Analyzing Trump’s conflicts over the past year, this article outlines ten stages of his conflict strategy, revealing the internal logic between war, market volatility, and eventual negotiations. It helps investors see through the market mechanisms behind news in highly uncertain environments. This article is based on @KobeissiLetter’s work, organized, translated, and written by BlockBeats.
(Background: After crude oil prices surged 9%, Trump took action! Navy escort in the Hormuz Strait + DFC war risks, BTC defies the trend and surpasses $71,000)
(Additional context: Trump attacks banking sector over “阻擋天才法案”: unacceptable, stablecoin interest payments align with US interests)
Table of Contents
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- Step 1: Almost all conflicts originate similarly
- Step 2: Strategic posture vs. actual deployment
- Step 3: The “strike” on Friday night
- Step 4: Risk premiums spread across asset classes
- Step 5: Trump hints that conflict may be “long-term”
- Step 6: Markets start pricing in long-term conflict
- Step 7: Emergence of “conditional de-escalation signals”
- Step 8: Feedback loop between markets and politics
- Step 9: Reaching agreements and narrative shaping
- Step 10: Sharp asset re-pricing and political “victory narratives”
- What might happen in the next 2–4 weeks
- Final point: Don’t forget the real goal
- About our strategy
Editor’s note:
Amid escalating Iran tensions and market volatility, investors are most prone to emotional reactions to news itself. But from a longer-term perspective, the multiple trade conflicts, geopolitical frictions, and policy games surrounding Trump’s administration often follow a similar pattern: first, pressure is built through public statements and deterrence; then actions are gradually escalated; finally, after sufficient risk and stakes accumulate, negotiations resume.
This article attempts to analyze this “conflict—escalation—pricing—negotiation” structure, breaking down Trump’s decision-making pattern over the past year into observable market rhythms. For financial markets, the key isn’t just the event itself, but how the market prices in the worst-case scenario and how it quickly reverses when uncertainty diminishes.
Within this framework, oil prices, stock market swings, and safe-haven capital flows not only reflect risk but also become part of the political game. Understanding this logic may help clarify the market mechanisms behind news in highly uncertain environments.
Below is the original text:
The Iran war is escalating. Over the past 12 months, we systematically analyzed all geopolitical conflicts involving President Trump. What might happen next? This clear guide explains potential future developments and what they mean for investors and financial markets.
Before we begin, save this article— it will be an important reference for your market outlook over the next 2 to 4 weeks.
On January 17, 2026, we published our first “playbook,” titled Tariff Playbook. At that time, Trump was intensifying tariffs on the EU and pushing a strategic plan to acquire Greenland. As it turned out, this article nearly precisely predicted the outcome of Trump’s latest round of tariffs down to the date. How did we do it?
Since Trump’s inauguration on January 20, 2025, we spent hundreds of hours systematically analyzing news and developments related to his geopolitical and trade war actions. Through this research, we identified a very clear pattern: when Trump tries to achieve an economic or military goal, he tends to use a similar negotiation and pressure approach toward allies and adversaries.
Throughout 2025 and early 2026, we incorporated this pattern recognition into our investment strategy. Today, we believe it’s a good time to share this method with the X platform and the broader public. We hope it can help everyone find a reference framework amid market volatility.
Step 1: Almost all conflicts originate similarly
First, let’s review how the Iran war began.
This conflict didn’t truly start with the first strike on Iran on February 28—it was already foreshadowed weeks earlier.
In the weeks leading up to the war, President Trump repeatedly posted statements like: “A massive Armada is heading to Iran,” and urged Iran to “make a deal.”
President Trump—Truth Social (January 28, 2026)
The Iran war is the largest conflict Trump has engaged in during his second term. But if you look back at the past 6 to 8 weeks, you’ll see that Trump’s approach is almost identical in logic to his previous trade wars and even the way he captured Maduro in Venezuela.
Why is that?
Of course, the specific military actions differ, but the underlying negotiation and pressure strategies follow the same historical pattern.
For example, consider this post from November 29, 2025: Trump announced “a complete closure of Venezuelan airspace and surrounding areas.” Note that this statement was issued over a month before the U.S. finally captured Maduro. In other words, before actual action, Trump had already signaled strong pressure and deterrence through a series of public statements and military signals.
President Trump—Truth Social (November 29, 2025)
Next, look at this post from Trump on Truth Social. Between January 1 and January 18, we saw multiple similar posts.
In these, Trump said, “It’s time to buy Greenland,” and kept pressuring and threatening Denmark. Just days later, Trump imposed broad tariffs on the EU.
