Stocks Recover Slightly as Trump Trades Threats With Iran’s Khamenei

Published: June 18, 2025 by Omor IE

Key Points

A Middle East ceasefire still seems far from being achieved, but there have been renewed hopes.
The market is not yet convinced that the U.S. will involve itself in Iran.
The likelihood of the U.S. joining Israel is hovering around 60% at the moment.
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The stock market has climbed slightly today, with the S&P 500 crossing 6,000 and holding above that zone so far. The positive action is mainly due to renewed hopes of de-escalation, as the U.S. has not yet involved itself in the conflict. Yesterday, the market priced in around a 60% chance of U.S. military action against Iran before July. This went up to nearly 70% on Polymarket before coming down to 61% today.

Reports say that President Donald Trump is “weighing his options” on whether or not to strike Iran. This comes after both have exchanged threats. Trump posted on Truth Social yesterday, saying that the U.S. knows where Iran’s “Supreme Leader” Khamenei is hiding. Trump called him “an easy target”. He also called for an unconditional surrender, and said the U.S. “may or may not” join Israel’s strikes.

In a televised speech, Khamenei said, “The Americans should know that any U.S. military intervention will undoubtedly be accompanied by irreparable damage”. “The U.S. entering in this matter [war] is 100% to its own detriment. The damage it will suffer will be far greater than any harm that Iran may encounter.”

Here’s a market update as of 12:00 PM (ET) today.

The S&P 500 is up 21.37 points, or 0.36%.
The Nasdaq Composite is up 97.28 points, or 0.49%.
The Dow Jones Industrial Average is up 155.12 points, or 0.37%.

Middle East Conflict Remains As-Is

There has yet to be a major escalation from either side. As such, many on Wall Street have started to believe that a ceasefire may take place after all. President Trump said that Iran has already reached out about the possibility of negotiations. Ostensibly, Iran may be running low on missiles, with retaliatory strikes on Israel only involving dozens of missiles, compared to hundreds earlier.

Iran has apparently conveyed a message to the Qataris and the Omanis, asking them to mediate a ceasefire. A prerequisite to that being demanded is that Israel has to “calm the situation.”

Others believe that Iran has reserved missiles along the Arabian/Persian Gulf in case of a U.S. attack on Iran’s nuclear facilities. There are also rumors that Iran has already prepared plans to mine the Strait of Hormuz. A fifth of all natural gas and oil goes through this area, so any blockade would be catastrophic for the global economy.

All things considered, the market is simply waiting to see how this conflict will pan out.