Markets Plunge as Trump Pledges Continued Iran Strikes, Oil Prices Surge

Financial markets reacted sharply on Thursday to President Donald Trump's prime-time address, with equities sinking, oil prices spiking, and the dollar gaining ground as hopes for a swift end to the U.S.- Israeli conflict with Iran evaporated.\n\nTrump vowed that the United States would strike Iran 'extremely hard' within weeks, asserting that military objectives were nearly complete and the conflict was nearing its conclusion. However, his speech offered no concrete timeline for de-escalation or for the reopening of the critical Strait of Hormuz, a key oil shipping route that has faced disruptions severely impacting Asian energy supplies.\n\nThe absence of clear assurances left investors uneasy. 'We have no additional certainty or clarity around timeline from this address and this is what the market was looking for,' said Jon Withaar, senior portfolio manager at Pictet Asset Management in Singapore. He noted that expectations of 2-3 more weeks of military action, the possibility of ground troops, and reiterated threats against infrastructure would keep markets defensive, especially heading into a long weekend.\n\nThis reaction marked a reversal from the previous two sessions, when optimism about an imminent war end had lifted global stocks and pulled the dollar off its highs following a turbulent March driven by soaring oil prices. Immediately after the speech, investors sold risk assets across the board, sending equities lower and driving oil higher.\n\nU.S. stock futures dropped about 1%, while European futures sank over 1.5%. Asian markets bore the brunt, with Japan's Nikkei falling 1.8% and South Korea's Kospi tumbling 3.6%. MSCI's broadest index of Asia-Pacific shares outside Japan declined more than 1.5%, and nearly all Asian bourses ended in negative territory.\n\n'The only thing that really matters is whether the Strait of Hormuz will open soon. Trump's speech doesn't imply this is likely to happen as quickly as the markets were expecting,' commented Prashan Newnaha, senior rates strategist at TD Securities. Trump stated that the U.S. does not need the strait and that it would reopen naturally once the conflict concludes, while Iran has used the waterway as leverage by targeting Gulf nations hosting U.S. bases.\n\nNewnaha also highlighted that Trump's remarks on war duration suggested a conflict lasting a few months would be shorter than previous U.S. wars, but this did little to soothe markets. 'Expect USD and oil to move higher while risk is shed,' he predicted. The speech also revived concerns about stagflation—the dangerous combination of high inflation and stagnant growth—that had rattled markets in March.\n\nThe U.S. dollar, already a preferred safe haven during the turmoil, rose against most major currencies following the address. The euro weakened 0.25% to $1.156, and the dollar index, which measures the greenback against six currencies, climbed 0.3% to 99.858 after dropping nearly 1% in the prior two days on peace hopes.