Original Article Title: President Trump's CONFLICT Playbook, An Investor's Step-by-Step Guide
Original Article Author: @KobeissiLetter
Translation: Peggy, BlockBeats

Editor's Note: Amid the escalating Iran situation and market turbulence, the easiest trap for investors is an emotional interpretation of the news itself. However, from a longer time perspective, around the repeated trade conflicts, geopolitical frictions, and policy games of the Trump administration, a certain similar path often emerges: first, establish pressure through public rhetoric and deterrence, then escalate actions gradually, and ultimately return to the negotiating table after accumulating enough risk and stakes.

This article attempts to start from this "conflict-escalation-pricing-negotiation" structure, sort out the decision-making pattern of the Trump administration over the past year, and break it down into an observable market rhythm. For the financial markets, the real key is not just the event itself, but how the market prices the worst-case scenario and how it quickly reverses when uncertainty fades.

Within this framework, oil price, stock market volatility, and the flow of safe-haven assets often not only reflect risk but also become part of the political game. Understanding this logic may help to see the market mechanism behind the news in a highly uncertain environment.

The following is the original article:

The Iran conflict is escalating. In the past 12 months, we have systematically analyzed all geopolitical conflicts involving President Trump. What happens next? The clear guide below will explain the possible future developments and what these changes mean for investors and the financial markets.

Before we begin, please bookmark this article—it will be a key reference for market trends in the next 2 to 4 weeks.

On January 17, 2026, we released the first "playbook," titled "Tariff Playbook." At that time, President Trump was steadily increasing tariff pressure on the European Union while pushing his strategic plans to acquire Greenland. In the end, this article almost accurately predicted the outcome of Trump's latest round of tariff wars. So how did we do it?

Since President Trump's inauguration on January 20, 2025, we have spent hundreds of hours systematically analyzing geopolitical and trade war news dynamics related to Trump. Through this research, we identified a very clear pattern: when Trump tries to achieve an economic or military goal, he often employs a similar negotiation and pressure approach when dealing with America's allies and adversaries.

Throughout 2025 and into early 2026, we have consistently used pattern recognition as a key part of our investment strategy. Today, we believe it is the right time to share this methodology with the X platform and a wider audience. We hope this can help everyone find a reference framework during market volatility.

Step One: The Starting Point of All Conflicts is Almost the Same

First, we need to review how the Iran War started.

This conflict did not truly begin with the first strike on Iran on February 28 — in fact, it had been brewing for two months prior.

In the weeks leading up to the outbreak of war, President Trump had tweeted multiple times stating, "A massive Armada is heading to Iran," and consistently urging Iran to "make a deal."

President Trump — Truth Social (January 28, 2026)

The Iran War was the largest-scale conflict President Trump engaged in during his second term. But if you look back at the situation in the past 6 to 8 weeks, you will find that the strategy Trump employed is almost identical in logic to his previous trade wars and even his approach when arresting Venezuelan President Maduro.

Why is this said?

Of course, in terms of specific actions by the US military, the two are not entirely the same. However, at the underlying level of negotiation and pressure, they follow the same historical patterns.

For example, look at the post from November 29, 2025: at that time, Trump announced the "complete closure of Venezuelan airspace and its surroundings." It is important to note that this statement was made over a month before the final capture of President Maduro. In other words, before actual action took place, Trump had already exerted strong pressure and deterrence through a series of public statements and military signals.

President Trump — Truth Social (November 29, 2025)

Next, let's take a look at the following post by President Trump on Truth Social. In fact, between January 1 and January 18, we saw multiple similar posts by Trump.

In these posts, Trump stated, "Now is the time to acquire Greenland (it is time)," and continuously pressured and threatened the Danish side. Just a few days later, President Trump implemented broad tariffs on the European Union.

President Trump—Truth Social (January 18, 2026)

Clearly, the first step of Trump's "War Playbook" is to exert strong verbal pressure on the target through public remarks to force the other party to "make a deal."