President Trump—Truth Social (January 18, 2026)
Clearly, the first step of Trump’s “War Playbook” is to exert strong verbal pressure through public statements to force the target to “make a deal.”
Step 2: Strategic posture vs. actual deployment
The second step usually manifests as visible strategic preparations: before launching full-scale actions, military or policy moves are used to reinforce deterrence and credibility.
In Iran, this includes: redeployment of military forces; public coordination with allies; and Trump’s deployment of the so-called “Armada” to the Middle East.
Similar patterns appeared in Venezuela. The U.S. announced airspace closures and regional military deployments, with actual actions against Maduro happening later.
In trade wars, the pattern is equally clear: investigations, administrative reviews, and public notices often precede actual tariff implementation.
For example, on August 11, 2025, Trump met with Intel CEO Lip-Bu Tan. Just days earlier, Trump posted on Truth Social accusing Tan of “serious conflicts of interest” and calling for his immediate resignation.
A few days later, the Trump administration announced a “deal” with Intel to acquire a 10% stake in the company. As shown below, this investment yielded over 80% returns in less than two months.
Again, Trump’s goal is almost always to “strike a deal.”
Sometimes, conflicts end at this second stage. After initial threats and pressure “pave the way,” both sides negotiate and reach an agreement, resolving the situation at this stage.
If not, it moves to the third step.
Step 3: The “strike” on Friday night
When initial pressure fails to produce results, Trump usually escalates further, turning to military or economic measures.
A stable tactical feature of Trump’s escalation mode is timing. Many major announcements, strikes, or policy shifts happen on Friday nights—after U.S. markets close but before futures liquidity fully develops.
Why choose this timing? Because Trump is highly sensitive to market volatility.
Some key actions on Friday night or early Saturday morning include:
- U.S.-Israel joint airstrikes on Iran nuclear facilities—June 21
- U.S. interdiction of Caribbean drug ships—September 1
- Threats of 100% tariffs on China—October 10
- Closure of Venezuelan airspace—November 29
- Nigerian military operations—December 25
- U.S. airstrikes on Iran—February 28
Since 2025, many geopolitical or policy actions have occurred after market close on Fridays. This timing appears deliberately strategic.
If major geopolitical events break during trading hours, market price discovery often becomes disorderly: liquidity drops sharply, quant algorithms amplify volatility, and intra-day swings can trigger panic cascades.
In contrast, announcing actions on Friday night creates a buffer period.
Investors, institutions, and governments can use the weekend to digest information, assess risks, consult advisors, and simulate scenarios.
By the time markets reopen, all parties have a more comprehensive view of the situation.
For the Iran case, this critical moment was February 28. Usually, before the same week’s Sunday (pre-futures open), Trump signals “possible deal” to ease market expectations.
But this time, it didn’t happen, and the situation moved to the fourth step.
Step 4: Risk premiums spread across asset classes
After the shock of Step 3, when futures markets open at 6 p.m. EST on Sunday, asset prices often experience sharp swings.
However, markets still doubt whether the conflict will last long.
The reason is simple: everyone knows Trump ultimately hopes to strike a deal. So, initial wild swings in stocks, commodities, and bonds often retreat before Monday’s open.
For example, look at the market on March 2 (the day before we wrote this article): crude oil and S&P 500 movements exemplify this typical response.
S&P 500 and WTI crude—March 2, 2026
WTI oil surged briefly, recouping about 70% of its gains, and the S&P 500 even turned positive temporarily. But today, the trend reversed again—oil hit new highs, stocks hit new lows.
This change reflects Trump’s clear understanding: markets also know he prefers “getting to a deal.” So, despite market bets on a quick resolution, the reality is that conflicts continue escalating.
Now, we enter the fifth step.
Step 5: Trump hints that conflict may “persist long-term”
When investors expect Trump to “step back” and quickly buy the dip, they are often caught off guard by sudden shifts. As headlines worsen, many believe Trump will soon ease pressure. But the reality is often the opposite.
As shown in his March 2 statements, Trump now says, “The war can go on forever,” and claims the U.S. has “unlimited mid- and high-end weapons.”
Note that “forever” is in quotes. It’s a tactical phrase: Trump is signaling he doesn’t want a war to truly last forever, but if necessary, the U.S. is fully capable of doing so.
This is also a negotiation tactic.
President Trump—March 2 & 3, 2026
Since the Iran conflict erupted, even before the war truly began, our assessment has been that Trump would not benefit from a prolonged war. Despite recent references to “forever war,” we maintain this view.
