By Vicky Ge Huang and Hannah Erin Lang
Ariel Itzhak was spending Tuesday preparing for President Trump's 8 p.m. deadline for escalating attacks on Iran. His plan: Bet against any rally.
The retail trader and software-business owner in Miami said he expects the war to drag on markets even if Trump backs away from promised attacks on civilian infrastructure such as bridges and power plants. That means spending the day tracking social media for signs of another reversal.
"The sentiment is just all over the place," he said. "Nobody knows what's going to be the next move."
The S&P 500 slumped around 0.5% and oil futures climbed above $115 a barrel after the U.S. struck military targets on Iran's Kharg Island and Trump escalated his threats against the country ahead of his evening cutoff to reopen the Strait of Hormuz. The moves highlighted how sensitive markets remain to headlines from the Middle East.
Since the war began roughly six weeks ago, monitoring the president's shifting ultimatums and social-media pronouncements have become a part of the job for Wall Street pros and individual traders alike. But given that the president backs away from his most extreme policies often enough that the move has its own acronym -- TACO, for Trump Always Chickens Out -- prepping their portfolios for both de-escalation and the U.S. "blowing everything up" has proved a challenge.
Many traders say they are mentally worn down by the daily drip of headlines. Some are staying on the sidelines, waiting for a concrete development or a definitive end to the war before committing to a major trade.
Trump's threats that " a whole civilization will die tonight, never to be brought back again," weighed on markets Tuesday, along with the Kharg Island attacks, which U.S. officials said didn't target energy facilities on the key oil export hub. Consumer-discretionary stocks were among the biggest decliners in the S&P 500, extending a slump fueled by fears the war will drag on economic growth.
Oil prices climbed toward their highest levels of the Iran war, approaching highs reached in 2022 after Russia's invasion of Ukraine.
"The president has apparently drawn a line in the sand -- which he has changed before," said Michael Sheldon, vice president and senior portfolio manager for Washington Trust Wealth Management. He added that he was "on pins and needles, like everybody else."
Luke Cannon, a trader on the decentralized exchange Hyperliquid, said he expected the deadline to be extended, or that things will continue in the current status quo. He is betting against bitcoin, ether and some smaller tokens while holding a small position in gold on Hyperliquid, a 24/7 trading venue where people can trade perpetual futures tied to assets from bitcoin to oil.
That community began preparing on Monday, when more than 800 viewers joined a livestream of President Trump's press conference on X, hosted by Hyperdash, a real-time analytics platform for Hyperliquid. The broadcast featured a dashboard that tracked live price action for bitcoin, gold, crude oil and the S&P 500 on Hyperliquid alongside the president's remarks.
Cannon was spending Tuesday glued to the messaging app Telegram and news feeds for developments about the war. He remains skeptical of a market rally, adding that the war has increased inflationary pressures on the economy, effectively taking interest-rate cuts off the table.
"There's a scenario where even if Trump TACOs, you get a quick pump that then sells off as people realize that the world is still going to be messy for the future," he said.
Kirby Ong, a 33-year-old trader based in Singapore, said he is closely following the developments as the deadline approaches. He plans to keep a pulse on the market via X and Telegram. If the conflict escalates tonight, he would potentially bet on oil and gold, where he expects a short-term spike.
"With this kind of uncertainty in the markets, we tend to get wild swings in both directions, and overleveraged positions usually get punished so I'm waiting for a clearer picture," said Ong.
Hanson Birringer, managing director of crypto market maker Flowdesk, said he has seen a growing number of people buying bitcoin and HYPE tokens, the native token of Hyperliquid, while betting against oil-linked perpetual futures on the decentralized exchange. The shift suggests some traders are betting Trump will reverse course, causing crude prices to retreat and riskier assets to rebound.
"Traders are looking past the headlines. The market is pricing in midterm resolution despite short-term escalation," said Birringer.
Write to Vicky Ge Huang at vicky.huang@wsj.com and Hannah Erin Lang at hannaherin.lang@wsj.com
(END) Dow Jones Newswires
April 07, 2026 12:45 ET (16:45 GMT)
Copyright (c) 2026 Dow Jones & Company, Inc.
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