Step Two: Strategic Posture and Actual Deployment

The second step usually manifests as visible strategic preparations: before truly launching a full-scale operation, enhancing deterrence and credibility through military or policy actions.

In the case of Iran, this step includes: the redeployment of military forces; public coordination with allies; and the so-called "Armada" Trump dispatched to the Middle East.

A similar pattern emerged in the Venezuela incident. At that time, the U.S. first announced the closure of airspace and conducted regional military deployments, with actual actions against President Maduro occurring later.

In a trade war, this path is similarly clear: often starting with investigations, administrative reviews, and public notifications before implementing actual tariff measures.

For example, look at a news article from August 11, 2025. At that time, President Trump met with Intel CEO Lip-Bu Tan. Just a few days earlier, Trump posted on Truth Social stating that Tan "has a serious conflict of interest, must resign immediately, no other solution."

Several days later, the Trump administration announced that it had reached an "agreement" with Intel to acquire a 10% stake in the company. As shown below, this investment gained over 80% returns in less than two months.

It is worth emphasizing again that President Trump's goal has almost always been to achieve a "deal."

In some cases, the conflict is resolved in the second stage. After the initial threats and pressures set the stage, both parties reach an agreement through negotiation, leading to a resolution at this stage.

If no resolution is reached, it moves on to the third step.

Step Three: Friday Night "Strike"

When the initial pressure imposed by Trump fails to produce results, he often escalates further, turning to military force or economic warfare.

A very stable tactical feature in Trump's escalation pattern is timing. Many major announcements, key strikes, or sudden policy changes often happen on Friday evenings—after the U.S. stock market has closed and the liquidity in the futures market has not fully formed.

Why choose this timing? Because Trump is highly sensitive to the violent fluctuations of the financial markets.

Here are some significant actions that have taken place on Friday nights or Saturday mornings:

US-Israel joint airstrike on Iranian nuclear facilities—June 21

US military strike on a Caribbean drug ship—September 1

Threat to impose 100% tariffs on China—October 10

Closure of Venezuelan airspace—November 29

Nigerian military operation—December 25

US airstrike on Iran—February 28

In fact, since 2025, multiple geopolitical or policy actions have occurred after Friday's close, and this timing choice is seen as a deliberate strategy.

When major geopolitical events erupt during trading hours, the market's price discovery mechanism often quickly destabilizes: market liquidity immediately drops, quantitative trading algorithms amplify fluctuations, and intraday violent swings easily trigger panic-driven chain reactions.

In contrast, announcing actions on a Friday evening creates a buffer period.

Investors, institutions, and governments can take advantage of the entire weekend: digesting information, assessing risks, consulting advisors, and simulating various scenarios.

By the time the market reopened, all parties had a clearer assessment of the situation.

For the Iran situation, this crucial moment was February 28. Typically, on the Sunday of the same week (before futures trading), Trump would often signal a "potential deal" to temper market expectations.

However, this time it obviously didn't happen, and the situation moved to the fourth stage.

Stage Four: Risk Premium Disperses Across Asset Classes

Following the shock event of stage three, at 6 p.m. on Sunday night (EDT) when the futures market opened, asset prices across the board would usually experience significant fluctuations.

However, the market often still doubts whether the conflict will be prolonged.

The reason is simple: everyone knows that Trump ultimately tends to seek a deal. Therefore, the sharp initial fluctuations in the stock, commodity, and bond markets are often partially retraced before the Monday stock market opens.

For example, you can look at the market performance on March 2 (the day before we wrote this article): the price of oil and the S&P 500 index at that time reflected this typical market reaction pattern.

S&P 500 vs. WTI Crude Oil—March 2, 2026

The WTI crude oil price retraced about 70% of its gains, and the S&P 500 index even briefly turned positive yesterday. However, today, this trend has reversed again—oil prices hit new highs while the stock market hit fresh lows.

The reason for this change is that President Trump knows very well: the market also knows that he always likes to "make a deal." Therefore, although the market once bet that this conflict would end soon, the reality is often that the conflict continues to escalate.

