Trump's one statement scared the market, causing the global market trend to reverse 180 degrees.

Why did AI · Trump’s speech trigger intense market volatility?

Southern Finance, 21st Century Business Herald Reporter Wu Bin reports

After initial expectations, investors’ hopes for a quick ceasefire between the U.S. and Iran have once again been dashed.

According to Xinhua News Agency, local time on April 1, U.S. President Trump delivered a speech in which he claimed on his own that he had achieved a “rapid, decisive, overwhelming victory” in the war involving Iran, and that the United States’ core strategic objective in the Iran war is “nearly complete.” Trump said, “The Iranian navy has now been completely destroyed, and its air force and missile programs have also been severely damaged.”

But another remark by Trump also frightened the market: “In the next two to three weeks, we will launch an extremely forceful strike at them… and at the same time, negotiations are underway.”

Nick Twidale, Chief Market Analyst at AT Global Markets, said that investors obviously are not buying it, and global markets could have even more downside today. Although he said the war is about to end, that key message—that Iran will still be targeted in the coming weeks—was extremely negative for the market.

In recent days, the prospect that hostilities in the Middle East could end had once boosted global stock markets and caused the dollar to retreat from its highs. Trump’s latest speech reversed the direction of financial markets. Asia-Pacific stock markets faced pressure across the board, U.S. three major stock index futures fell sharply, crude oil surged, the U.S. dollar strengthened, and gold declined.

Trump’s approval ratings hit a new low

According to CCTV News, local time on April 1, the latest U.S. polls from the U.S. side showed that Trump’s approval rating on economic issues fell to 31%, the lowest level since he took office.

The survey shows that about two-thirds of Americans believe that the current U.S. government’s economic policies have worsened the state of the U.S. economy, with the proportion of people holding this view rising by 10 percentage points from January this year. Reports say that after the U.S. carried out military action against Iran, U.S. oil prices rose, further intensifying Americans’ economic pressure and dissatisfaction.

CCTV News also reported that a public opinion survey jointly released on March 31 by Reuters and Ipsos shows that two-thirds of Americans believe that, regardless of whether the set goals are achieved, the United States should end military action against Iran as soon as possible.

About 60% of respondents said they do not support the United States’ military strikes against Iran. In addition, two-thirds of respondents said they expect gasoline prices to rise further in the coming year, and more than half of respondents believe that this conflict will have a negative impact on their personal financial situation.

According to data from the American Automobile Association (AAA), the national average gasoline price in the U.S. has climbed to more than $4 per gallon, the first time since 2022. Before the U.S. and Israel launched strikes on Iran, the average U.S. gasoline price was still under $3 per gallon.

Oil prices may remain high for the long term

Regarding the strategic energy transportation chokepoint, the Strait of Hormuz, Trump said the United States almost does not need to import oil through the Strait of Hormuz, and that those countries that need to obtain oil via the Strait must “take responsibility for maintaining this corridor.” Trump urged these countries either to “buy oil from the U.S.” or to muster the courage to “snatch oil” directly at the Strait of Hormuz. He said that when the Iran conflict ends, the strait “will naturally open.”

However, it is worth noting that Bank of America economist Claudio Irigoyen warned that, affected by the Iran conflict, the world will face a scenario of slower economic growth and rising inflation; even if the conflict ends within weeks, international oil prices throughout the year will remain at a high level of around $100 per barrel.

Trump’s speech also released a series of contradictory signals. Trump claimed that regime change in Iran is not the goal of the United States, but at the same time he claimed on his own that regime change in Iran has already taken place. He said that if Iran does not reach an agreement with the U.S. within the next two to three weeks, U.S. forces will aim at Iran’s key targets—“very aggressively striking every power plant”—and may also strike Iran’s oil facilities.

Pepperstone Group research strategist Dilin Wu said bluntly that Trump’s speech is “indeed disappointing.” Trump’s earlier remarks about stepping back from the Middle East now seem more like an effort to soothe the market while keeping pressure options on the table. He clearly still favors a strategy of applying pressure first and then easing the situation, rather than simply and straightforwardly cooling things down.

Market volatility may remain high as well. Rodrigo Catril, a strategist at National Australia Bank (NAB) in Sydney, believes the market seems to be focused on the view that the conflict has not yet ended. The U.S. is seeking to escalate the situation, hoping to force Iran into reaching an agreement, but this strategy is not without risk—so it is necessary to closely watch oil prices.