President Donald Trump told reporters on Friday that he was not interested in a mutual ceasefire with Iran. However, less than 24 hours later, Trump posted on his Truth Social platform that the U.S. is considering a gradual de-escalation of major military operations against the Iranian regime in the Middle East, stating that the U.S. is very close to achieving its strategic objectives. This statement came just moments after reports suggesting the U.S. government might soon deploy ground forces to seize Iran's key oil export hub on Kharg Island sent U.S. stocks sharply lower, with the international oil benchmark Brent crude briefly approaching $115 per barrel. Later on Friday, the narrative shifted again, with sources indicating the U.S. is developing a strategic plan to seize Iran's "nuclear reserves."

As the latest round of Middle East geopolitical conflict entered its 21st day, global financial markets experienced a dramatic reversal from extreme pessimism to a glimmer of hope within a single trading day on Friday. Yet, Trump's contradictory statements have reinforced market belief that a short-term "TACO" trading moment is imminent. The increasingly popular Wall Street strategy known as TACO (Trump Always Chickens Out) emerged in April 2025 during Trump's unprecedented "reciprocal tariffs" campaign. Traders bet that either the U.S. government would withdraw its tariff threats, or that any implemented tariffs would be far less severe than threatened and insufficient to significantly hinder U.S. economic expansion. The term was coined by a Financial Times columnist to describe Trump's vacillation on tariffs following his April 2nd "Liberation Day" speech, ultimately expecting him to back down, leading to a strong stock market rebound. When asked about "TACO" during a press conference, Trump became furious, calling the question "vicious." The TACO strategy is now widely adopted by traders as a top strategy; whenever Trump issues new, aggressive tariff threats or other major warnings causing market plunges, investors bet he will ultimately retreat or that implemented policies will be significantly weaker than his rhetoric, leading them to buy the dip and bet on a subsequent market rally.

Trump's contradictory statements and the volatile market were on full display. Before departing for Florida, Trump stated on the South Lawn of the White House, "We certainly can have conversations, but I don't want a ceasefire. You know, you don't have a ceasefire when you are, essentially, wiping them out completely." He added, "They have no navy. They have no air force. They have nothing." However, in a Truth Social post later on Friday afternoon, Trump claimed the U.S. is "very close to achieving our goals, and we are also considering gradually winding down our great military operations in the Middle East." He also asserted that the Strait of Hormuz, a critical channel for global oil and LNG trade, "will have to be patrolled and escorted by warships from other nations that use it, when necessary—but the U.S. does not need to!" Trump wrote, "If requested, we will provide some level of assistance in these nations' operations in the Strait of Hormuz, but once the Iranian threat is completely eliminated, this should not be necessary. Importantly, this will be a very easy military operation for them."

Trump's comments came as the U.S.-Israel war against Iran approached its third week, evolving into a broader regional geopolitical conflict. Earlier on Friday, Trump said the U.S. could end the war "now," but he planned to continue the offensive. "I think we have won," he later stated on the South Lawn, "What they are doing now is just blocking the Strait. But from a military standpoint, they are finished." Since the war began, Iran has effectively blockaded the strait. Trump has consistently criticized NATO allies, seeking more support to help reopen the waterway; he reiterated on Friday that it is not critically important for the United States. Most energy shipments through the strait are destined for Asian and European markets. However, a Federal Reserve Bank of Dallas report released on Friday indicated that the economic impact of a prolonged closure by Iranian forces would ripple globally, including to the U.S. Speaking to reporters on Friday, Trump said reopening the strait would be simple if other countries assisted the U.S. "It's a simple military move, relatively safe," he emphasized. "But you need a lot of help, meaning you need ships, you need a convoy size. NATO could have helped us, but so far, they haven't had the courage."