Now, the situation has entered the fifth stage.

Stage Five: Trump Hints Conflict Could Be "Long-Lasting"

When investors expect Trump to "step back" and quickly buy the dip, the market is often caught off guard by sudden changes. As the news headlines continue to worsen, many people would think Trump will soon start easing the pressure on the target. However, the actual situation is often the opposite.

As stated on March 2nd, Trump now says, "The war can go on forever," and refers to the U.S. possessing "an unlimited amount of mid-to-high-end weaponry."

It is important to note that the word "forever" is in quotes. This is actually a tactical language: the message Trump is conveying is — he does not want the war to literally go on indefinitely, but if necessary, the U.S. is fully capable of doing so.

This is also a negotiating strategy.

President Trump - March 2 & March 3, 2026

Since the outbreak of conflict between the U.S. and Iran, even before the war truly began, our assessment has always been: President Trump would not benefit from a prolonged war. Even with recent references to a "forever war," we still hold this view.

Why? Because the Trump administration's top three policy goals currently include: becoming a "peace president"; keeping inflation low; and lowering U.S. gasoline prices to $2 per gallon.

Engaging in a long war with Iran would run counter to these core policy objectives. Especially in a critical midterm election year, a conflict that erupts and persists in the short term will significantly impact these agendas.

Step Six: The Market Begins to Price in Long-Term Conflict

As of March 3rd, it appears that the sixth step in our "action plan" is already unfolding.

Look at the market performance below:

Brent crude oil prices rising above $85 per barrel for the first time in nearly two years;

The previous gains in the U.S. stock market have all been erased, hitting new weekly lows;

Market risk aversion sentiment is rapidly increasing, with funds accelerating their exit from risk assets.

On that day, the Dow Jones Index had already fallen by about 1100 points.

U.S. Markets and Commodities - March 3, 2026

At this stage, the market is no longer assuming this is just a brief, symbolic military conflict.

The price of oil rising above $85 per barrel reflects not a weekend-like brief friction, but pricing in the supply chain risks, increased oil tanker insurance costs, and a potential partial closure of the Strait of Hormuz.

Simultaneously, the U.S. stock market has dropped to new intraweek lows, not merely in immediate reaction to a news headline, but a reassessment of the duration risk of the conflict.

This is precisely the psychological turning point that the Trump strategy is attempting to create.

During the first drop, investors often buy the dip as they believe a resolution will be quickly reached. In the second drop, investors continue to buy because they think the escalation is only temporary. It's only by the third drop that the market positioning starts to truly adjust.

The so-called 'Smart Money' often consistently identifies moments when market sentiment is overly skewed in one direction, especially as retail participation continues to rise.

In 2025, our investment strategy is heavily based on this: how to anticipate the market's next turn by recognizing Trump's historical patterns in economic conflicts.

As shown below, since 2020, our investment strategy returns have nearly quintupled the S&P 500 index. In 2025 alone, our trading strategy for the S&P 500 yielded a 21.8% return, significantly outperforming the index itself. This is because we can foresee key shifts in stock market sentiment and trends in advance.

Kobeissi Letter Performance (2020–2025)

This brings us to the seventh step.

Step Seven: Occurrence of 'Conditional Downgrade Signal'

Before explaining this step, it is important to note that there is significant uncertainty in the time span from step six to step seven. For example, during the early 2025 trade war, this stage lasted for several months, culminating in a tariff 'pause' on April 9. This turnaround was largely driven by the rapid surge in U.S. Treasury yields, as outlined below.

Usually, there is always some kind of catalyst that triggers Trump to back down or de-escalate. This catalyst could be:

The conflict target proactively proposing to "make a deal";

Or some significant change or pressure signal in the financial markets.

10-Year Treasury Yield - April 9 Tariff "Pause"

After risk premiums in stocks, commodities, and fixed income markets significantly expand, Trump often starts sending out some carefully crafted de-escalation signals. It is important to note that this kind of statement usually does not mean a real concession.

