Will Trump's Gradual De-Escalation Remarks Spark a Market Rebound? Analysts Warn: Don't Take It at Face Value

Cailian Press, March 22 (Editor: Ma Lan) U.S. President Trump posted on Truth Social on Friday, hinting at a gradual winding down of military operations in the Middle East. According to CCTV, the U.S. government has begun preliminary discussions on peace negotiations with Iran. This has brought hope of a rebound to some investors.

After Trump hinted at a phased de-escalation on Friday, U.S. stocks saw strong buying, with ETFs tracking the Dow Jones, S&P 500, and Nasdaq 100 indices all surging significantly later that evening. On Friday, Brent crude oil closed at $112 per barrel, but influenced by Trump’s remarks, trading was light after settlement, and oil prices retreated to around $108 per barrel.

Analysts expect Asian markets to open flat or higher on Monday, as Trump’s comments may lead to a drop in oil prices, reducing global inflation risks and prompting the Federal Reserve to reconsider rate cuts. Gold, precious metals, and cryptocurrencies are also expected to rise accordingly.

However, some analysts believe that despite Trump’s public inclination toward easing tensions, his military presence in the Middle East has actually increased, which could mean that short-term conflicts are unlikely to end, posing significant uncertainty for global markets.

A few hours after Trump’s post, the Pentagon confirmed that the U.S. has deployed thousands of Marines to the Middle East. Israeli Defense Minister Israel Katz also emphasized on Saturday that joint U.S.-Israel military operations will be significantly strengthened.

Contradictions Richard N. Haass, a former member of the U.S. National Security Council, stated that Trump’s contradictory words and actions might reflect a new approach to the Middle East—namely, that while the U.S. has destabilized the region, others will bear the consequences.

The core of the U.S.-Iran conflict lies in the Strait of Hormuz. Since the outbreak of hostilities, the strait has been closed, disrupting about one-fifth of global oil and natural gas supplies, rapidly pushing up oil and gas prices.

In Trump’s phased de-escalation tweet, he pointed out that the guarding and patrol of the Strait of Hormuz should, when necessary, be undertaken by other countries using the strait, and the U.S. will no longer bear this responsibility.

Analysts believe that, given Trump’s emphasis on maintaining military pressure while urging major energy-consuming countries like Japan and South Korea—who rely on the Strait of Hormuz—to expand their influence in Iran, his remarks seem more like a signal of a turning point in the conflict rather than a simple ceasefire.

The term “gradual de-escalation” is currently interpreted by military experts as a shift from full-scale escalation to limited intervention, or maintaining air strikes while reducing the likelihood of ground invasions.

From this perspective, Trump’s de-escalation remarks do not guarantee a drop in oil prices, as ongoing conflict makes it unlikely for the Strait of Hormuz to return to normal flow. Analysts remain cautious, noting Trump’s recent inconsistent stance over the past three weeks and advising investors not to take his words at face value.