Trump Dashes Hopes of Ending Middle East Conflict

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In a 19-minute prime-time address, U.S. President Donald Trump dashed hopes of an end to the war in the Middle East, vowing to hit Iran "extremely hard" over the next two to three weeks. The prospect of a prolonged conflict and continued closure of the Strait of Hormuz sent global stocks tumbling, the U.S. dollar surging, and oil prices soaring past $100 per barrel, fueling concerns over a stagflationary economic environment.

Why it matters

The escalating tensions in the Middle East and the resulting energy crisis pose a significant threat to the global economy, which is still recovering from the impact of the COVID-19 pandemic. The potential for prolonged high energy prices, supply chain disruptions, and reduced consumer spending could push many countries into a period of slow growth and rapid inflation, known as stagflation.

The details

After a brief period of optimism earlier this week that the month-long conflict could be nearing an end, Trump's speech reversed those gains as investors quickly exited risk positions. With the Strait of Hormuz remaining closed, cutting off a crucial global oil supply route, Brent crude futures surged back above $100 per barrel. U.S. stock futures and European futures pointed to a sharp selloff at the open, while Asian markets were a "sea of red" with most bourses sliding significantly. U.S. Treasuries also fell as the prospect of stagflation loomed.

• On April 2, 2026, President Trump delivered a 19-minute prime-time address.
• The Strait of Hormuz has remained closed for over a month, disrupting global energy supplies.

What they’re saying

What’s next

Investors are bracing for a prolonged energy shock that could spur concerns over stagflation, with major Western markets closed on Good Friday. Any further escalation or developments in the Middle East conflict over the weekend could lead to significant market volatility when trading resumes.