In the context of the Iran war, there could be two turning points: either a change in the Iranian government or some major event with structural implications for the U.S. and global economy.

At this stage, official statements will gradually shift towards a conditional resolution path. The statements begin to emphasize: if certain conditions are met, negotiations are possible; at the same time, expressions like "dialogue," "negotiation," or "framework agreement" will also gradually enter the narrative. The key purpose of this stage is to maintain strategic initiative without giving up while testing the opponent's and the financial markets' reactions.

Recent examples include:

October 2025, tariff agreement with China by Trump;

January 2026, Greenland-related agreement with the EU;

February 9, 2026, trade agreement with India.

Most of these agreements have followed a similar path: starting with a threat → then taking action → further escalation → and finally gradual de-escalation.

Step Eight: The Feedback Loop Between Markets and Politics

One often overlooked factor in this strategy is that the financial market itself gradually becomes part of the negotiation environment. Trump has shown multiple times that he closely watches stock market performance, energy prices, and inflation expectations, considering these factors as part of a broader political narrative.

If the conflict lasts too long and leads to a significant increase in oil prices, it will directly impact the three core policy goals he repeatedly emphasizes: shaping himself as a leader dedicated to peace; easing inflation pressure; and lowering gasoline prices.

The rise in energy costs will quickly transmit to consumer sentiment and inflation data, which will in turn have a significant impact on the political landscape during the midterm election cycle.

According to JPMorgan's estimate, if the Strait of Hormuz is closed, oil prices could rise to $120–$130 per barrel. This would mean that the U.S. CPI inflation rate could rise to around 5%.

The last time the U.S. saw 5% inflation was in March 2023, when the Federal Reserve was in a hawkish rate hike cycle.

In the current environment, there are several key indicators worth closely monitoring: Brent crude oil prices staying above $90 per barrel will significantly exacerbate market concerns about inflation; a stock market drop of 5% or more will visibly change investor sentiment; a gasoline price increase of over 10% will severely hit consumer confidence.

Once these thresholds are reached or approached, the probability of news about negotiations emerging in the market will increase significantly.

Important Note: This is precisely when the "smart money" starts positioning for buys—because this is often when retail sentiment has completely collapsed.

Step Nine: Agreement and Narrative Shaping

In the context of the Iran conflict, Step Nine is somewhat conditional.

If the Iranian government collapses, the U.S. and Israel are likely to declare the mission a success, with military objectives achieved. In this case, the "tariff playbook" strategy will end before Step Nine.

If the above scenario does not occur, then the next stage is entered: within this framework, almost all major confrontations ultimately conclude with a negotiated outcome and are shaped into a strategic victory. The specific agreement structure may vary depending on the situation, but the narrative logic often remains consistent: "maximum pressure" forces the other party to make concessions.

In past trade conflicts, agreements have often been described as proof of the economic benefits of the escalation strategy (e.g., trade agreements with China, the EU, India, Vietnam, Japan).

In corporate confrontations, the usual progression is through public pressure followed by equity investments or structural adjustments (e.g., Intel and rare earth-related agreements).

And in geopolitical conflicts, ceasefire agreements or framework arrangements are interpreted as: using a tough stance to compel the opponent to compromise (e.g., multiple conflicts ending in 2025 under Trump).

If the Iran conflict unfolds along familiar lines, a true resolution often only emerges after enough leverage and pressure have been demonstrated.

This resolution could involve: a ceasefire tied to concessions on the nuclear issue; a regional security arrangement with enforcement mechanisms; or sanctions adjustments predicated on compliance conditions.

The specific structure of the agreement is not paramount. What truly matters is the timing of reaching the agreement and the narrative that surrounds it.

Step Ten: Sharp Asset Repricing and Political 'Win' Narrative

In Trump's conflict playbook, the final stage is not upon the announcement of an agreement. The true endgame is the market's reaction to the agreement and the subsequent formation of a political narrative.

