U.S. President Trump has vowed to launch a "hard hit" on Iran within the next two to three weeks if no agreement is reached, sending shockwaves through global financial markets. Stock indices plummeted while oil prices surged, as investors fear renewed conflict and potential infrastructure strikes.
Trump's Ultimatum to Iran
In a rare nationwide address during the "golden hour," President Trump outlined his strategy, stating that the U.S. will target Iranian infrastructure, including power plants, if negotiations fail. He emphasized that the U.S. has not yet attacked Iranian oil facilities, as destroying them would only aid the regime's rebuilding capacity.
- Timeline: Trump warns of action within two to three weeks.
- Targets: Power plants and other critical infrastructure.
- Conditions: No agreement reached with Iran.
Market Reaction: Stocks Down, Oil Soars
Global markets reacted swiftly to the threat, with Asian stock markets falling approximately 0.9% and the U.S. stock index dropping around 0.8%. Meanwhile, Brent crude oil jumped nearly 4%, breaching the $105 per barrel mark. - afhow
Regional Tensions and Global Impact
The conflict has continued to escalate over the past five weeks, disrupting global financial markets and pushing major indices into technical correction zones. The Houthis in the Red Sea continue to block a key shipping route, carrying about two-thirds of global oil transport, further intensifying fears of energy supply disruptions.
Iran's Response
Iran denies seeking a ceasefire, with its President recently making a rare public statement to the American people, stressing that Iran has no enemies and will pay a higher price for continued resistance. The Iranian Foreign Ministry dismissed U.S. ceasefire requests as having "no basis."
Economic Implications
Analysts warn that even if the conflict concludes within Trump's timeframe, restoring energy supply will take time, and damage to infrastructure could drag on global economic recovery. PIMCO economist Tiffany Wilding noted that prolonged conflict increases global economic impact, potentially leading to recession risks.
Additionally, trade policy uncertainty adds pressure, with media reports indicating the U.S. government is preparing a 25% tariff on products made with imported steel.
