Original Title: "How to Deal with Trump? Accept This 'Understanding King Trading Manual'"
Original Author: Zhao Ying, Wall Street Insights
Every conflict involving Trump follows the same script.
According to Xinhua News Agency, on the 9th local time, Trump spoke about the conflict with Iran in Miami: he believes the conflict will "soon" end, but "will not" end this week. This statement sounds ambiguous, but if you have been tracking his approach to geopolitical conflicts, you would recognize this as a familiar signal—negotiation conditions are quietly taking shape.
This is precisely the seventh step described by The Kobeissi Letter—conditional de-escalation signals emerge. After the market has begun to seriously price in "prolonged conflict," conditional cooling language appears—not retreating, but testing whether the opponent and the market can bear the next phase of escalation.
The independent macro market research newsletter The Kobeissi Letter systematically reviewed every geopolitical and trade conflict involving Trump since his inauguration on January 1, 2025, in a report dated March 3. This includes the tariff war, the arrest of Venezuela's Maduro, negotiations over Greenland, and now the conflict with Iran; the negotiation logic Trump follows in managing these conflicts is highly consistent.
This study organizes Trump's conflict management path into a complete 10-step "conflict script": from verbal pressure and posturing, to a preference for making key moves on Friday nights, then to the spread of risk premiums across stocks, bonds, and commodities, finishing with a "deal" that triggers sharp market repricing. In the next 2 to 4 weeks, the organization outlines three scenarios, with the most likely outcome still being an agreement—but before that, the market may have to experience another round of pain.
Steps One to Three: From Verbal Pressure to "Friday Night Strikes"
Trump's conflicts often do not start with the first missile or the first tariff, but with linguistic pressure to "make the other side negotiate."
The Kobeissi Letter defines the starting point of Trump's conflict model as verbal pressure. Taking the conflict with Iran as an example, the first strike on Iran's nuclear facilities occurred on February 28, but two months earlier, Trump had repeatedly posted on Truth Social that "a large fleet is heading towards Iran," and continued to urge Iran to "reach an agreement."
The organization points out that this pattern was similarly evident in the Venezuela and EU tariff situations: More than a month before taking action against Venezuela, Trump announced the closure of its airspace; prior to imposing tariffs on the EU, he continuously threatened Denmark and claimed "it's time" to acquire Greenland.
The second step involves strategic posturing and displays of strength, including military deployments and visible preparation actions such as public coordination with allies, aiming to enhance credibility without triggering a full-scale conflict. The organization cites Trump's meeting with Intel CEO Lip-Bu Tan in August 2025 as an example—prior to which, Trump publicly demanded his "immediate resignation," and then both sides reached a 10% government stake agreement that recorded over 80% book profit in less than two months.
The third step is the iconic "Friday night strike." The Kobeissi Letter notes that Trump's major actions are highly concentrated on Friday nights to Saturday mornings, including: June 21 joint U.S.-Israel airstrikes on Iranian nuclear facilities, September 1 strikes on Caribbean drug ships, October 10 100% tariff threats against China, November 29 closing Venezuelan airspace, December 25 military action in Nigeria, and February 28 airstrikes on Iran.
Why does he always strike on Friday nights? The report argues that if major news breaks during trading hours, liquidity disappears instantly, algorithmic trading amplifies volatility, and panic sentiment reinforces itself within the trading day. Announcing on Friday night provides investors, institutions, and governments the entire weekend to digest the information.
More importantly, Trump is highly sensitive to sharp market fluctuations—he needs a time window to observe market reactions and leave room for possible negotiations. Following this script, after striking on Friday night, Trump often begins to hint at the possibility of a "deal" before the futures opening on the same week's date. In this instance with Iran, that signal did not come.
Steps Four to Six: How the Market is "Educated"
After the third step, the study categorizes the typical market responses into three layers:
Step Four: A shock occurs, but the market initially bets on "negotiations happening soon." The report describes a common path: a sharp fluctuation in the Sunday night trading session (Eastern Time 18:00), but by the time the cash market opens on Monday, some trends will be "reversed," as investors assume Trump loves to make deals and that conflicts will not last long. The study uses the March 2 trends as an example: WTI crude oil temporarily shed about 70% of its gains, and the S&P 500 even turned negative, but then these trends were reversed, with oil prices hitting new highs and the stock market reaching new lows.
Step Five: Trump counters the market's optimism with language suggesting "the conflict can last a long time." When investors try to buy the dip, the market often faces a counter-attack. On March 2, Trump publicly stated "the war can go on forever," and the U.S. possesses "unlimited mid-to-high-end weapons." The Kobeissi Letter believes this type of "forever" language is more negotiation jargon, showcasing a bearable upper limit but not an intention to engage in prolonged conflict.
