Markets rally on Trump’s threat to exit Iran war, while Jamie Dimon backs allies’ call to ‘win and secure the straits’

(SeaPRwire) –   The stock market experienced a significant surge Monday morning following indications from the White House that the responsibility for reopening the Strait of Hormuz might no longer fall on the United States.

The S&P 500 saw an increase of over 1.5%, while the Nasdaq climbed by nearly 2%.

Overnight, a report in the Wall Street Journal suggested that President Trump was prepared to withdraw from the conflict in Iran. By morning, he was reportedly urging allies to “build up some delayed courage, go to the Strait, and just TAKE IT.”

“You’ll have to start learning how to fight for yourself, the U.S.A. won’t be there to help you anymore, just like you weren’t there for us,” Trump posted on his social media platform, Truth Social.

Concurrently, the average price of gasoline in the U.S. surpassed $4 per gallon on Tuesday, a rise of more than a dollar from $2.98 on February 27, the day before the war commenced. This marks the first time gas prices have exceeded the $4 threshold since 2022, when Russia’s invasion of Ukraine led to an energy crisis. At the same time, Trump’s approval rating has plummeted; according to Nate Silver, his approval rating now stands at -16.7, a record low for his second term.

Throughout the war, the White House has tailored its communications to appeal to the stock market, which is striving to maintain its long-standing rally despite escalating consumer costs. While Americans are facing financial strain at the pump, Southeast Asia is grappling with fuel shortages that are compelling individuals to work remotely or conserve energy by reducing air conditioning use.

As Trump continues to prioritize the American market, he is reinforcing an “America-first” trade approach, where investors benefit while other nations bear the costs. Recently, U.S. allies in the Gulf have urged Trump to sustain the war until the Iranian regime is completely incapacitated, preventing them from funding proxies or maintaining control of the Strait as a bargaining chip. Jamie Dimon echoed this sentiment in an interview with Brian Kilmeade on Fox News Tuesday morning, stating that “it’s much more important that this be successfully completed than what the market does.”

“We should all hope that these bad people, that we win this thing and clean up the straits and that Iran is no longer a threat to everybody,” Dimon remarked.

However, the White House has, on multiple fronts, attempted to temper expectations regarding the Strait of Hormuz. White House Press Secretary Karoline Leavitt confirmed Monday that reopening the Strait of Hormuz is not among the “core objectives” Trump has established for the military operation. Defense Secretary Pete Hegseth reinforced this message Tuesday morning at a press conference at the Pentagon, identifying the destruction of Iran’s missiles, drones, and navy as the mission’s goal, but not the Strait itself.

“This Strait of Hormuz issue is not just a United States of America problem,” Hegseth stated.

Leavitt added Tuesday that once the war concludes, gas prices “will plummet back to the multi-year lows American drivers enjoyed before these short-term disruptions.”

The stock market appeared to interpret this as a de-escalation: if the U.S. withdraws, it removes the worst-case scenario of a protracted ground conflict that would further drive up oil prices. However, disengagement does not resolve the fundamental issue; the price of oil also increased on Tuesday, with West Texas Intermediate trading at $103 at the time of writing, nearly double its price at the beginning of the year. BlackRock CEO Larry Fink warned this week that oil could reach $150 and trigger a global recession if Iran continues to pose a threat to Hormuz after the war ends.

The impact on the real economy is already accumulating. Ultimately, even as the U.S. utilizes its strategic reserves, oil is a global commodity, and as commodities researcher Rory Johnston aptly puts it, “a barrel of oil lost anywhere is a barrel of oil lost everywhere.” Oxford Economics has revised its global industrial growth forecast down to 2.5% for this year, cautioning that energy-intensive sectors such as transport, utilities, and petrochemicals face significant cost increases and production decreases. Their senior economist Nico Palesch warned in a note Tuesday morning of the potential for “supply chain disruptions on par with what was seen in the Covid-19 pandemic” if the strait’s closure is not resolved.

The United Nations Development Programme also warned Tuesday that the war could drive up to 4 million people in the Middle East into poverty, with the region facing GDP losses ranging from $120 billion to $194 billion. Over 3,000 people have been killed across the Middle East since the war began: 1,900 in Iran, 1,200 in Lebanon, 19 in Israel, and 13 U.S. service members.

Meanwhile, the administration continues to escalate its threats against Iran. Trump shared a video on Truth Social Monday night depicting a large ammunition depot in Isfahan being struck by American bombers, an attack that Hegseth confirmed involved 2,000-pound bunker busters to destroy missiles. The chairman of the Joint Chiefs added that the U.S. has commenced flying B-52 bombers over Iran, aircraft capable of carrying nuclear weapons.

On the ground, thousands of special operations forces—Navy SEALs, Army Rangers, Marines—are deployed in the region. Hegseth stated that strikes will intensify if a deal with Iran is not reached soon, while Trump himself has threatened to “obliterate” Iran’s power plants, oil wells, and Kharg Island—and “possibly all desalination plants,” which millions of people across the Middle East rely on for drinking water. Human Rights Watch has indicated that bombing these facilities would constitute a war crime. When questioned about this, the chairman of the Joint Chiefs responded only that the military would subject any such target to its “normal procedures.”

Meanwhile, Iran has little incentive to negotiate. Daily ship traffic through the strait has decreased by approximately 90% to 95% since the war began. Iran’s parliament has approved a plan to formalize tolls on vessels transiting the waterway, thereby codifying its control over the chokepoint, from which it has already profited significantly: Iran is earning substantially more per barrel than before the war. With such incentives to maintain its closure, Tehran may not be inclined to negotiate.

No other country has stepped forward to assume responsibility for opening the Strait. Trump criticized allies on Truth Social, particularly France, which he accused of being “VERY UNHELPFUL” for blocking Israeli planes carrying fuel from flying over their airspace. “THE USA WILL REMEMBER!!” he declared.