The rising sound is heard as people rush to make their last move before the storm.

Ask AI · Trump’s Final Deadline—Why Is the Market Still Optimistic?

Source: Wall Street Intelligence Circle

On Monday, global markets remained highly restrained, showing only slight turbulence:

• The U.S. dollar, crude oil, and U.S. Treasury yields all edged down together, creating an environment where prices can rise;

• U.S. stocks, gold, and Bitcoin also inched up.

But this calm is only temporary—more like people scrambling to grab the last bit of profit before the rainstorm hits.

First, the “final deadline” set by Trump is coming up. He said that if Iran fails to reach an agreement before the Tuesday 8:00 p.m. deadline (08:00 on Wednesday, Beijing time), it will face severe consequences. The U.S. military can “destroy all bridges inside Iran before 12:00 tomorrow night.” Power plants will be “burned, exploded, and permanently unable to be used again.”

The market is currently pricing in Trump’s negotiation style. The market tends to believe that Trump’s extreme rhetoric (destroy all bridges, blow up power plants) is a form of “maximum pressure” tactics. If the deadline arrives without a large-scale airstrike—despite no agreement being reached—by then the market will still treat it as good news (the worst-case scenario didn’t happen).

However, according to reports from Iranian media, Iran has conveyed its rejection of the ceasefire proposal to the mediator, Pakistan. Iran demands a permanent end to the war, the lifting of sanctions, the launch of reconstruction work, and the establishment of a security passage agreement for the Strait of Hormuz.

Before the “final deadline” arrives, focus tightly on crude oil, the U.S. dollar, and U.S. Treasury yields.

· If oil prices break above $115, it shows that “smart money” is beginning to retreat and isn’t joining the “12 o’clock tomorrow night” gamble. Different oil prices correspond to different market conditions—below $110, the market can still comfort itself (the conflict is controllable); $110–$120, stagflation trades begin to slowly kick off; above $120, it enters the “policy out-of-control zone.”

· If the U.S. dollar index climbs back above 100, alongside yields moving higher, that’s a signal of a second wave of declines in risk assets (the key is not the level, but the direction and synchronization).

Not just Iran—this week the market will face major events.

· Thursday 02:00: Release of the Federal Reserve meeting minutes, which may reveal officials’ concerns about inflation, as well as the economic impact that the Iran conflict and related disruptions to the flow of energy and other commodities could bring.

· Friday 20:30: Release of the U.S. March CPI. Economists expect that, boosted by the Iran war driving up gasoline prices, March CPI is forecast to rise by 1%, which would be the largest single-month increase since 2022.

Neither of these two major events supports Federal Reserve rate cuts. At that time, you need to watch the 2-year U.S. Treasury yield—it represents the market’s repricing of the interest-rate path. If it moves up, it means the market is starting to abandon the “rate-cut” hopes.

What is most dangerous now isn’t “war,” but rather a “second surge” in inflation.