President Donald Trump has consistently attempted to manage financial market perceptions during the ongoing conflict with Iran. However, his established methods for calming investor fears are increasingly showing diminishing returns.

Struggles to Control Economic Narrative

When markets show signs of instability, President Trump has frequently relied on social media posts or public remarks suggesting the conflict he initiated last month would conclude swiftly. He has publicly claimed that markets are performing better than anticipated, despite recent trends.

The S&P 500 stock index has declined over the last five weeks, and the global benchmark for oil has risen approximately 60%. Despite this, Trump stated at a Friday investor summit, “I thought oil prices were going to go up higher than they are now,” and expected a larger stock market drop.

White House Strategy Under Scrutiny

The administration has largely avoided aggressive public messaging about the economic fallout from the Iran war, focusing instead on mitigating damage within the financial sector. The White House views the performance of the stock, energy, and bond markets as an indirect gauge of voter sentiment.

Trump's economic platform relies heavily on low gas prices, strong 401(k) performance, and affordable mortgage rates. This messaging is reportedly losing traction as the conflict continues to disrupt a significant portion of the world's energy supply.

A March survey by The Associated Press-NORC Center for Public Affairs Research revealed low approval for Trump's handling of the economy (38%) and the Iran situation (35%).

Expert Analysis on Diminishing Returns

Jeffrey Sonnenfeld, a Yale University School of Management professor and co-author of a book on Trump’s leadership, noted that the strategy is backfiring. He stated, “The uncertainty is now soaring,” and that the credibility of reassurances aimed at calming markets has eroded.

Gene Sperling, a former top economic adviser for Democratic administrations, argued that voters directly link rising gas prices to Trump’s decision to engage militarily with Iran. Sperling criticized the administration’s approach, saying “simplistic jawboning” is inadequate for the public facing higher costs.

Sperling suggested the President should directly address the economic pain caused by his policy and justify the national security rationale, rather than dismissing public concerns.

Market Reactions and Official Statements

On Monday, Trump posted on social media claiming significant progress in peace talks with Iran, while simultaneously suggesting further military action was possible. During a Thursday Cabinet meeting, he claimed Iran was “begging” for a deal.

Treasury Secretary Scott Bessent told Fox News Channel’s “Fox & Friends” that Iran is allowing some tankers through the Strait of Hormuz. He attributed stable supply to countries releasing strategic petroleum reserves and sanctions relief for Russian and Iranian oil already in transit.

Bessent added that the U.S. intends to regain control over the straits over time, ensuring freedom of navigation through potential U.S. or multinational escorts.

Graham Steele, a former Biden-era Treasury official, observed that Trump’s messaging techniques offer only temporary relief. Steele noted that initial volatility has given way to a steady upward trend in prices, indicating markets are no longer reacting strongly to the pronouncements.

Consumer Confidence Reflects Economic Strain

The University of Michigan’s Index of Consumer Sentiment dropped to 53.3 in March, its lowest point since December. Joanne Hsu, director of the surveys of consumers, attributed this decline to financial market volatility following the Iran conflict, particularly impacting middle and higher-income households.

Hsu cautioned that confidence could further decrease if the conflict becomes protracted or if high energy costs translate into broader inflation.

Gus Faucher, Chief Economist at PNC Financial Services, stated that low consumer sentiment doesn't guarantee a recession. He concluded that substantive improvements, such as lower gas prices and a stable stock market—likely requiring a definitive conflict resolution—are necessary for the public to feel better about economic conditions.