From certainty to ambiguity: How market analysts interpret Trump's statement

One of the most important factors that will determine market's trajectory in the weeks ahead, according to analysts, remains crude oil prices.

US President Donald Trump's statements on Thursday morning (India time) unsettled global markets that were pricing in an early end to the ongoing conflict in West Asia. Global markets, they feel, are now likely to face renewed volatility.

 

“Markets were beginning to price in more certainty; but this speech reintroduces more ambiguity. What they’ve heard now is far less definitive, and that uncertainty is likely to drive volatility across asset classes. A shorter and contained conflict is what was being priced in,” said Nigel Green, chief executive officer (CEO) of deVere Group, a global consulting firm that has $14 billion assets under management (AUM).

 

 

Most Asian markets traded weak following Trump's statements with declines up to 3 per cent. Back home, the Nifty 50 slipped over 2 per cent to hit an intraday low of 22,182.55 levels. The Sensex, too, lost over 2 per cent to hit an intraday low of 71,545.81 levels on Thursday. 

 

On the other hand, crude oil prices surged over $4 a barrel (bbl) on Thursday after Trump's address. Brent crude futures rose $4.88, or 4.8 per cent, to $106.04/bbl. US West Texas Intermediate crude futures were up $4.17, or 4.2 per cent, to $104.29 /bbl.

 

While talks with Iran were underway, Trump warned that the US would step up strikes if no agreement is reached, hinting that critical infrastructure, including electric power facilities, could be targeted more aggressively.

 

One of the most important factors that will determine market's trajectory in the weeks ahead, according to Green, remains crude oil prices.

 

“There’s still no confirmation of how or when this war will end, and that changes how markets will price risk. The oil market is highly sensitive to this. If traders believe supply risks remain, the geopolitical risk premium will return quickly. This has direct implications for inflation expectations and broader market sentiment,” Green said. 

 

Those at Elara Capital, too, believe that the markets will remain uncertainty on how the developments in West Asia will shape up over the next two - three weeks with crude oil prices likely to mostly remain firm.

 

“The focus of US has moved away from regime change and opening of Strait of Hormuz. So far, Iran doesn't seem to be buckling under US' pressure, but the degree of freedom is reducing, suggesting limited ability to continue longer. We see a finality to war soon. Heightened Volatility is likely to persist in the short –term,” said Garima Kapoor, deputy head of research and economist at Elara Capital.

 

Key levels to watch

 

In this backdrop, analysts expect the Indian markets to remain volatile amid bouts of recovery, which could be met with selling. 

 

“Indian markets have been underperforming emerging market peers - falling more than EMs on a bad news and rising less in case of a positive development, suggests Nandish Shah, deputy vice-president at HDFC Securities. 

 

“For the Nifty, 21,300 to 21,700 is a support zone. It will take a lot of bad news for the index to break below this. If it does, 20,000 to 20,200 could be a reality,” he cautions. 

 

Impact on crude oil

 

For now, analysts at Rabobank International  have stuck to their geopolitical 'base-case scenario' of the war being over in two - three weeks on largely US terms, then a slow return to normal for oil markets. They, however, expect full closure of the Strait of Hormuz to last until April-end. 

 

“We estimate that Brent will average $107/bbl in the second quarter of calendar year 2026 (Q2CY26), $96/bbl in Q3, and $90/bbl in Q4. We have raised our 2027 estimates up to $93/bbl on average for the year before moderating to $71.50/bbl in 2028,” wrote Joe DeLaura and Florence Schmit of Rabobank International in a recent note.