Trump Talk Sparks Market Rebound

Markets have spent the past few weeks teasing both bulls and bears. Ongoing tension between the United States and Iran has kept investors cautious, even as economic data and earnings have been solid enough to justify higher prices. That hesitation has shown up in repeated failures for equities to push decisively higher.

Sentiment shifted after comments from U.S. President Donald Trump calling for a cooling of tensions. Trump said recent killings in Iran had stopped and indicated there were no immediate plans for further harsh action. The softer tone was enough to spark a relief rally, with U.S. equity futures jumping almost immediately. Still, it’s worth remembering that Trump has a history of publicly dialling back rhetoric before moving aggressively and unexpectedly.

Oil markets reacted just as quickly. Prices had been carrying a risk premium on fears of supply disruption through the Strait of Hormuz—something we’ve written about extensively. As the likelihood of near-term conflict eased, that premium began to unwind. Attention has since shifted back to inventories and demand.

Equity indices rebounded after several days of weakness. Technology and consumer stocks, which had been under pressure, recovered as investors tentatively moved back into risk. The open question is how durable that move will be if policy or geopolitical surprises re-emerge. Gold and silver were already trading at elevated levels as investors sought protection from geopolitical risk, sticky inflation and rapidly rising government debt. The perceived easing in immediate conflict risk has not materially undermined that support. Instead, precious metals have remained firm, suggesting investors are maintaining defensive positions rather than fully rotating back into risk assets. A lull in escalation, after all, does not mean the risk has disappeared.

That price resilience matters. It signals that support for precious metals now extends well beyond a single geopolitical flashpoint. Central bank buying, currency debasement concerns, long-term confidence issues and the persistent risk of war continue to underpin demand.