Trump Holds Off on Iran Strike as Iran Submits New Ceasefire Plan...Markets Relieved (Comprehensive)

Trump: "At the Request of Middle Eastern Leaders"
Iran: "U.S. to Allow Oil Exports During Negotiations"
Concerns Over Renewed Full-Scale War Ease... Interest Rates and Oil Prices Stabilize

Reuters Yonhap News

U.S. President Donald Trump has announced that he is holding off on attacking Iran. Last week, no concrete solutions emerged from the summit with China, fueling concerns over potential military conflict. However, contrary to expectations, Iran has proposed a new ceasefire plan, prompting the U.S. to review it, and the situation has shifted back into a phase of negotiations. Interest rates and oil prices, which had surged on fears of renewed conflict, have also begun to stabilize.

Trump: "Iran Military Strike on Hold...Positive Progress"

The Associated Press Yonhap News

On May 18 (local time), President Donald Trump attended an event at the White House focused on lowering drug prices, where he stated, "Leaders of Middle Eastern allied nations have asked whether we could postpone the attack for just two or three days, as they believe a deal with Iran is imminent."

This statement elaborates on what President Trump posted on his social media platform, Truth Social, where he said, "I have instructed the entire U.S. military not to carry out tomorrow's planned attack on Iran," explaining that he had received requests from Sheikh Tamim bin Hamad Al Thani, Emir of Qatar, Mohammed bin Salman, Crown Prince of Saudi Arabia, and Mohammed bin Zayed Al Nahyan, President of the United Arab Emirates (UAE), to hold off on the planned military strike against Iran.

However, President Trump noted that Iran's response has not yet been confirmed and remained cautious about the possibility of a ceasefire agreement. He said, "This is very positive progress, but we will have to see what the actual outcome will be. In the past, there were times I thought we were very close to an agreement, but ultimately it did not happen." He added, "This time, the situation is a bit different. We are already preparing to take very significant measures. It is not what I wanted, but I have no other choice because we cannot allow Iran to possess nuclear weapons." By saying this, he pressured Iran, stressing that a large-scale military attack could be launched if the negotiations break down.

Given that a full-scale war with Iran ahead of the midterm elections would inflict significant political damage, some analysts suggest that President Trump is placing greater emphasis on a diplomatic solution. The New York Times (NYT) analyzed, "President Trump's approval ratings are wavering as an unpopular war and economic concerns overlap," adding, "The Republican Party now faces political burdens ahead of the midterm elections." According to a public opinion poll released jointly by NYT and Siena College on the same day, President Trump's job approval rating stood at 37%, marking the lowest figure since the start of his second administration.

Iran: "New Ceasefire Proposal Delivered to U.S. ... U.S. to Allow Crude Oil Exports"

AP Yonhap News

Iran, which had previously taken a negative stance toward negotiations with the U.S., announced that it has delivered a new ceasefire proposal to the United States. Iran's Tasnim News Agency, citing a government source, reported, "A new ceasefire proposal consisting of 14 clauses was conveyed to the U.S. through Pakistan," and added, "The new proposal includes guarantees to end the war, U.S. confidence-building measures, reopening of the Strait of Hormuz, and the lifting of the U.S. maritime blockade."

The outlet emphasized, "The U.S. side has agreed to suspend sanctions on Iranian crude oil exports during the negotiation period." However, the U.S. government has not yet issued an official statement on this matter. CNBC reported, "The White House did not respond to requests for comment regarding Tasnim News Agency's report on the suspension of Iranian oil export sanctions during the negotiations."

Some observers have raised the possibility that China and Russia may intervene in future ceasefire talks with Iran, ahead of a summit between Chinese President Xi Jinping and Russian President Vladimir Putin scheduled for May 20. According to Russia's TASS news agency, Kremlin foreign policy adviser Yuri Ushakov stated at a press conference, "The two leaders are expected to adopt a joint declaration at their summit on May 20, proclaiming a multipolar world order and the establishment of a new type of international relations." China's state-run People's Daily also emphasized, "China and Russia firmly uphold an international system with the United Nations (UN) at its core and adhere to the spirit and principles of the UN Charter."

Interest Rates and Oil Prices Calm Down...Concerns Over Full-Scale Conflict Ease

Reuters Yonhap News

As the Iran conflict returns to a phase of ceasefire negotiations, the market has adopted a more relaxed mood. International oil prices and bond yields, which had soared on concerns about a full-scale war, have started to settle down.

According to Investing.com, as of 8 p.m. Eastern time on May 18, Brent crude oil futures for July, the global benchmark, were trading at $109.11 per barrel, down 0.19% from the previous day. Brent crude, which had surged to $112 per barrel the day before, saw its upward momentum ease as tensions over the Iran conflict subsided. At the same time, West Texas Intermediate (WTI) crude oil futures for July were also trading down by about 1.7%, at $102.66 per barrel.

Bond yields also eased somewhat. The yield on the U.S. 10-year Treasury note stood at 4.597%. During intraday trading the previous day, as war fears peaked, the yield soared to as high as 4.635%, marking a one-year high. The yield on the U.S. 30-year Treasury note was 5.131%. In the bond market, yields and prices move inversely, meaning the strong sell-off in bonds drove prices lower.

Whether this stabilization will continue remains uncertain. Persistent high inflation is intensifying upward pressure on interest rates. According to the U.S. Department of Labor, the Consumer Price Index (CPI) for April rose 3.8% year-on-year and increased 0.6% from the previous month. This is attributed to gasoline prices rising by 5.4% in just one month. Other wholesale price indices showed annualized increases of up to 6%, the highest since 2022.

Jack McIntyre, portfolio manager at U.S. asset management firm Brandywine Global Investment, said, "Interest rates will continue to rise until something breaks," adding, "What is interesting is that Iran is aware of this." He continued, "At this point, the stock market has begun to pay attention to the bond market, and as the yield on the 10-year note approaches 5%, the pressure will intensify."

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