Key Takeaways:
President Donald Trump’s assertion of influence over Israeli Prime Minister Benjamin Netanyahu’s Iran policy adds a new political dimension to a conflict that has already roiled global markets for two months.
President Donald Trump asserted on May 20 that Israeli Prime Minister Benjamin Netanyahu is aligned with his strategy on Iran, a claim that reinforces the administration's projection of control over the two-month-long conflict. Speaking to the media, Trump stated he and Netanyahu share a unified position, adding that the Israeli leader “will do as I tell him” regarding Iran, even as he noted he is in no rush to conclude the conflict.
However, the president’s projection of absolute control comes as some Republicans begin to voice dissent on his broader policy maneuvers. “We are a nation of laws; you can’t just make up things,” Senator Bill Cassidy of Louisiana told NBC on Monday, criticizing a separate Trump initiative. “People are concerned about making their own ends meet, not about putting a slush fund together without a legal precedent.”
The president’s remarks are the latest in a series of statements that have whipsawed markets since the war began on Feb. 28. The conflict has pushed Brent crude prices as high as $110 a barrel and sent the S&P 500 to its lowest point of the year on March 30, according to data from The New York Times. Trump’s alternating threats of military force and claims of diplomatic breakthroughs have created significant volatility, with oil prices and stock indices reacting to his every utterance.
At stake is the stability of the global energy supply and the broader market, with about a fifth of the world’s oil and gas previously passing through the now-closed Strait of Hormuz. While Trump’s comments appear aimed at calming investors by projecting authority, his unpredictable approach has often had the opposite effect, leaving traders to weigh the credibility of his threats against his declarations of imminent peace.
The correlation between President Trump’s public statements and market volatility has been a defining feature of the Iran conflict. After the war began, his suggestions of a diplomatic off-ramp have repeatedly caused oil prices to dip, only to have them spike again when he reverts to threats.
For instance, on March 23, Trump’s instruction to postpone attacks on Iranian infrastructure caused Brent crude to close below $100 for the first time in nearly two weeks. Just days later, a March 30 post on Truth Social threatening to take out Iran’s energy infrastructure sent the S&P 500 to its lowest price of the year. This pattern repeated in April, with threats of destroying Iran’s “civilization” followed by a surprise cease-fire announcement that provided only temporary market relief.
Trump’s confidence in his ability to direct foreign leaders may be bolstered by his demonstrated power over his own party. His influence was recently on display in Kentucky’s primary, where his endorsed candidate, Ed Gallrein, defeated Representative Thomas Massie, one of the few congressional Republicans to openly criticize the president.
Massie’s loss serves as a stark warning to other Republicans, demonstrating that crossing Trump carries a significant political price. This consolidation of power within the GOP allows the president to act with a freer hand on the world stage, confident that his domestic political flank is secure. The defeat of a critic like Massie, who opposed the Iran war, reinforces the message that loyalty to Trump is paramount, a fact that international leaders like Netanyahu must certainly factor into their own political calculations.
This article is for informational purposes only and does not constitute investment advice.
