Former President Donald Trump issued a significant warning. On April 6, Eastern Time, Trump held a press conference regarding potential military action against Iran. He reiterated that 8:00 PM ET on April 7 is the final deadline for Iran to reach an agreement, cautioning that failure to comply would result in a four-hour U.S. airstrike campaign. He suggested Iran could be "totally dismantled" overnight, potentially as early as the evening of April 7. Concurrently, Trump claimed that negotiations with Iranian officials were "proceeding very well."
These developments triggered a sharp spike in international oil prices. The main U.S. WTI crude futures contract surged to nearly $114 per barrel, while the main Brent crude futures contract breached the $110 per barrel mark. The three major U.S. stock indices initially plunged and turned negative before recovering to close higher collectively.
Regarding Middle East conflicts, the Israeli Defense Forces issued a statement on April 6 announcing "large-scale airstrikes" on several airports in Tehran, Iran's capital, destroying dozens of Iranian Air Force aircraft and helicopters.
In his latest remarks on April 7, Trump threatened during a White House press briefing that the U.S. military could destroy all of Iran's bridges and power stations in just "four hours." He again stated that negotiations with Iran were "progressing smoothly."
Trump mentioned that dialogues with Iran were ongoing, with involvement from the Vice President and a Presidential Envoy. "I believe it's going well, but we have to wait and see," he said, adding, "I can't discuss a ceasefire, but I can tell you there is a positive and willing participant on the other side... they want to make a deal. Beyond that, I can't say more."
Earlier that day at a White House event, Trump told media that following his April 5 ultimatum, Iranian negotiators had presented a significant proposal, which he described as "not good enough, but it is an important step." He noted Iran had "taken a very significant step. We'll see."
During the briefing, Trump threatened to launch a four-hour aerial assault if Iran failed to agree to a deal and reopen the Strait of Hormuz by the 8:00 PM ET deadline on April 7. "We have a plan: by 24:00 tomorrow, every bridge in Iran will be completely destroyed; every power station will be completely disabled, they will be in flames, exploding, and never usable again," he stated. "If we choose, this can all be done in just four short hours. However, we do not wish for this to happen."
Trump indicated that the entire nation of Iran could be "totally dismantled" overnight, potentially on the night of April 7. When questioned by reporters about the morality of targeting civilian infrastructure and cutting power supplies, Trump falsely claimed, "They are willing... they are willing to endure this suffering." Earlier, he had similarly asserted that the Iranian people "want to hear the sound of bombs."
According to a report from the Islamic Republic News Agency on April 6, Iran responded to a U.S. proposal to end the war. The response included ten clauses covering a range of Iranian demands, such as ending regional conflicts, establishing a security agreement for the Strait of Hormuz, undertaking reconstruction, and lifting sanctions. Iran ruled out a temporary truce, emphasizing the need for a permanent end to hostilities.
Trump commented that Iran's proposal was meaningful but insufficient. He stated that whether the conflict would escalate or move closer to resolution depended on Iran's response to his imposed deadline.
Regarding the Strait of Hormuz, Trump said reopening the strait was the top priority. He also asserted that transit fees for vessels passing through the strait should be collected by the United States, not Iran.
Citing informed officials, The Wall Street Journal reported on April 6 that the U.S. and regional mediators were pushing for a 45-day ceasefire agreement aimed at fully ending the war between the U.S. and Iran, but the likelihood of a deal remained "slim."
Following Trump's threats, financial markets showed clear volatility. The two major international oil benchmarks surged sharply. The May WTI crude contract settled at $112.41 per barrel, up 0.78%, while the June Brent contract settled at $109.77 per barrel, up 0.68%.
Simultaneously, the three major U.S. stock indices initially collectively plummeted, turning negative, with the S&P 500 and Nasdaq hitting fresh session lows. Subsequently, the indices recovered to show modest gains, closing higher overall. The S&P 500 rose 0.44% and the Nasdaq gained 0.54%, both marking a fourth consecutive day of gains; the Dow Jones Industrial Average advanced 0.36%.
Major tech stocks displayed mixed performance. Apple, Alphabet, and Amazon.com each rose over 1%, while NVIDIA and TSMC's ADRs saw modest gains. Tesla fell over 2%, and Microsoft and Meta Platforms, Inc. closed slightly lower.
Michael Rosen, Chief Investment Officer at Angeles Investments, warned, "The market may be underestimating the direct and medium-term impacts of energy disruptions; energy prices will remain elevated for a longer period."
Jeff Roach, Chief Economist at LPL Financial, stated, "If the Strait of Hormuz dispute persists into May or June, it would significantly worsen the economic outlook for both the U.S. and the global economy."
Despite intense investor focus on geopolitical risks, Mark Hackett, Chief Market Strategist at Nationwide, noted that macroeconomic data continues to indicate economic resilience, and the earnings outlook for U.S. companies remains optimistic.
In a note to clients, Goldman Sachs suggested that selling by "fast money" investors is abating, and this group could potentially be net buyers of approximately $55 billion over the next month, including around $20 billion in U.S. equities.
Veteran strategist Ed Yardeni commented that following the pullback from last year's record highs, technology stocks have returned to attractive levels for investors willing to take a long-term view.
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