Why? Because Trump’s top policy goals include: becoming a “peace president,” lowering inflation, and reducing U.S. gasoline prices to $2 per gallon.
A long-term Iran war directly conflicts with these core objectives. Especially in an election year, short-term conflicts that escalate and persist would significantly impact these agendas.
Step 6: Markets begin pricing in long-term conflict
By March 3, it appears our “playbook” step six is emerging.
Look at the market performance:
Brent crude hits over $85/barrel—first time in nearly two years;
U.S. stocks have fully retraced previous gains and hit weekly lows;
Market risk aversion surges, capital rapidly exits risk assets.
On that day, the Dow dropped about 1,100 points in a single session.
U.S. markets and commodities—March 3, 2026
At this stage, markets no longer see this as a short, symbolic military clash.
Oil at over $85/bbl reflects not just a weekend skirmish but prices for supply chain risks, rising tanker insurance costs, and potential partial closure of the Strait of Hormuz.
Meanwhile, U.S. stocks hitting weekly lows are not just reacting to headlines but are reassessing the duration risk of the conflict.
This is precisely the psychological turning point Trump’s strategy aims to create.
The first decline often prompts investors to buy the dip, expecting a quick resolution. The second decline still sees buying, as they believe escalation is temporary. But by the third decline, market positioning begins to shift significantly.
“Smart money” tends to recognize when market sentiment is overly biased, especially as retail participation rises.
Since 2025, our investment approach has largely been based on this: how to identify Trump’s historical patterns in economic conflicts to anticipate market turns.
Since 2020, our strategy returns are nearly five times the S&P 500. In 2025 alone, our S&P 500 trading strategy achieved a 21.8% return, outperforming the index. The key is our ability to foresee critical shifts in market sentiment and trends.
“Kobeissi Letter” performance (2020–2025)
This brings us to step seven.
Step 7: Emergence of “conditional de-escalation signals”
Before explaining this step, note that the time between step six and seven can vary greatly. For example, during the 2025 trade war, this phase lasted months, culminating in a “tariff pause” on April 9. This shift was largely driven by the rapid rise in U.S. Treasury yields, as shown below.
Typically, some trigger (catalyst) prompts Trump to pause or ease tensions. This could be:
10-year U.S. Treasury yield—April 9 tariff “pause”
After risk premiums in stocks, commodities, and bonds widen significantly, Trump often releases carefully crafted easing signals. Note that these statements usually don’t mean genuine concessions.
In Iran, the situation could turn in two ways: either the Iranian government changes, or a major event with structural impact on the U.S. or global economy occurs.
At this stage, official rhetoric shifts toward conditional solutions. Statements emphasize: negotiations are possible if certain conditions are met; terms like “talks,” “consultations,” or “framework agreements” gradually enter the narrative. The core purpose is to test the opponent and market reactions without relinquishing strategic initiative.
Recent examples include:
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October 2025: Trump’s trade deal with China;
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January 2026: Greenland agreement with the EU;
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February 9, 2026: trade agreement with India.
These almost follow a pattern: threat → action → escalation → gradual de-escalation.
Step 8: Feedback loop between markets and politics
A often overlooked aspect of this strategy is that financial markets themselves become part of the negotiation environment. Trump has repeatedly shown high concern for stock performance, energy prices, and inflation expectations, viewing them as part of broader political narratives.
If the conflict drags on and causes oil prices to spike, it directly impacts his three core policy goals: positioning himself as a peace-oriented leader; controlling inflation; and lowering gasoline prices.
Rising energy costs quickly influence consumer sentiment and inflation data, which in turn affect political dynamics during mid-term elections.
According to JPMorgan estimates, if the Strait of Hormuz is closed, oil could rise to $120–130 per barrel, implying U.S. CPI inflation could reach about 5%.
The last time U.S. inflation hit 5% was in March 2023, during an aggressive rate hike cycle.
In the current environment, key indicators to watch include: Brent crude staying above $90/barrel, which would heighten inflation fears; a 5% or more drop in stocks, which would significantly shift investor sentiment; and gasoline prices rising over 10%, which would weigh heavily on consumer confidence.
Once these thresholds are approached or breached, the probability of news about negotiations surging increases sharply.
Important: this is precisely when “smart money” begins to position for buying—retail sentiment is often already collapsing at this point.
Step 9: Reaching agreements and narrative shaping
In the Iran scenario, step nine is conditional.
If the Iranian government collapses, the U.S. and Israel are likely to declare mission accomplished and military objectives achieved. In this case, the “tariff playbook” strategy ends before step nine.
