after Trump's announcement. The coordinated moves across equities and crude meant that anyone who had bought stock futures and sold or shorted oil contracts just minutes earlier would have locked in substantial gains, a sequence raising questions about whether someone may have acted on advance knowledge of Trump's announcement.
Global stock markets experienced large fluctuations after Donald Trump's sharpened statements about Iran over the weekend. The Stockholm stock exchange turned upward and was up 1.3 percent around half past one, with its broad index rising from about minus 3% to plus 1.5% after Trump's announcement. The S&P 500 rose 1.8% in initial trading, then fell back to close up 1.2%. The S&P 500 rose 74.52 points to 6,581.00, the Dow Jones Industrial Average finished with a climb of 631, or 1.4%, to 46,208.47, and the Nasdaq composite jumped 299.15, or 1.4%, to 21,946.76. Treasury yields eased, with the yield on the 10-year Treasury falling to 4.35% from 4.39% late Friday. Asian benchmarks mostly rebounded Tuesday, echoing cautious relief after Trump said the U.S. has talked with Iran about a possible end to their war, with Japan's Nikkei 225 adding 1.1% in morning trading and Australia's S&P/ASX 200 rising 0.5% while South Korea's Kospi jumped 2.2%. Benchmark U.S. crude gained $2.02 to $90.15 a barrel and Brent crude added $1.41 to $101.35 a barrel, though on Wall Street, the price for a barrel of Brent crude fell 10.9% to settle at $99.94 after Trump's announcement. Shares in Rolls-Royce helped lead London’s blue-chip index higher as markets were buoyed by hopes of peace talks in the Middle East, with its stock soaring as much as seven per cent on open to 1,215.00p, and the FTSE 100 and other stock market indexes rebounded after Trump hinted the US-Iran war will come to an end 'very soon'.
Over the weekend, Trump threatened to 'obliterate' Iran’s power plants if it doesn’t open up the Strait of Hormuz within 48 hours. Shipping traffic has been severely curtailed in the Strait of Hormuz, a critical chokepoint where a fifth of the world's traded oil passes through during peacetime. Energy Minister Chris Wright wrote on X that the U.S. escorted an oil tanker through the Strait of Hormuz on Tuesday, but the post was removed an hour later, after which oil prices fell to $80 per barrel, down from $119 at Monday's close. The U.S. only relies on the Persian Gulf for a fraction of the oil it imports, but oil is a commodity and prices are set in a global market, making disruptions there impactful worldwide.
Attacks on Iranian energy infrastructure are being postponed.
The term 'Taco-trade' was coined by Financial Times journalist Robert Armstrong to describe a recurring pattern where markets fall on harsh political statements and rise after rhetoric softens. Stock markets have shown a clear weekly pattern since the Iran war began, rising Monday-Wednesday and falling back Thursday-Friday. Stocks have been broadly sliding since the war began, with indexes often rising and falling sharply along with statements from Trump about the direction of the war. Just on Monday, the S&P 500 briefly neared a 10% drop from its record, a threshold professional investors call a 'correction', but the S&P 500 gained ground Tuesday and Wednesday on hope that the war could end soon.
March was the worst stock market month for the Stockholm stock exchange since the pandemic hit in March 2020. Stocks shook off an early stumble to finish with slim gains on Wall Street Thursday, and closed out their first winning week since the start of the Iran war. The early decline for stocks was driven by a surge in oil prices following a national address late Wednesday from President Donald Trump, who vowed the U.S. will continue to attack Iran and failed to offer a clear timetable for ending the conflict in the Middle East. Oil prices eased slightly during the day, but still remain elevated well above $100 per barrel, with a barrel of U.S. crude oil rising 11.3% to $111.54 and nearing $114 at one point, while the price of Brent crude, the international standard, jumped 7.8% to $109.03 per barrel. The S&P 500 rose 7.37 points, or 0.1%, to 6,582.69, and several days of solid gains this week helped it notch a 3.4% gain for the week, its first weekly gain since the conflict started. The Dow Jones Industrial Average fell 61.07 points, or 0.1%, to 46,504.67, but both it and the Nasdaq composite notched weekly gains. Crude oil prices have been the main force behind the sharp swings for stocks globally, and they had been sliding back toward $100 per barrel prior to Trump's address on Wednesday.
Toyota Motor Corp.'s stock price gained 1.1% after it announced investing $1 billion in its Kentucky and Indiana auto plants. Airlines and other travel-related companies were among the biggest losers on Thursday, while Tesla fell 5.4% after a report showing that sales over the past three months fell short of analysts' expectations. Several big technology stocks gained ground to help counter losses elsewhere in the market, and Treasury yields remained relatively steady in the bond market.
Iran was 'begging' for a deal but described reaching one as 'irrelevant' to America’s timetable.
These market fluctuations affect small savers in Sweden, and Wall Street is worried that higher energy prices are adding to already stubbornly high inflation.
The US Securities and Exchange Commission and CME Group have not commented on the activity. Some analysts cautioned that algorithmic or macro-driven trading strategies can generate sudden flows without a clear headline trigger.
On the crypto-based platform Polymarket, a cluster of newly created accounts placed unusually large wagers over the weekend on the likelihood of a US-Iran ceasefire.
The United States may end its military operation in the Middle East 'within two weeks, maybe three'.
Iran denied that talks took place, contradicting Trump's claim that the U.S. had engaged in talks with Iran. This disagreement between U.S. and Iranian accounts creates uncertainty about diplomatic progress and the basis for market movements, potentially affecting investor confidence and geopolitical assessments.
Trump advisers are urging him to find an Iran exit ramp, fearing political backlash.
It remains unknown whether the unusual trading activity before Trump's announcement involved insider trading or was driven by algorithmic strategies, and the exact timeline and content of any diplomatic talks between the U.S. and Iran are unclear given the conflicting accounts. The reasons behind Energy Minister Chris Wright's removal of his post about escorting an oil tanker through the Strait of Hormuz have not been disclosed, and the specific impact of Trump's statements on long-term market stability and inflation, beyond immediate fluctuations, is uncertain. The extent to which market patterns like the 'Taco-trade' or weekly rises will persist amid ongoing geopolitical uncertainty is also not yet clear.