Trump’s 48 hours to Iran: if Hormuz is not opened, they’ll blow up power plants and bridges—oil prices surge to $110

CNBC report: Trump issues a final deadline warning to Iran using profanity-laced language on April 6—if the Strait of Hormuz is not reopened by 8:00 p.m. Tuesday (April 8) Eastern Time, the U.S. will launch attacks on Iran’s power plants and bridges, calling that day “power plant day, and bridge day.” On the same day, in an interview with Fox News, he also said there is “a very good chance” of reaching a peace agreement before Monday.

Conflicting signals have forced investors to position for two starkly opposite outcomes at the same time.

Iran rejects the deadline and continues strikes on Gulf targets

Tehran rejected Trump’s deadline demands, saying the strait will fully reopen only after Iran receives war compensation. Over the weekend, Iran continued attacks on targets in the Gulf region, including strikes on Kuwait’s oil headquarters.

Markets: Brent jumps to $109; S&P 500 rose 3.4% last week

The market’s price action shows a split logic. On the one hand, Brent crude rose to $109.77 per barrel on Monday, up about 50% since the war began on Feb. 28; U.S. West Texas Intermediate (WTI) crude surged 66%, to $111.2. On the other hand, the S&P 500 jumped 3.4% last week, posting its best single-week performance since last November, suggesting some investors have started “buying the dip” and are betting on a diplomatic breakthrough.

Rob Subbaraman, head of global macro research at Nomura Securities, noted: “The market is tight—there’s less and less time, and there are only two outcomes: a ceasefire or escalation.” He said Trump’s tone still shows the White House’s urgency to end the war, but investors are still actively hedging against escalation risk.

Stagnation-inflation risk: even if talks succeed, the impact is hard to reverse

Analysts warn that even if the diplomatic effort succeeds, the impact will be difficult to fade quickly.

The Strait of Hormuz’s current traffic level is still about 95% lower than before the war, and OPEC+ decided on Sunday to increase production by 206k barrels per day—barely enough to make up the shortfall. Subbaraman said the war “has gone on long enough to cause a serious inflation shock globally,” and if it escalates further, the inflation shock could evolve into contracting demand and full-blown stagnation inflation (stagflation).

Mohit Mirpuri, portfolio manager of an equity fund at SGMC Capital, added: “Even if the Strait of Hormuz reopens, the damage to confidence and supply chains has already been done—things won’t simply return to normal. The market will remain highly sensitive to headline news, and as the narrative shifts, there will be sharp two-way volatility.”

Government bond yields quietly rise—an underestimated inflation risk

The fixed-income market is quietly repricing inflation expectations. On Monday, the yield on the 10-year U.S. Treasury note rose to 4.362%, up about 40 basis points from 3.962% before the war, nearing the highest level since mid-2025, and expectations for the Fed to cut rates this year have narrowed sharply.

Mirpuri believes the trend in Treasury yields is the most underestimated risk in the market: “If geopolitical shocks translate into persistent inflation expectations, yields could rise further; at a time when the market is already very fragile, further tightening of financial conditions could follow.”

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