Just before Trump signaled a potential de-escalation, rumors of "U.S. ground forces preparing to seize islands in the Iranian Strait of Hormuz region" were widespread. Reports on Friday suggested the White House was sending hundreds of Marines to the Middle East while weighing a plan to deploy ground troops to seize Iran's Kharg Island oil export hub. Brent crude had been consolidating increasingly firmly around $110 per barrel, suggesting high oil prices might be a persistent major threat that investors, central bankers, and corporate leaders must confront. The de facto Iranian blockade of the Strait of Hormuz has obstructed about 20% of global energy flows, accompanied by tanker attacks and shipping disruptions. A recent International Energy Agency (IEA) study indicated that the late February U.S.-Israel military strikes on Iran triggered the largest supply disruption in global oil market history. Simultaneously, the U.S. government is considering military options, including potential ground or quasi-ground control, to restore shipping lanes and secure the Strait of Hormuz. However, the key challenge is that while blockading is easier, maintaining a blockade or contesting control requires a sustained, powerful military presence, and reopening the channel is even more difficult, potentially leading to a prolonged stalemate reminiscent of the 1980s Iran-Iraq War if the U.S.-Israel and Iran become locked in a "channel control game."

During Friday's U.S. trading session, the "ground forces seizing islands" rumor catalyzed a sell-off, with the Nasdaq Index leading the decline among major indices, falling 2% intraday. Since the U.S.-Iran conflict began, the Dow Jones Industrial Average and small-cap indexes have lost nearly 7%. Just as the market digested a day of escalation signals, Trump's after-hours Truth Social post showed a clear shift in tone. Traders widely interpreted this as a reversal of the earlier escalation signals. The SPDR S&P 500 ETF Trust, which tracks the S&P 500, rose over 1% in after-hours trading after closing down 1.5% during the regular session, while Brent crude retreated from near $115 to trade around $108.

Is a short-term "TACO" play unfolding? The market might trade briefly on Trump's statement about "winding down operations" but may not genuinely believe the war is entering a sustainable de-escalation phase. Trump publicly states he "doesn't want a ceasefire" while also saying he is considering scaling back military operations; concurrently, the U.S. is deploying approximately 2,500 additional Marines and vessels to the Middle East. More importantly, multiple media reports disclose that Washington has discussed more escalatory options, including sending ground forces to Iran's Kharg Island and using U.S. troops to secure Iran's stockpile of highly enriched uranium. For macro markets, this is not a consistent "policy shift" but a coexistence of verbal cooling and preparatory actions. Therefore, the market may not interpret it as confirmation the conflict is nearing an end but might engage in short-term speculation driven by the TACO strategy. A short-term "TACO moment" could arrive next week, but it is certainly not the actual, longer-term version of the "TACO trade." The accelerated rebound in after-hours U.S. stock futures and the S&P 500 ETF indicates some capital is willing to bet on a "temporary softening of Trump's geopolitical stance." However, broader asset pricing suggests global investors are not truly convinced by narratives of a ceasefire or the Strait of Hormuz reopening. For instance, Bitcoin, a barometer for risk assets, traded with minimal changes on Saturday, slightly down 0.1% from recent levels.

Judging from the联动 of crude oil, the U.S. dollar, and equities, the market's core assessment is that Trump's rhetoric might change sentiment for one evening but cannot alter a quarter's worth of supply shock. Brent prices have risen approximately 50% since the war began, reaching levels not seen since July 2022. U.S. airline giant United Airlines has even prepared operational cutbacks based on a scenario where oil could rise to $175 per barrel and remain above $100 through late 2027. Furthermore, short-term conflicting messages will impact the TACO strategy. For example, the latest reports indicate that sources say the U.S. is formulating a strategic plan to seize Iran's "nuclear reserves." Wall Street giant Goldman Sachs recently published a report stating that oil prices are likely to continue rising in the short term due to severely depressed flows through the Strait of Hormuz. If the low flow levels focus market attention on the risk of prolonged disruption, Brent futures prices could surpass the 2008 historical high. The institution believes that, considering recent attacks on energy infrastructure, the Iran war has a high probability of pushing oil prices above $100 for an extended period. Goldman Sachs' report analyzed the five largest historical supply shocks, noting that production remained 42% lower on average four years later, often reflecting infrastructure damage and low investment. Goldman Sachs data shows that Iran and seven other Persian Gulf countries produced 3.5 million and 21.8 million barrels per day of crude oil in 2025, respectively, accounting for 30% of global supply; sustained production cuts would exert long-term upward pressure on prices. Goldman's scenario analysis indicates that oil price risks remain skewed to the upside, both in the short term and by 2027. The persistence of historical major supply shocks and the tendency for geopolitical conflicts to evolve into prolonged standoffs highlight the risk that oil prices could remain above $100 per barrel for an extended period if disruptions are prolonged and significant supply losses persist.