President Donald Trump’s declaration that he had “completely” won the seven-week war with Iran has been contradicted by his own administration’s actions and a flurry of confused statements, leaving markets volatile as a fragile ceasefire nears its expiration.
The White House’s conflicting messages on the Iran war have injected significant uncertainty into global markets, with President Trump’s claims of victory clashing with the reality of ongoing tensions and last-minute negotiations.
“One of the big differences between the current round of US-Iran diplomacy and prior rounds is that this administration and the President in particular are unreliable narrators,” Eric Brewer, a former National Security Council official, said on social media. “We’ve never had to contend with a US president that is so outspoken and prone to exaggeration, fabrication, and outright lies.”
The disconnect was stark over the last week. After Trump claimed Friday that Iran had “agreed to everything,” prompting a brief market rally, Iranian officials publicly refuted the assertions and temporarily closed the Strait of Hormuz again. The president’s own statements have been inconsistent, claiming on Monday that Vice President JD Vance was already in Pakistan for talks, only for Vance’s motorcade to be spotted at the White House shortly after.
With a two-week ceasefire set to expire midweek, the diplomatic whiplash puts the global economy on edge. A failure to secure a deal could reignite a conflict that has already pushed gasoline prices over $4 a gallon and contributed to a slide in Trump’s approval rating to 37 percent, according to a recent NBC News/SurveyMonkey poll. The next few days will determine whether the president’s chaotic approach to diplomacy can secure a peace deal or if it will lead to a dangerous military escalation.
The administration’s public communications have been marked by a cycle of triumphant declarations followed by immediate backtracking, creating a fog of war that has baffled allies and analysts. On Friday, Trump made a series of calls to journalists claiming major Iranian concessions, including an “unlimited” moratorium on nuclear activities and an end to its support for proxy groups.
Iranian officials quickly denied the claims. “The President of the United States made seven claims in one hour, all seven of which were false,” Iranian parliamentary speaker and key negotiator Mohammad Bagher Ghalibaf posted on social media.
This follows a pattern of inaccuracies from the president, who recently claimed Pope Leo XIV endorsed Iran having a nuclear weapon—a statement the Vatican denied—and that Iran’s military was “gone,” despite its demonstrated ability to disrupt global trade. The confusion extends to his own cabinet’s movements, with Trump incorrectly stating Sunday that Vice President Vance would not lead the delegation to Pakistan for security reasons, a claim senior officials contradicted on live television.
Some White House officials privately acknowledged to CNN that the president’s public commentary has been detrimental to the sensitive negotiations, as the Iranians are concerned about appearing weak or being seen as caving to US demands.
As the ceasefire deadline looms, all eyes are on Islamabad, where a second round of US-Iran talks is expected to begin Wednesday. The negotiations are fraught with challenges, centering on several red lines drawn by both sides. The US is demanding a permanent freeze on uranium enrichment and the surrender of Iran’s existing stockpile of near-bomb-grade material. In return, Iran is insisting on the right to control the Strait of Hormuz and a lifting of crippling US sanctions.
During the first round of talks, American negotiators proposed a 20-year pause on enrichment, which Iran countered with a five-year proposal. A potential compromise for a 10-year pause is reportedly on the table. As part of a deal, the Trump administration is also considering unfreezing $20 billion in Iranian assets in exchange for Tehran turning over its highly enriched uranium.
The success of these talks rests heavily on Vice President Vance, who faces immense pressure to deliver a deal that meets Trump’s maximalist demands without appearing to be a repeat of the Obama-era nuclear accord, which Trump has frequently derided.
Financial markets have been on a roller coaster, initially surging on hopes of a peace deal before pulling back as the administration’s narrative unraveled. Stock index futures saw gains Tuesday morning on renewed optimism for talks, but the underlying uncertainty continues to weigh on sentiment.
“Despite the recent pullback, US valuations continue to look elevated – both relative to other regions and compared with its own history,” said Hetal Mehta, chief economist at St. James’s Place, who remains underweight on the American market.
The conflict has created clear winners and losers. Defense sector stocks have rallied, with the GCC’s successful interception of over 2,000 projectiles validating billions in military spending and positioning regional defense firms like the UAE’s EDGE Group for a boom. Conversely, the risk of a wider conflict has created a stagflationary threat. JPMorgan recently lifted its year-end S&P 500 target to 7,600, but noted the forecast could approach 8,000 if the conflict is resolved swiftly, highlighting the significant economic upside of a peace deal.
This article is for informational purposes only and does not constitute investment advice.
