U.S. and Iran Shift to Diplomacy Over Conflict... Markets Cheer as Worst-Case Scenario Passes (Comprehensive)

"The Worst-Case Scenario Is Probably Over"
"U.S. War Powers Act 60-Day Deadline Approaches"

Reuters Yonhap News

U.S. President Donald Trump has reiterated that there will be no deadline for a ceasefire with Iran, while also hinting at the possibility of resuming talks. Although Iran expressed a negative stance toward the U.S. maritime blockade, it also stated its willingness to engage in dialogue. With both sides avoiding armed conflict and focusing on diplomacy, the markets reacted with relief. Some analysts believe President Trump will focus even more on diplomatic efforts to reach an agreement to end the war within the 60-day period—by May 1 local time—during which he can wage war without congressional approval.

Trump: "No Set Timeline... Good News May Come on the 24th"

AP Yonhap News

In an interview with Fox News on the 22nd (local time), President Trump said in relation to the Iran issue, "There is no set timeline, and there is no need to rush. Some people say I want to resolve this quickly because of the midterm elections, but that's not true. I want to achieve a good outcome for the people." He completely denied the previous day's Axios report, which had suggested Trump viewed the ceasefire deadline as 3 to 5 days.

Regarding Iran's seizure of ships in the Strait of Hormuz, President Trump stated, "Those ships were not American vessels," adding, "We will closely monitor the situation." According to the Associated Press, on this day, Iranian military forces fired on three ships in the Strait of Hormuz and seized two of them. Although this occurred after President Trump's extension of the ceasefire, he indicated that he would not be concerned by it. White House spokesperson Caroline Leavitt also said at a press briefing that "the ships in question are international vessels, not American or Israeli," and explained, "This does not constitute a violation of the ceasefire agreement."

President Trump hinted at the possibility that talks with Iran could resume as early as the 24th. In an interview with a New York Post reporter on the same day, he said that additional talks within 36 to 72 hours are "possible" and that "there could be good news as early as the 24th."

Following this news, all three major U.S. stock indexes rose simultaneously. The Dow Jones Industrial Average closed at 49,490.03, up 0.69% from the previous trading day, the S&P 500 Index rose 1.05% to finish at 7,137.90, and the Nasdaq jumped 1.64% to close at 24,657.57. Both the S&P 500 and Nasdaq set new all-time highs. Ray Farris, chief economist at Eastspring Investments, told CNBC, "The market seems to believe that the worst-case scenario in this war is probably over," adding, "Investors expect President Trump to find a way to extend the ceasefire."

Iran also indicated its willingness for dialogue. Iranian President Masoud Pezeshkian stated on the social media platform X that "The Islamic Republic of Iran has always welcomed dialogue and agreement, and will continue to do so," but added, "However, malicious distrust, blockades, and threats are the main obstacles preventing genuine negotiations."

The Iranian Ministry of Foreign Affairs also issued a statement that was less rigid than its previous stance of rejecting the U.S.'s unilateral ceasefire extension. Iranian Foreign Ministry spokesperson Esmail Baghaei said in a media briefing, "We appreciate Pakistan's efforts for ending the war and establishing peace," adding, "Iran is closely monitoring the current battlefield situation and political developments, and is taking all necessary steps to safeguard the nation's interests and security."

U.S. War Powers Act '60-Day Limit'... "Must End War Before May"

Shinhwa Yonhap News

Some observers analyze that President Trump is focusing all efforts on negotiations to avoid controversy over the War Powers Act, which limits the president's unilateral war authority to 60 days.

The New York Times (NYT) reported, "According to the U.S. War Powers Act enacted in 1973, the president can order military action for up to 60 days without congressional approval, but must immediately halt unauthorized military operations unless additional approval is granted after that period." The NYT added, "The 60-day deadline for the Iran war is until May 1, and even within the Republican Party, there are opinions that the war should end before then."

According to the NYT, Republican Senator John Curtis stated in an op-ed earlier this month, "I will not support military action that continues for more than 60 days without congressional approval." The NYT also reported that several other Republican lawmakers warned that if the Iran war continues into May, the president's approval ratings could fall significantly.

This content was produced with the assistance of AI translation services.