Historically, once a clear resolution framework emerges, financial markets tend not to adjust gradually but undergo a rapid and sharp repricing. This is primarily due to shifts in market positioning.

When negotiations truly become credible, investors typically hold highly defensive positions: energy asset allocations are markedly up, equity risk exposure is significantly reduced, and market volatility is elevated due to heightened uncertainty.

And when this uncertainty suddenly dissipates, these positions are quickly unwound, triggering a sharp price reversal.

A similar pattern has occurred multiple times in April 2025, August 2025, October 2025, and January 2026, as shown below.

In past trade wars, once tariff pauses were announced or some framework agreement reached, the stock market often swiftly rose, even if deeper structural issues were not truly resolved. Similarly, during periods of escalating geopolitical tensions, once the market confirmed the reopening of shipping lanes and that the conflict would not further escalate regionally, oil prices usually quickly dropped.

This repricing is often quite sharp because what's driving the market shift is not a sudden improvement in fundamentals but the rapid dissipation of risk premiums. The market's rise is not because everything suddenly becomes perfect but because the probability of the worst-case scenario occurring is drastically reduced.

It is worth reiterating that even briefly pricing the market for the 'worst-case scenario' is a crucial part of Trump's negotiation strategy.

We still hold one judgment: If in the coming days or weeks, US military action against Iran does not lead to the collapse of the Iranian government, then negotiations will still ultimately return to the table.

Trump does not want a "forever war," a situation that does not align with any of his economic goals.

What Might Happen in the Next 2–4 Weeks

As it stands now, the situation appears to be transitioning from escalated rhetoric to the peak and the beginning of releasing signals of conditional de-escalation. Compared to when the initial airstrikes took place, the market has now begun to price in a more protracted conflict.

Oil prices have surged, the brief stock market stability rebound has disappeared, and inflows into defensive assets are significantly accelerating.

From historical experience, this is usually a phase where pessimism begins to solidify widely in market positioning. However, at the same time, the probability of reaching a negotiated settlement quietly rises beneath the surface, and "smart money" often begins to look for trading opportunities at this stage.

This has already been reflected in the current price movements of silver and gold. Both metals have seen significant declines, with silver dropping by about 20% within 24 hours, even as the overall market continues to reprice risk premiums.

This clearly indicates that the market is witnessing widespread risk-off behavior, with holding cash increasingly seen as the most direct safe haven choice by more and more investors.

And the "smart money" is often the one observing these capital flows.

Gold and Silver—March 3, 2026

Final Note: Don't Forget the Real Goal

Over the next few weeks, there are roughly three main scenarios.

The first scenario is: a brief escalation of conflict that drives oil prices further up, stocks continuing to fall, followed by a sudden shift in rhetoric and the emergence of negotiations-related news. In this case, due to the market's overly defensive positioning beforehand, once negotiation signals emerge, asset prices may swiftly reverse.

The second scenario is: the conflict advances in a controlled but sustained manner. Oil prices remain at a high level but do not see a steep surge; the stock market operates in high volatility, awaiting further clarity on the situation. In this scenario, a resolution may have to wait until later this month, after sustained pressure.

The third scenario is: Regional conflict significantly escalates, such as substantial disruption to shipping lanes or more countries being directly involved in the conflict. In this case, oil prices could rise to a three-digit level, forcing a more profound repricing of global risk assets. Considering historical experience and the current critical midterm election year, we believe the probability of this outcome is relatively low, but not entirely impossible.

Ultimately, do not forget one fact: in the almost 13 months since Trump took office, nearly every major conflict involving him has ultimately ended in agreement.

Trump is fundamentally a dealmaker. If you can identify and follow this pattern, you often stand to benefit.

About Our Strategy

In the current tumultuous market environment, investors who can remain objective and strictly adhere to a systematic approach are experiencing one of the most attractive trading environments in recent years.

It is precisely this objective and systematic investment approach that has consistently outperformed the market benchmark in our strategy. As shown below, since 2020, the cumulative return of our investment strategy has nearly quintupled that of the S&P 500 Index.

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