Trump TACO, geopolitical détente, which assets should be the primary focus?

Trump did it again with TACO!

Today, the Asia-Pacific markets opened. A single remark from Trump—“Even if the Strait of Hormuz is still broadly closed, I’m willing to end military action against Iran”—triggered intense market volatility.

International oil prices quickly plunged by more than 4%. Global equities surged across the board. In US stock market after-hours trading, key indexes rose by more than 1%. Safe-haven sentiment rapidly cooled off, and risk appetite warmed in sync.

Trump’s comments weren’t sudden—they were the wrap-up of a series of easing signals.

From March 23, when he postponed the strike on Iran’s energy facilities and said negotiations “had progress,” to March 24, when he claimed the “war with Iran has been won” and said Iran was willing to “negotiate an agreement,” and then to March 29, when he said Iran would allow 20 oil tankers to pass through—right up to March 30, when he released signals to end military action—the US stance has been softening all along.

The motivation behind it is very clear: now, anti-war sentiment among the American public is rising sharply. Trump’s approval rating has already fallen significantly, and he needs to push an agreement to pave the way for the upcoming election. That is his core demand—and the key reason why easing signals have been released in such dense fashion.

Judging from the recent back-and-forth statements between the US and Iran, it’s easy to feel that both sides’ willingness to talk is becoming increasingly apparent, and the real easing window is getting closer.

So in this situation, what assets or directions should be prioritized first?

Previously, the Strait of Hormuz—the core transport chokepoint for one-fifth of the world’s crude oil—was kept under sustained blockade. That directly and significantly pushed up oil prices, which in turn triggered market fears of rising inflation and an economic downturn. Funds flocked to oil and gas in safe-haven mode, while risk assets such as precious metals and stocks faced sustained pressure.

And Trump’s remarks directly broke the negative feedback loop of “conflict escalation → strait blockade → high oil prices → economic pressure → risk assets falling.” The market immediately switched to a positive expectation of “conflict easing → lower energy risk → cooler inflation → soft landing → risk assets rebounding.”

But we need to be careful not to let short-term easing cloud our judgment—we still must take a rational view of the prospects for negotiations.

Whether easing can ultimately happen doesn’t depend solely on the US; it also depends on Iran.

Iran’s response is clear: a hard line and room for flexibility coexist—refusing direct negotiations, not accepting “humiliating terms,” and not yielding on sovereignty issues are red lines; but allowing 20 oil tankers to pass also releases easing signals.

At present, some mainstream assessments are: the probability of reaching a ceasefire in the short term and easing the situation is not low—around 60%; however, the difficulty of a comprehensive negotiation outcome is extremely high, with a probability of less than 30%.

The main obstacles are very prominent: the gap between both sides’ demands, mutual distrust, and also Israel’s Netanyahu government firmly opposing a deal—so it’s hard to reach a long-term agreement.

This “short-term easing with long-term doubts” framework is the core behind future market volatility. Investments must balance short-term opportunities with long-term certainty—and can’t go all-in in one direction.

For short-term investment directions, there’s one core focus: capturing short-term repair opportunities driven by geopolitical easing and cooling inflation.

After oil prices fall sharply, non-crude-oil industry chains that were previously suppressed by high oil prices will definitely be the first to see a repair.

First are aviation, shipping, and logistics. These three sectors were hit the hardest in the recent declines. If downstream fuel costs fall directly, profit expectations should rebound quickly;

Second are gold and silver precious metals. Precious metals have fallen extremely hard recently. If the US and Iran restart talks, it could stimulate inflation expectations and cause the US dollar index to fall. That would likely reduce market expectations for Fed rate hikes—making it very possible to become a trigger for gold and silver to kick off a rebound again.

Third, interest rate–sensitive assets will see a valuation reset—especially high-valuation tech growth sectors like AI computing power and semiconductors. Cooling inflation would strengthen expectations of Fed rate cuts, and they would rebound on improved liquidity expectations.

If you feel it’s hard to gauge individual stocks, you can also focus on ETFs in high-valuation tech growth sectors.

There’s also discretionary consumption: as cost pressures ease and consumer confidence improves, it can create opportunities in stages.

But the point to keep in mind at all times is that what drives the short term is expectation repair. You must be alert to the risk of negotiation breakdown or repeated standoffs. So in terms of investment direction, it’s best to concentrate on instruments that can “definitely” repair—don’t bet everything on a single geopolitical expectation.

From a medium-to-long term perspective: if negotiations land, and even if the Strait of Hormuz has conditions to reopen, the market would shift from “geopolitics-driven” back to “fundamentals-driven.” Investment directions would then revolve around three points: inflation trajectory, interest rate changes, and industry cycle/conditions.

First, even if the US and Iran ease, repairing the global energy supply chain still takes time. The oil price “center” will likely remain relatively high, so the logic of energy substitution won’t break. Coal and coal-chemical industry areas still have value for strategic positioning.

Second, after inflation cools in a more moderate way, the pressure on high-valuation growth sectors will ease further. Sectors with long-term growth logic—such as AI computing power and semiconductors—will move into a phase of rising both valuation and earnings.

Third, from a long-term perspective, expectations of falling interest rates are supportive for finance and real estate. And with supply chain restructuring in the background, China’s global share in high-end manufacturing (machinery, electronics, chemicals, etc.) would increase—worthy of long-term attention.

Fourth, core resources will likely face structural shortages. With dual demand from AI and the transition to new energy, the supply-demand landscape for industrial metals like copper and aluminum—as well as strategic metals like rare earths—will improve, carrying long-term allocation value.

In addition, commercial spaceflight—now a new dimension for competing in computing power—has entered a scale-based profit period, and its core links are worth monitoring long term.

However, with concerns still present today—such as US high inflation suppressing the pace of rate cuts, worsening private credit, and weak global economic recovery—mid-term investing needs to balance growth with defense. Don’t blindly chase short-term hotspots.

Core investment direction distilled (intuitive version):

1. Short term: Focus on repairing non-crude-oil industry chains (aviation, shipping, logistics, chemicals), layered with interest rate–sensitive tech growth (AI computing power, semiconductors), and stage-based opportunities in discretionary consumption. The core is to make money from expectation repair.

2. Medium term: Around inflation, interest rates, and industry conditions, focus on energy substitution (coal, coal-chemicals), high-valuation growth (AI computing power, semiconductors), interest rate–sensitive assets (finance, real estate), and the long-term value of China’s high-end manufacturing.

3. Long term: Penetrate and ride through geopolitical volatility, focusing on three major certainty-driven tracks—energy transition (solar, wind power, energy storage), AI computing power infrastructure (chips, optical modules, data centers), and core resources (industrial metals, strategic metals). Also factor in key links in commercial spaceflight.

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