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President Trump has posted a new announcement on Truth Social, the social media platform. He wrote:
“A big day for World Peace! Iran wants it to happen, they’ve had enough! Likewise, so has everyone else! The United States of America will be helping with the traffic buildup in the Strait of Hormuz. There will be lots of positive action! Big money will be made. Iran can start the reconstruction process. We’ll be loading up with supplies of all kinds, and just “hangin’ around” in order to make sure that everything goes well. I feel confident that it will. Just like we are experiencing in the U.S., this could be the Golden Age of the Middle East!!! President DONALD J. TRUMP”
How Will Trump’s Statement Affect the Stock Market?
This latest post has the potential to affect the stock market. That’s because Trump’s message suggesting a “Golden Age of the Middle East” and U.S. support for reconstruction and security around the Strait of Hormuz could boost risk appetite and cyclical stocks, lifting the Industrial Select Sector SPDR Fund as investors price in higher global trade and infrastructure demand. Expectations of increased logistics, construction and capital spending would be viewed as a tailwind for industrial earnings and order backlogs.
The Energy Select Sector SPDR Fund could react positively because reduced geopolitical risk in a key oil transit chokepoint eases supply disruption fears, potentially stabilizing prices and supporting integrated oil and oil-service names. At the same time, talk of “big money” from reconstruction implies sizeable energy investment demand, benefiting exploration, production and midstream firms tied to Middle East flows.
The iShares U.S. Aerospace & Defense ETF might gain on the prospect of prolonged U.S. presence “hangin’ around” to secure Hormuz, implying sustained demand for defense systems, maintenance and related services. However, if investors interpret Trump’s emphasis on peace as a path to lower defense budgets over time, any rally in defense names could be tempered by expectations of slower long‑run spending growth.
Here are some of the stocks that might be affected:
Industrial Select Sector SPDR Fund ((XLI)),
Energy Select Sector SPDR Fund ((XLE)),
iShares U.S. Aerospace & Defense ETF ((ITA)).