Trump Signals Possible Action on Iran as Markets Rally on Hopes of Resolution

US President Donald Trump has warned Iran that “the clock is ticking,” stating that the country must move fast or risk severe consequences, amid escalating tensions in the Middle East.

Trump’s comments, made ahead of a scheduled Situation Room meeting, have fueled expectations of imminent decisions on the ongoing standoff. He emphasized that the United States is in the final stages of talks with Iran while noting the significant degradation of Iranian capabilities, including its navy. The president reiterated his firm stance against allowing Iran to develop a nuclear weapon, warning that such a capability would immediately threaten Israel.

Deadline pressure and military options

Discussions highlighted that Iran’s economy is under severe strain, with its security forces potentially losing control. Advisers have reportedly urged bold action if diplomacy fails, including taking control of Kharg Island, securing Iran’s oil resources, opening the Strait of Hormuz, targeting Revolutionary Guard leadership with Israeli assistance, and removing enriched uranium using special forces.

Vice President JD Vance stated the administration is “locked and loaded” but prefers a diplomatic reset after 47 years of strained relations. “It takes two to tango,” Vance said. “We are not going to have a deal that allows the Iranians to have a nuclear weapon.”

Analysts noted that prolonged closure of the Strait of Hormuz has disrupted energy supplies, pushing oil prices above $100 per barrel and keeping US gas prices around $4.50 per gallon, impacting public sentiment. A New York Times/Siena poll indicated 64% of respondents viewed potential war with Iran as the wrong decision.

Markets react positively to Trump’s remarks

Trump’s statements at the Coast Guard Academy graduation triggered an immediate market response. Stocks rose sharply, with the Dow Jones Industrial Average gaining nearly 500 points, while Treasury yields fell. The 10-year yield dropped eight basis points as oil prices declined.

Great Hill Capital Chairman Thomas Hayes said the developments suggested a potential shift in market regime. “If there’s follow-through on this and this is real… you’re going to see a different regime in the market in coming months,” Hayes noted. He highlighted expectations for lower gas prices, declining yields, and broader gains across cyclicals, dividend stocks, and defensives once the Iran situation resolves.

Panelists including Brian Brenberg and Taylor Riggs discussed yield movements, noting recent increases were largely driven by oil-related inflation concerns rather than structural fiscal issues. They observed that resolving the conflict could ease pressure on energy prices and broader markets. Charles Payne pointed out the resilience of the market, powered largely by technology and semiconductor stocks, despite narrow breadth in recent sessions.

Nvidia CEO on AI growth and national security

In a separate interview, Nvidia founder and CEO Jensen Huang addressed the company’s role in the AI boom and its contributions to US national security.

Huang emphasized that AI infrastructure buildout is creating significant manufacturing jobs in the United States, including chip plants, packaging facilities, and data centers. He described AI as ushering in the largest manufacturing industry in the world, centered on the “production of intelligence.”

Regarding competition and China, Huang noted that Nvidia continues to gain market share even as the overall AI market expands. He pushed back against AI “doomers,” stating that concerns about job losses represent “a disservice to society.” Huang argued that AI creates jobs, augments workers, and will lead to everyone having an AI assistant. “AI creates jobs,” he said. “You’re not going to lose your job to AI. You’re going to lose your job to someone who is an expert in using AI.”

Huang highlighted partnerships, such as with Corning, and acquisitions aimed at building out the full AI ecosystem—from energy to applications. Nvidia recently announced an $80 billion share buyback and increased its dividend.

The developments come as the Middle East remains on edge, with potential for wider conflict if diplomacy fails in the coming days.