The big stock market correction that Trump can’t talk his way out of is official

Throughout his presidency, Donald Trump has kidnapped and extradited the leader of Venezuela, threatened to annex Greenland, mused about ousting the chair of the Federal Reserve, and waged economic war on his closest allies, all while (more or less) keeping the stock market from tipping into bearish territory.

The Iran war increasingly looks like the one instance where physical reality has outrun his ability to control the narrative.

The Nasdaq 100 has now fallen over 10% from its peak, technically entering correction territory. The S&P 500 has been at a loss for five weeks, on pace for its longest streak of weekly losses since 2022. Brent crude, the global barometer of oil futures, has shot back up to near $111 a barrel, while West Texas Intermediate (WTI) crude, futures of oil based in Texas, is flirting with $97, threatening to tease $100. 

On Thursday, Trump extended his deadline for striking Iran’s energy infrastructure by 10 days, his second extension since issuing the original threat last Saturday. “Talks are ongoing,” he posted on Truth Social after the market closed, potentially hoping to stop the bleeding after the stock market slipped over fears of a ground confrontation in Iran imminently. 

So far, the two sides haven’t come to the table much, with Iranian officials publicly rejecting the ambitious-15-point ceasefire proposal delivered by the U.S. through intermediaries in Pakistan and countered with five unrealistic demands of their own, including sovereignty over the Strait of Hormuz.

The post isn’t having the “truth social effect” on oil prices that Trump was hoping for, energy trader John Arnold posted on X. Traders are getting exhausted from the noise and have no sense of whether to trust that anything of what Trump says is true. It seems like the White House agrees, and on Friday, it launched (while poking fun of “launches” as a word used by outlets to describe the war) the official White House app, so folks can get news from Trump directly.

Meanwhile, senior White House aides told MS NOW that Trump has grown “a little bored” with the conflict—not regretful, they said, just ready to move on. A second official said the president has started shifting his focus toward the economy, domestic policy, and the midterm elections. The administration’s public communications have tracked accordingly: official White House social media accounts have promoted the war effort with memes pulled from Iron Man, Top Gun, and SpongeBob SquarePants, and have taken to posting cryptic, eerie posts and videos over the last day or so to promote some unknown project. 

Unlike the other conflicts, it takes both parties to back out of this war, and Iran—with its supreme leader assassinated, military infrastructure decimated, and proxies scared—has a desire to draw out the economic damage. 

Until Thursday, markets have remained surprisingly resilient, keeping oil prices low throughout all the volatility. ECB President Christine Lagarde warned Friday that markets are “overly optimistic” about the conflict’s fallout, calling it a shock “probably beyond what we can imagine at the moment.” She pointed to second-order supply chain effects—like helium shortages disrupting semiconductor production—that investors haven’t begun to price in. “Most people are actually talking about years,” she said.

Not everyone shares that same sentiment. Nordic American Tankers CEO Herbjørn Hansson told CNBC he expects the Strait of Hormuz to reopen within weeks, not months. “The ships that are trapped or in the Arabian Gulf will be out within a fairly short period of time,” Hansson said. “That is my judgment based upon my experience of the past in similar situations.”

Torten Slok, Apollo’s chief economist, also wrote on Friday that markets are “overreacting” to a period of short term volatility for the sake of longer term stability in oil markets and the supply chain. “The bottom line is that the Iran shock is not big enough to offset the strong tailwinds to the US economy from AI spending, the industrial renaissance and the One Big Beautiful Bill,” Slok wrote. 

But even as Hansson was making that case, Iran turned back two Chinese-owned container ships from the strait on Friday—-vessels belonging to state-owned Cosco Shipping that made complete 180s. China has largely been spared from Iran’s blockade, which Tehran said before was focused only on countries it views as aligned with the US and Israel. The fact that Beijing’s ships are now getting turned away suggests the situation at the strait is becoming less predictable, not more.

This story was originally featured on Fortune.com