11 minutes after the market closed! US stocks suffered their "worst day" since the Iran war, Trump "immediately" extended the "negotiation period" by 10 days.
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As the US stock market suffered its most intense sell-off in months amid concerns over escalating Middle East conflict, US President Trump announced just 11 minutes after Thursday’s close that he would extend the deadline for strikes against Iranian energy facilities by 10 days, in hopes of giving more room for ceasefire negotiations.
According to Xinhua News Agency and CCTV News reports, on Thursday the 26th, Trump posted on social media, saying that at the request of the Iranian government, the airstrikes on Iranian energy facilities would be postponed for another ten days, until 8 pm on April 6 Eastern Time.
According to CCTV reports, Trump emphasized that despite false and contrary statements by fake news media and other parties, bilateral negotiations are ongoing and “progressing very smoothly.”
The financial market reacted swiftly to this latest statement. The US dollar index surged rapidly in after-hours trading, once crossing the 100.00 mark, its first intraday touch of that level in the past three days. Meanwhile, US crude oil prices, which had soared earlier in the day, plunged sharply, with intraday volatility intensifying further.
Previously, due to traders gradually losing patience with Trump’s contradictory signals on Iran, along with soaring oil prices triggering severe inflation concerns, Wall Street had just undergone its most turbulent trading day since the outbreak of the Middle East crisis, with both stocks and bonds under pressure.
Inflation fears batter stocks and bonds
Before Trump’s after-hours post, all three major US stock indexes plunged on Thursday. The benchmark S&P 500 closed down 1.7%, its largest single-day drop since January 20 and hitting a six-month low. The tech-heavy Nasdaq Composite fell 2.4%, retreating more than 10% from its late-October high and entering “technical correction” territory.
The bond market was also hit hard. At Thursday’s New York close, the benchmark US 10-year Treasury yield rose 7.95 basis points to 4.4117%. The more rate-sensitive 2-year Treasury yield jumped 10.05 basis points to 3.9858%, having surged more than 0.6 percentage points over the past month, its worst performance since September 2022. This week, all three of the US government’s Treasury auctions totaling $183 billion showed weak demand, with winning yields above market levels, highlighting investor fatigue.
Due to Middle East conflict disrupting oil supply, Brent crude rose 5.7% on Thursday to $108.01 per barrel, its biggest single-day gain since March 11; US WTI crude climbed 4.6% to $94.48. The surge in oil prices has led investors to reassess the Fed’s policy path, with the market not only abandoning bets on rate cuts this year but even starting to price in rate hikes. The OECD warned on Thursday that the Middle East crisis would push US inflation up to 4.2% this year, the highest among G7 countries.
The “invisible ceiling” of oil and US Treasuries
Facing oil price volatility, Wall Street is trying to find patterns amid the Trump administration’s policy swings.
Many observers have found that whenever energy prices or borrowing costs hit certain thresholds, the White House’s rhetoric turns more conciliatory, known as Trump’s “TACO Moment” (short for Trump Always Chickens Out).
As Wallstreetcn previously noted, according to senior energy traders’ observations, whenever US crude oil prices approach $95 to $100 per barrel, the White House’s cooling rhetoric clearly ramps up, and market expectations of government intervention rise accordingly. Onyx Capital Group oil market analyst Jorge Montepeque pointed out that gasoline above $4 per gallon is politically very damaging, and Trump is clearly worried about high oil prices.
US Treasury yields are another trigger threshold for cooling signals. Monica Defend, head of Amundi Investment Institute, noted that Trump became extremely sensitive to Treasury yields during his second term; “Whenever the 10-year Treasury yield approaches 4.5%, the government gets genuinely nervous, and that’s usually when they take action.” To this end, Maximilian Uleer, strategy chief at Deutsche Bank, has created a “pressure index” combining inflation expectations and Treasury yields to predict White House strategy shifts.
The extreme uncertainty from the interplay of war and negotiation
This marks the second time Trump has extended the deadline for strikes on Iranian facilities since he first issued the threat on March 21. On Monday, he postponed the deadline to Friday, citing “productive” dialogue. Earlier Thursday, he had already hinted in a White House cabinet meeting that the deadline was flexible, saying it would only be strictly enforced if special envoy Steve Witkoff and others reported that negotiations were unsuccessful.
The White House frequently alternates between diplomatic efforts and military deterrence. On one hand, Trump instructed senior officials like JD Vance, Marco Rubio, and Jared Kushner to mediate a 15-point peace plan through third parties; on the other hand, the Pentagon has ordered an additional 10,000 elite US troops and five warships to the Middle East. The Iranian side denies direct negotiations, but confirms contact with third countries.
Regarding the market’s violent reaction, Steven Grey, chief investment officer of Grey Value Management, believes this is not irrational behavior.
“The market hasn’t become jittery; this is how an efficient market normally behaves under extreme uncertainty,” he said. “People are turning on a dime, or simply choosing to sit on the sidelines—the market’s confusion is entirely rational.”
At present, many Wall Street institutions are choosing to stand pat to avoid being caught off guard by the next White House social media post.
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