If not, the process moves to the next stage: almost all major confrontations end with negotiated agreements, framed as strategic victories. The specific structure varies, but the narrative remains consistent: “maximum pressure” forces concessions.
In past trade conflicts, agreements have been portrayed as proof that escalation strategies yield economic advantages (e.g., trade deals with China, EU, India, Vietnam, Japan).
In corporate conflicts, initial public pressure is followed by equity investments or structural adjustments (e.g., Intel and rare earth agreements).
In geopolitical conflicts, ceasefire or framework agreements are seen as forcing opponents to compromise through tough stance (e.g., multiple conflicts ending in 2025).
If Iran’s conflict follows the established pattern, real resolution usually only occurs after sufficient leverage and pressure are demonstrated.
This could include: a nuclear-related ceasefire linked to concessions; regional security arrangements with enforcement mechanisms; or sanctions adjustments conditioned on compliance.
The specific agreement structure isn’t the most critical; what matters most is timing and narrative framing.
Step 10: Intense re-pricing of assets and political “victory narratives”
The final stage of Trump’s conflict strategy doesn’t end with the announcement of an agreement. The real endpoint is the market’s reaction and the subsequent political narrative.
Historically, once a clear resolution framework appears, markets don’t adjust gradually—they undergo rapid, intense re-pricing. This is mainly due to changes in positioning.
When negotiations become credible, investors tend to be highly defensive: energy assets rise sharply; equity risk exposure drops significantly; and volatility remains high due to uncertainty.
When this uncertainty suddenly lifts, these positions are quickly unwound, causing sharp price reversals.
Similar patterns occurred in April, August, October 2025, and January 2026, as shown below.
In past trade wars, announcing tariff suspensions or frameworks often led to swift stock market rallies, even if deeper structural issues remained unresolved. Similarly, during escalations in geopolitical conflicts, markets tend to fall sharply once shipping routes reopen or conflict scope narrows, reflecting risk premium unwinding rather than fundamental improvement.
This price re-evaluation is often very intense because the driver isn’t a fundamental improvement but a rapid decline in risk premiums. The market rises not because everything is perfect but because the probability of the worst-case scenario has been significantly lowered.
Again, even brief market pricing for “worst-case” scenarios is a key part of Trump’s negotiation strategy.
We maintain the view that if in the coming days or weeks, U.S.-Iran military actions do not cause the Iranian government to collapse, negotiations will eventually return to the table.
Trump does not want a “perpetual war,” as such a scenario conflicts with his economic goals.
What might happen in the next 2–4 weeks
Currently, the situation seems to be transitioning between peak escalation rhetoric and signals of conditional de-escalation. Compared to initial airstrikes, markets are now beginning to price in a more prolonged conflict.
Oil prices have broken higher, the brief rebound in stocks has faded, and defensive capital flows are accelerating.
Historically, this is a phase where pessimism begins to solidify in market positioning. But at the same time, the probability of negotiated resolution quietly rises beneath the surface, and “smart money” starts seeking trading opportunities.
This is already evident in the recent movements of silver and gold. Both metals have declined sharply—silver down about 20% in 24 hours—even as markets continue to reprice risk premiums.
This clearly indicates a large-scale retreat and wait-and-see behavior, with cash holdings increasingly seen as the safest hedge.
“Smart money” is often observing these capital flows.
Gold and Silver—March 3, 2026
Final point: Don’t forget the real goal
In the coming weeks, three main scenarios are likely:
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Conflict briefly escalates, pushing oil prices higher and stocks lower, then suddenly shifts tone with news of negotiations. Given prior market positioning, this could trigger rapid asset reversals once negotiations are announced.
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Conflict proceeds in a controlled but persistent manner. Oil remains high but not surging; stocks fluctuate with high volatility, awaiting further clarity. Resolution might come later this month after continued pressure.
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Regional conflict significantly expands—e.g., shipping routes are disrupted, more countries involved—pushing oil to triple digits and causing deeper re-pricing of risk assets. Given historical patterns and the current midterm election cycle, this is less likely but not impossible.
Ultimately, remember this: over the past 13 months, nearly every major conflict involving Trump has ended with an agreement.
Trump is fundamentally a dealmaker. Recognizing and following this pattern often yields benefits.
About our strategy
In today’s turbulent markets, investors who remain objective and adhere strictly to systematic methods are entering one of the most attractive trading environments in recent years.
It’s this objective, systematic approach that has allowed our strategies to outperform benchmarks continuously. Since 2020, our cumulative returns are nearly five times the S&P 500. In 2025 alone, our S&P 500 trading strategy achieved a 21.8% return, significantly outperforming the index.
