Trump’s Iran Speech Disappoints Markets

SPEAKER_1 (0:00)

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Luke Vargas (0:21)

President Trump makes the case that the war in Iran is nearing an end, even as major attacks loom.

SPEAKER_3 (0:28)

We are going to hit them extremely hard over the next two to three weeks. We're going to bring them back to the stone ages where they belong.

Luke Vargas (0:37)

Plus, let the battle of the weight loss pills begin as Eli Lilly's pill gets approved, and could nursing be the ticket to the elusive modern middle class? It's Thursday, April 2nd. I'm Luke Vargas for The Wall Street Journal, and here is the AM Edition of What's News, the top headlines and business stories moving your world today. In an address to The Nation last night, President Trump made his case that the month-old war in Iran was in America's interests and that any economic pain stemming from it would be over soon. Journal National Security correspondent, Shelby Holliday, tracked Trump's remarks for us.

Shelby Holliday (1:20)

The biggest point of confusion that President Trump tried to clear up during his speech seemed to be about the timeline of the war. He went out of his way to allay fears that the US is being dragged into a prolonged conflict and that US troops could be tied up in Iran for months or maybe even years.

SPEAKER_3 (1:37)

Thanks to the progress we've made, I can say tonight that we are on track to complete all of America's military objectives shortly, very shortly.

Shelby Holliday (1:46)

He laid out the timelines for other previous wars, which I found to be interesting. And then he said, we've only been in Iran for 32 days.

SPEAKER_3 (1:54)

They were the bully of the Middle East, but they're the bully no longer. This is a true investment in your children and your grandchildren's future.

Shelby Holliday (2:03)

He did not address in any way whether the US would try to help reopen the Strait of Hormuz or whether the US would lead convoys of ships to get the flow of oil moving again. Obviously, those efforts would keep the US troops over there for months. I mean, that could be quite a lift militarily.

SPEAKER_3 (2:18)

The United States imports almost no oil through the Hormuz Strait and won't be taking any in the future. We don't need it. We haven't needed it and we don't need it.

Shelby Holliday (2:29)

One of the other things I found to be interesting is he gave the Gulf countries a big shout out.

SPEAKER_3 (2:34)

Israel, Saudi Arabia, Qatar, the UAE, Kuwait and Bahrain, they've been great and we will not let them get hurt or fail in any way, shape or form.

Shelby Holliday (2:48)

And I wasn't sure if that meant militarily, their infrastructure has been hit by missiles and drones and they've been attacked or if it meant economically because these countries export a lot of oil, most of their oil, through the Gulf and out of the Strait of Hormuz. The Gulf countries are very nervous that the US could, you know, declare that mission is accomplished, they leave the region, the Strait of Hormuz remains shut down or effectively controlled by Iran and then their oil exports are held hostage. So he spoke to those concerns.

SPEAKER_3 (3:16)

The countries of the world that do receive oil through the Hormuz Strait must take care of that passage. They must cherish it. They must grab it and cherish it. They can do it easily. We will be helpful, but they should take the lead in protecting the oil that they so desperately depend on.

Shelby Holliday (3:35)

But he didn't promise or say whether the US would help get oil shipments moving again, whether the US would try to forcibly reopen the Strait or lead a convoy effort to get ships out. So he left a lot of questions unanswered.

SPEAKER_3 (3:48)

Iran has been essentially decimated. The hard part is done, so it should be easy. And in any event, when this conflict is over, the Strait will open up naturally. It'll just open up naturally. They're going to want to be able to sell oil because that's all they have to try and rebuild. It will resume the flowing and the gas prices will rapidly come back down.

Luke Vargas (4:13)

Trump also predicted that stock prices will rapidly go back up and that the US economy is quote, strong and improving by the day. Though for now, investors seem to be bracing for continued disruption. US stock futures began sliding during Trump's speech and remained down more than a percent heading into today's trading session. Asian equities fell today, led by a more than 4% drop in South Korea's COSPI index after new data showed that surging energy prices triggered a jump in consumer inflation and oil prices have climbed more than 5% in early European trading, with analysts at ING saying that Trump's threat to strike Iran extremely hard in the coming weeks had injected fresh uncertainty into energy markets.