Markets on edge after Trump clouds Iran war outlook
Global markets are likely to face renewed volatility after US President Trump’s address on Wednesday night on the Iran conflict introduced fresh uncertainty around the trajectory and outcome of the war, warns the CEO of global financial advisory giant deVere Group.
Nigel Green’s comments come as investors reassess positioning following a speech that combined signals of a near-term conclusion with continued threats of escalation and no clear resolution on key risks, including control of the Strait of Hormuz.
He says: “Markets were beginning to price in more certainty; but this speech reintroduces more ambiguity.
“Markets had been pricing a shorter, contained conflict. What they’ve heard now is far less definitive, and that uncertainty is likely to drive volatility across asset classes.”
Equities had rallied strongly in recent sessions on expectations that the conflict could end within weeks.
However, Trump’s latest remarks stopped short of confirming a clear timeline, stating instead that the war is “nearing completion” while also emphasising the need to “finish the job.”
At the same time, the US president reiterated threats against Iranian infrastructure if a deal is not reached, while suggesting that allies may need to take greater responsibility for protecting critical energy routes.
The deVere CEO says this combination of messages complicates the market narrative.
“Investors were positioning for a clean, short-duration conflict. Now, the picture is more complex. There’s still no confirmation of how or when this ends, and that changes how markets will price risk.”
One of the most important factors remains the outlook for oil.
Earlier declines in crude prices were driven by expectations of reduced disruption to supply.
“However, the latest comments raise the possibility that key risks, particularly around the Strait of Hormuz, may not be fully resolved.
“The oil market is highly sensitive to this. If traders believe supply risks remain, the geopolitical risk premium will return quickly. This has direct implications for inflation expectations and broader market sentiment.”
A rebound in oil prices would feed through to inflation, potentially influencing interest rate expectations and weighing on equity markets.
The deVere CEO notes that currency and commodity markets are likely to respond first.
“Gold and the dollar typically strengthen when uncertainty rises, and we would expect to see renewed support for both if markets begin to question the stability of the current outlook,” he says.
The speech also highlighted a broader issue: the lack of a clearly defined end state.
Trump indicated that the US could conclude its involvement without securing a full resolution, including the reopening of key shipping routes. This raises the possibility of a partial outcome that leaves underlying tensions unresolved.
Nigel Green warns that such a scenario would be challenging for markets.
“A conflict that is declared ‘complete’ but leaves strategic risks in place is not the same as a full resolution. Markets will need to adjust to that distinction,” he notes.
The reaction is likely to be most visible in equity markets, which had been buoyed by expectations of a rapid de-escalation.
“Equities have moved higher on optimism. If that optimism is now being questioned, we could see a pause or pullback as investors reassess the outlook.”
The situation remains highly fluid, with ongoing diplomatic efforts and the potential for further developments in the coming days.
The chief executive emphasises that markets are now being driven by shifting probabilities rather than confirmed outcomes.
“Financial markets move quickly when the narrative changes. Right now, the narrative has become less clear, and that increases the likelihood of sharper moves in both directions,” he says.
He concludes: “The key issue is uncertainty. Until there is a clearer understanding of how this conflict ends and what risks remain, markets will remain sensitive to every development.
“This means higher volatility, particularly across equities, oil and currencies, as investors adjust to a more complex and less predictable outlook.”