President Trump publicly states the war will be over "soon" leading to a further fall in the price of crude oil and a strong recovery by the US stock market.
- President Trump surprised yesterday by hinting that the war with Iran is basically over or at least almost over. In a later press conference, he said that the war would be over "soon", although he conceded that meant longer than one week. The President's remarks were surprising because all the indications coming from his administration and the Pentagon were of a determination to keep going for as long as six weeks more if that were required. Markets reacted instantly to the comments, with WTI Crude Oil falling back further to trade below $90, and the S&P 500 Index turning around from a multi-month low to end the day firmly higher. I believe the reason for Trump's comments was to calm the market, but also to make a statement that the war has gone very well and can be safely brought to a close in the near future. Trump has not actually committed to anything. It may be that Trump's aides are telling him that with the damage the war does to the markets, the point of diminishing marginal returns for continuing the war is within sight. It is also true that Israel and the USA have hit considerably more targets and at a notably faster pace than was achieved in June 2025.
- The Iranian regime has been taking a tough line publicly and a great deal of social media activity likely bankrolled by Iran Russia, and China is being undertaken to promote the regime's rhetoric in the USA and Europe. Last night the regime stated that no more oil would be exported through the Strait of Hormuz. In a way, this is a strange statement, because right now there is almost no oil tanker movement across the Strait at all. President Trump responded by saying that if Iran closed the Strait, the USA would respond by basically sending Iran back to the stone age as it would never recover as a nation. I think that Trump is content to see the Strait closed and to just live with it for a few weeks, but he cannot publicly admit that Iran has closed the Strait, so he is warning Iran to tolerate the status quo there. It is likely that Trump has been warned seizing Hormuz would certainly bring more casualties and the President will be eager to avoid that as much as possible.
- After spiking as high as just under $120 per barrel early yesterday, WTI Crude Oil stabilized just below $100 and is now trading well below $90. This dramatic move looks like the bursting of a speculative bubble. I think it is exactly that, but I also think it is very possible WTI could see $120 again or even higher within a few days. Yet I keep in mind that President Trump will be doing everything possible to keep the price suppressed.
- Institutional trend traders will likely have exited their long energy trades (e.g. WTI Crude Oil, RBOB Gasoline Futures).
- In the Forex market, the strongest major currency since today's Tokyo open has been the Australian Dollar, while the weakest has been the Swiss Franc.
- Wheat futures made a strong bullish breakout, reaching a new 1.5-year high price yesterday. However, the price ended up closing lower on the day. Trend traders mostly went long of wheat yesterday. If you want to do that but can't afford the expensive Wheat futures, there is a Wheat ETF called WEAT that could give you exposure to the grain.
- There are no high-impact data releases scheduled for today. However with the dramatic events in the energy markets, it is still likely to be a day that will see some volatility in the markets.