The ongoing conflict between the US and Iran continues to weigh on market sentiment, with the S&P 500 falling for the fifth consecutive week, indicating that Trump's "verbal easing" is losing its effectiveness.

On Friday, Eastern Time, all three major U.S. stock indexes closed lower, with the Dow Jones Industrial Average falling into technical correction territory and the Nasdaq Composite Index extending its losses to more than 10%.The "spot shock" in the oil market is spreading from futures prices to physical supply, and market confidence in Trump's verbal statements continues to decline.

Brent crude oil settled at $112.57 a barrel on Friday, its highest closing price since July 2022. In 12 of the past 13 trading days, Brent crude has moved inversely to the S&P 500. The blockade of the Strait of Hormuz continues, with analysts estimating that approximately 10 million barrels or more of oil transiting the strait daily has effectively ceased.

Trump posted on social media on Thursday that Iran had allowed some commercial vessels to transit the Strait of Hormuz, but this statement failed to stop oil prices from continuing to climb on Friday. Iranian media reported that import and export vessels from countries that support the United States and Israel are prohibited from passing through their ports.

Trump's verbal attempts to appease Trump have failed.

In the past few weeks of trading,The expectation that "Trump could apply the brakes at any time" has been a key support preventing further market declines. However, as the conflict drags on, this support is beginning to crack.

Barclays analysts wrote in a research note on Friday, "The ongoing shifts in stance and headline fatigue are severely undermining the effectiveness of the 'Trump put option,' and the situation remains fluid and quite chaotic." The so-called "Trump put option" refers to the market's reliance on Trump's ability to boost market confidence through policy statements.

StoneX market analyst Fawad Razaqzada stated bluntly in a report, "Trump's control over the market is declining, and investors seem less inclined to trust his statements, even starting to trade in the opposite direction—they are waiting for substantial evidence, not just words."

Dan Alamariu, chief geopolitical strategist at Alpine Macro, also pointed out that this crisis is fundamentally different from Trump's previous "threat-and-retreat" pattern: "This time, Iran has a veto, or at least a voting right, so you can't 'TACO' (referring to Trump's usual threat-and-retreat pattern) on this."

Despite Trump's three attempts to verbally intervene and lower oil prices(5-day extension, "ceasefire" proposal, and 10-day extensionWTI crude oil closed flat this week, with prices rising to levels seen before Trump's verbal intervention.

Strait blockade: Buffer stockpile depleted, physical shock looming.

The core fear in the market,The situation is evolving from "potential future oil shortages" to "current oil shortages are indeed present."

In the weeks preceding the initial outbreak of the US-Iran conflict, oil tankers from various countries had already loaded and departed from the Persian Gulf before the conflict escalated, providing a buffer to the market to some extent. According to Ole Hansen, head of commodities strategy at Saxo Bank:

Most of the oil tankers that departed from the Persian Gulf before the escalation of the conflict have completed their voyages and unloaded their cargo.With limited new supply, the buffer that initially curbed soaring oil prices is rapidly being exhausted."

It is worth noting that spot prices for Middle Eastern oil are now significantly higher than financial benchmarks such as Brent or WTI. This price difference is seen as a harbinger of physical supply shortages spreading to other parts of the world, putting investors on high .

According to Wall Street News

This means that the "slow-moving millstone" of oil prices is still turning. Macnamara stated, "As actual conditions gradually supersede the headline effect, oil prices are slowly but steadily climbing upwards."

Behind the five-day losing streak: panic has not yet peaked.

From a technical perspective, the situation for the three major indices is quite dire.

The S&P 500 fell for the fifth consecutive week, marking its longest losing streak since the Russia-Ukraine conflict began impacting global markets in 2022, with a cumulative decline of 7.4% in March. The Dow Jones Industrial Average plunged 1.7% on Friday, dropping 793 points and officially entering correction territory; the Nasdaq Composite fell 2.1% on Friday, having already confirmed its correction the previous day.

Sentiment indicators are also sounding alarms. The Cboe Volatility Index (VIX) rose above 31 on Friday, well above its long-term average of around 20. According to data from Citadel Securities, demand for put options against further declines in the S&P 500 has jumped sharply, and the "skew" indicator, which measures market skewness, has risen to its highest level in nearly five years.

"Psychologically, this war of attrition is exhausting, and the market is struggling to digest a crisis that was initially expected to end quickly," said Carol Schleif, chief market strategist at BMO Wealth Management.

Alamariu described the current market state more bluntly: "The peak of panic has not yet arrived. Panic, by definition, is irrational; the market doesn't know how to price things out."

Macroeconomic transmission: Inflation expectations rise, interest rate cut expectations recede.

The continued rise in energy prices is being transmitted to the macroeconomy through multiple channels.Wall Street has generally raised its inflation forecasts and reduced its bets on a Federal Reserve rate cut this year.

Nationwide's chief market strategist, Mark Hackett, stated that while the fundamentals of the U.S. economy remain robust, "a sustained market rally is unlikely unless the conflict is clearly resolved and the energy market stabilizes."

Barclays analysts also warned that "at the same time, the war continues, and the longer the oil price shock lasts, the more severe the stagflation shock will be." Currently, Iran shows no signs of compromising, Israel has intensified its airstrikes, and the United States is reportedly increasing its troop presence in the region.

BMO's Schleif summarized the market's demands: "The market wants to see a framework for stability in the Middle East and the reopening of the Strait of Hormuz to key tanker traffic. The market wants to move out of this predicament."