Step Six: The market begins to formally price in "longer-lasting conflict." As of the writing of this report on March 3, Brent crude prices exceeded $85 per barrel for the first time in nearly two years; the Dow Jones Industrial Average fell over 1100 points in a single day; the stock market dropped to a new low for the week, with defensive capital outflows accelerating. This stage marks a structural shift in market psychology—"the first dip was bought because investors expected an agreement was coming; the second dip was bought as investors believed the escalation was temporary; the third dip marks the moment when positions began to shift structurally."
Steps Seven to Eight: De-escalation Signals and Market Feedback Loop
Step Seven sees the emergence of conditional de-escalation signals, corresponding to Trump's most recent statements on the 9th. The Kobeissi Letter emphasizes that the time window between Steps Six and Seven is "highly uncertain"—during the tariff war in early 2025, this transition took months, ultimately catalyzed by a rapid surge in U.S. Treasury yields before tariffs were "paused" on April 9.
The organization points out that, historically, the catalysts triggering Trump to back down are either the targeted party actively seeking to "reach an agreement," or a structural break in the market. In the context of Iran, this catalyst could be the collapse of the Iranian government or some event that has structural implications for the U.S. and global economy.
Step Eight involves the feedback loop between the market and politics. Financial markets have become part of the negotiating environment, as oil prices, stock markets, and inflation expectations reciprocally influence political narratives.
Trump's three policy priorities are: being the "peace president," controlling inflation, and lowering U.S. gasoline prices. From this, it follows that prolonged high oil prices will directly conflict with his goals, especially in a critical mid-term election year.
According to estimates from JPMorgan, a blockade of the Strait of Hormuz could push oil prices to $120 to $130 per barrel, causing the U.S. CPI inflation rate to soar to about 5%. The institution has set three key monitoring thresholds based on this: Brent crude consistently above $90 per barrel, stock market declines of 5% or more, and gasoline prices rising over 10%. "When these thresholds are reached, the likelihood of negotiation-related headlines appearing will increase significantly."
Steps Nine to Ten: Reaching an Agreement and Violent Repricing
Step Nine involves reaching an agreement and constructing narrative frameworks. The Kobeissi Letter points out that each significant confrontation within Trump's framework ultimately concludes with a narrative of "extreme pressure yielding concessions," regardless of trade agreements with China, the EU, India, or corporate negotiations in the semiconductor and rare earth sectors, or the multiple conflicts Trump facilitated the resolution of in 2025.
In the matter of Iran, the organization believes that if the Iranian government does not collapse, the final agreement may involve a ceasefire linked to nuclear issues, regional security arrangements with execution mechanisms, or sanction adjustments based on compliance benchmarks. "The importance of the specific structure far exceeds that of timing and narrative frameworks."
Step Ten is characterized by violent market repricing and political victory declarations. The Kobeissi Letter emphasizes that market repricing after an agreement announcement is often sudden rather than gradual, as investors are generally in defensive positions at that time—energy exposure is high, stock risks have been compressed, and volatility remains elevated due to latent uncertainties.
Once uncertainty dissipates suddenly, these positions will quickly unwind. The organization cites historical cases from April, August, and October 2025, and January 2026, indicating that after every tariff pause or framework agreement announcement, the stock market experienced a significant surge, and oil prices rapidly fell as shipping pathway expectations solidified.
The Next 2-4 Weeks: Three Paths—"The Deal will Return to the Table"
The Kobeissi Letter outlines three scenarios for the next two to four weeks.
Scenario One: Escalation briefly intensifies, oil prices rise and the stock market falls, then negotiation language suddenly emerges, and the market rapidly reverses due to overly defensive positions.
Scenario Two: The conflict continues in a controllable yet sustained manner, oil prices stay elevated but do not spike sharply, the stock market waits for clarity amid high volatility, and an agreement is reached later this month under continued pressure.
Scenario Three: Regional escalation significantly broadens, including substantial interference with shipping channels or direct intervention from more national actors, pushing oil prices towards triple digits, with global risk assets facing deeper repricing. Given historical precedents and the fact that it is a critical mid-term election year, the probability of the third scenario is lower but not impossible.
Whichever path is taken, the common point that this manual bets on is clear: Trump does not like "forever wars," and is better at pushing escalations to leverage points, then writing the conclusion as a "deal." The Kobeissi Letter ultimately concludes: "Do not forget, since Trump took office nearly 13 months ago, every conflict he has been involved in has ended with an agreement. Trump is a deal maker, and by following the rules, you will be rewarded."
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