Eleven hours of excitement! Trump "wave his baton" in the financial market, causing ups and downs.

In the past 11 hours, the US-Iranian conflict went from "on the brink" to an emergency brake, causing significant fluctuations in the financial markets: US stocks went from falling to rising, oil prices surged and then plummeted. Let's examine the relationship between the events of the past half day related to the US-Iran conflict and the performance of the financial markets: According to reports from CCTV and other media, Trump has repeatedly threatened Iran, stating that the deadline to reach a ceasefire agreement is 8:00 pm on April 7 Eastern Time (8:00 am on April 8 Beijing Time). Otherwise, the entire country of Iran may be completely destroyed overnight. On Tuesday evening Beijing time, he again threatened Iran on social media, stating, "Tonight, a civilization will be completely destroyed and never return." Affected by this news, US stocks fell significantly in early trading on Tuesday, with the Nasdaq falling by over 1.7% and the S&P 500 index falling by 1.1%. International oil prices continued to rise. During midday trading, as US Vice President Pence announced that military objectives had been achieved and reports revealed that there had been some progress in US-Iran negotiations, oil prices began to decline. The decisive moment came towards the close of the US stock market when Pakistani Prime Minister Shabaz posted on social media requesting Trump to extend the "final deadline" by two weeks and also asked Iran to open the Strait of Hormuz for two weeks as a gesture of goodwill. White House press secretary Levitt mentioned that Trump had received the proposal from Pakistan and would respond. A senior Iranian official stated that Iran is actively considering Pakistan's request for a two-week ceasefire. In the final minutes of trading, the S&P and Nasdaq staged a miraculous turnaround, both achieving a "five consecutive-day rally." By the close, the S&P 500 index was up by 0.08%, and the Nasdaq Composite Index was up by 0.1%, both having rallied for 5 consecutive trading days. After the US stock market closed, Trump made a major announcement at 6:30 am Beijing time on Wednesday, stating that he agreed to suspend bombings and attacks on Iran for two weeks, provided that Iran agreed to fully, immediately, and safely open the Strait of Hormuz. Iran's Supreme National Security Council also stated that they accepted Pakistan's ceasefire proposal. Following this news, US stock index futures surged by nearly 2% in after-hours trading, with Nasdaq futures surging by nearly 3% at one point. International oil prices also dropped significantly: Brent crude oil futures and West Texas Intermediate crude oil futures both fell by about 16%, with the decline slightly narrowing at the time of writing. Precious metals rose in early trading: international spot gold surged significantly, reaching $4857.46 per ounce at one point, and at the time of writing, the increase had slightly narrowed to 2.34%, at $4816.09 per ounce; spot silver rose by 4.2% to $76.02 per ounce. Overall, this situation inevitably brings to mind Trump's "TACO strategy." It is not surprising considering the backdrop of a tough standoff with Iran and declining approval ratings in polls that TACO seems to be Trump's only choice. "TACO trading" (Trump Always Chickens Out), describing a Wall Street trader mindset: whenever "certain events" cause a steep drop in financial markets, Trump tends to back down, as seen with his previous trade wars, threats to take over Greenland, and criticism of the independence of the Federal Reserve. Hormuz remains a focus While a two-week ceasefire is underway, the focus remains on the Strait of Hormuz (through which 20% of global oil supply passes). Trump emphasized that the full, immediate, and safe opening of the Strait of Hormuz is a precondition for the ceasefire. Iran, in its "Ten-Point Plan" submitted to the US, emphasized certain matters: coordination with the Iranian armed forces to control passage through the Strait of Hormuz; establishment of a safe transit agreement for the Strait of Hormuz to ensure Iran's dominance. Tom Graff, Chief Investment Officer of asset management firm Facet, commented that investors should expect oil prices to remain significantly above pre-war levels, with increases being "quite noticeable." He views Iran's blockade of the strait as a "negotiating chip." He pointed out that while Iran may wish to reopen the strait on its own terms rather than US terms, the permanent closure of the strait is not beneficial to either side, including Iran itself. Graff stated that he does not believe a months-long or longer closure of the strait is sustainable, and the situation will eventually turn at some point. Uncertainty remains high Sameer Samana, Global Stocks and Real Assets Head at Wells Fargo Investment Research Institute, stated, "President Trump's negotiation strategy is to maximize uncertainty, which goes against the market's aversion to uncertainty. "We believe that this strategy will continue throughout his entire presidency, as he needs to negotiate and renegotiate various situations and agreements, and the market is best reminded of this." He added. Doug Peta of market research firm BCA Research also mentioned that with the continuous influx of news and the risks of new market turbulence events impacting the stock market, traders find it difficult to stay out of the situation. "There is extreme uncertainty because the US may exit the conflict within the time it takes to forward a post on Truth Social, or there could be a significant escalation of the conflict, and the difference in outcomes is so significant." He added. This article is republished from "Cailianshe", edited by GMTEight: Xu Wenqiang.