Trump says the war will end, but strategists warn that the risks are far from over

Investing.com - U.S. President Donald Trump claims the war with Iran is “basically” over, triggering a sharp market reaction. However, according to BCA Research, investors should remain cautious.

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The company’s chief geopolitical strategist, Matt Gertken, said: “Now President Trump seems to be declaring victory and proposing to resume negotiations. Iran is likely to strike back in a parting shot to demonstrate its strength both domestically and internationally.”

In the report, Gertken warned that “Iran intends to prolong negative economic and political impacts,” and added that the country is unlikely to accept a ceasefire before ensuring that the U.S. pays a higher price.

He wrote that for investors, the real safety signal is not Trump’s declaration of victory but Iran’s decision to stop attacking and rejoin negotiations.

BCA Research pointed out that the market panicked earlier this week, “realizing the danger of a long-term closure of the Strait of Hormuz.”

Although there are signs that Trump is seeking an exit, Gertken believes Iran may temporarily escalate the situation.

BCA Research estimates a 70% probability of continued oil supply disruptions, with only a 30% chance of a quick diplomatic resolution.

Even if negotiations resume soon, the firm warns that Iran “will be interested in continuing periodic harassment of the region before the U.S. midterm elections” to maintain leverage.

For investors, the key is to adopt a defensive stance. Gertken recommends reducing but not eliminating oil exposure and maintaining cash overweight until Iran, rather than Trump, signals a true ceasefire.

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