On Saturday, Trump threatened to bomb Iran in 48 hours. This morning, he announced a five-day pause on that threat, saying the two sides are having "very good and productive conversations" toward a deal. Dow futures jumped 1,000 points and oil fell 13%.

Then Iran said the talks aren't happening.

So, about that rally… will it stick?

The next five days will tell us whether this morning's surge was earned or whether the market just got played. We break it down below.

This is not financial advice. Always do your own research. Past performance doesn't guarantee future results.

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Saturday morning, Trump posted a 48-hour ultimatum: reopen the Strait of Hormuz or face US strikes on Iranian power and energy infrastructure. Markets braced for the worst.

This morning, the posture flipped. The administration announced a five-day delay on all military action, and Trump cited "very good and productive conversations" with Iranian leadership in his Truth Social post. The market reaction was immediate: Dow futures jumped over 1,000 points, Brent crude fell more than 13% to $105.09, and WTI dropped nearly 12% to $85.93. After four straight weeks of losses and the Russell 2000 entering correction territory, investors took the news and ran with it.

Then Iran's foreign ministry denied the whole thing. No talks, no negotiations, no deal in progress. Tehran called Trump's remarks "part of efforts to reduce energy prices and buy time to implement his military plans” (The Guardian).

That contradiction is now the center of gravity for every market move this week. The five-day window expires Friday. A confirmed deal or Strait reopening could send oil back toward $70 and gives equities real room to recover. A breakdown (or silence) might send everything the other direction.

This feels like the biggest TACO trade attempt yet, except Iran isn’t playing ball with Trump. It could be that this is just psychological warfare on Iran, or it could just be that Trump’s trying to lower energy prices like Iran said. But markets are still up regardless of Iran’s denial.

Markets are green this morning on President Trump’s announcement of productive talks with Iran, though we’re unclear if those talks actually happened based on Iran’s denial of them.

Fed Chair Jerome Powell acknowledged Wednesday that rising energy prices will push up headline inflation in the near term, though he said it's "too soon to know the scope and duration" of the effects. Bond traders are now pricing in a 50% chance of a rate hike by October, a stunning reversal from pre-war expectations and a sharp contrast to the Fed's own projections of one cut this year and one in 2027.

AI continues its "show me" phase. OpenAI has quietly retreated from ambitious infrastructure plans, slashing its eight-year compute spending target from $1.4 trillion to $600 billion ahead of a potential IPO this year. The company is now leaning heavily on cloud partners like Oracle, Microsoft, and Amazon rather than building its own data centers. Nvidia CEO Jensen Huang said earlier this month that the chipmaker's $100 billion OpenAI deal is probably "not in the cards." Meanwhile, tech stocks have plunged over 20% year-to-date as investors grow skeptical that massive AI spending will translate into proportional returns.

A silver lining emerged for tech bulls: the correlation between Big Tech and the broader S&P 500 has broken down, suggesting the Magnificent Seven's struggles may not drag the entire market lower.

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Cheers,
Brandon & Blake of Invested Inc