'He doesn't have the switch': Wall Street doesn't expect Trump to save stocks from war in Iran

Several Wall Street strategists have warned investors not to bet on U.S. President Donald Trump bailing out the U.S. stock market, which has been hurt by war with Iran. Unlike trade wars, in which Trump can easily backpedal, current events in the Middle East are much less under his control, experts say.

- "The classic phrase about war applies here: once it starts, it takes on an inertia of its own," Bloomberg quoted Bob Elliott, chief investment officer of New York-based Unlimited, as saying. He said it is now far from as easy to influence and react to "market pain" as it was in the case of duties, where Trump until recently had complete control of the political course.

- Unlike the situation with duties in April 2025, the current negative reaction of Wall Street to the war in Iran has not yet caused serious concern in Washington, according to BCA Research geopolitics strategist Matt Gertken. The expert is confident that to put real pressure on the Trump administration would require the threat of a "market-induced recession" or a 10-15% drop in U.S. stock indices.

- Since the Iran crisis began, the benchmark S&P 500 index of U.S. stocks has lost 0.9%, while the Nasdaq Composite has lost 0.7%. "The fall has to get much deeper before it really becomes a problem for him [Trump]," HB Wealth Management investment strategist Gina Martin Adams agrees with her BCA Research colleague.

- Lori Calvasina of RBC Capital Markets urged clients to be cautious of historical precedents showing that buying stocks after downturns caused by geopolitical events tends to pay off. She cautioned that stock market recovery data does not always reflect the risks associated with widespread wars.

- Keith Buchanan of Globalt Investments compared the Iranian crisis to the conflict between Russia and Ukraine, which in 2022 caused energy prices to spike, fueled inflation and crashed the stock market. "The current situation is deeper and more protracted than other" crises, and this time Trump doesn't have "access to a switch," the expert added.

Trump has repeatedly made it clear that he considers the stock market a barometer of the success of his economic policy. Investors have become accustomed to hoping that the U.S. president will promptly correct the course if there is a threat of a major drawdown in U.S. stocks. This algorithm of actions became known first as Trump Put (by analogy with a put option - a stock exchange instrument to protect against a market decline), and then under the joking term TACO (Trump Always Chickens Out).

This article was AI-translated and verified by a human editor