US President Donald Trump spoke at a press conference in the Oval Office and praised Vice-President JD Vance’s work on Iran, saying he “has done a very good job on Iran”. He said the US had been “called this morning by the right people on Iran”, and that they “want a deal”.
Trump said Iran did not agree to not having a nuclear weapon, and said the US would “get nuclear material back”. He also reiterated that the US blockade of the Strait of Hormuz has started.
Market Reaction And Immediate Signals
He said China’s President Xi wants the situation ended. Trump also said the US may stop by Cuba after it is finished with Iran.
Gold prices rose from around $4,730 to $4,741 before falling back to $4,734. The Dow Jones Industrial pared earlier losses and was flat at 47,926, while the US Dollar Index (DXY) fell 0.09% to 98.61.
Given the conflicting messages of a blockade and a potential deal, we should expect extreme volatility in the coming weeks. The CBOE Volatility Index (VIX), which jumped over 30% last week to near 28, is the most direct way to play this uncertainty. Traders should consider buying call options on the VIX to profit from the sharp price swings that are likely to follow.
The blockade of the Strait of Hormuz is the most critical factor for the energy markets, as nearly a fifth of the world’s daily oil supply passes through it. We should be buying long-dated call options on crude oil futures, like WTI and Brent, to position for a supply shock. A sustained blockade could easily push Brent crude well past the $150 per barrel mark we saw briefly in 2025.
We saw a similar situation back in 2019 when drone attacks on Saudi facilities temporarily knocked out 5% of global supply, causing oil to spike almost 20% in a single day. The current situation is far more severe, suggesting any escalation will have a much larger and more sustained impact on prices. This historical precedent means we should not underestimate how quickly the market can move.
Portfolio Positioning For Escalation Risk
Higher energy costs will act as a tax on the global economy, likely pushing major stock indices lower. The Dow’s flat reaction seems to be wishful thinking, focused on the possibility of a deal rather than the reality of a blockade. We should look at buying put options on the S&P 500 and the Dow Jones Industrial Average as a hedge against a market downturn.
The most direct losers from a blockade are global shipping and logistics companies, especially oil tanker operators. This presents a clear opportunity to buy puts on major maritime transport stocks. Their operating costs will soar due to insurance premiums and the need for longer, alternative routes, directly hitting their profitability.
Gold remains the primary safe-haven asset in this environment, and its initial jump shows its sensitivity to this crisis. Central banks have been steady buyers, absorbing over 800 tonnes in 2025 alone, which provides a strong floor for the price. We should add to positions in gold futures or call options on gold ETFs to protect against further geopolitical deterioration.
