Understanding Trump's "War Playbook": Ten Signals Investors Must Know

President Trump’s CONFLICT Playbook, An Investor’s Step-by-Step Guide

By @KobeissiLetter | Translated by Peggy, BlockBeats

Source: Rhythm BlockBeats

Repost: Mars Finance

Editor’s Note: Amid escalating tensions with Iran and market volatility, investors are most prone to emotional reactions to news itself. But over a longer time horizon, the pattern surrounding multiple trade conflicts, geopolitical frictions, and policy games under the Trump administration often follows a similar path: first, pressure is built through public statements and deterrence; then, actions are gradually escalated; finally, after sufficient risk and stakes are accumulated, negotiations resume.

This article attempts to analyze this “Conflict—Escalation—Pricing—Negotiation” structure, breaking down Trump’s decision-making patterns over the past year-plus into an observable market rhythm. For financial markets, the real key isn’t just the events themselves, but how markets price in the worst-case scenarios and how they quickly reverse when uncertainty diminishes.

Within this framework, oil prices, stock market swings, and safe-haven capital flows often reflect not only risk but also become part of the political game. Understanding this logic may help clarify the market mechanisms behind news in highly uncertain environments.

Below is the original article:

The Iran conflict is escalating. Over the past 12 months, we systematically analyzed all geopolitical conflicts involving President Trump. What might happen next? This clear guide explains potential future developments and what they mean for investors and financial markets.

Before we begin, please save this article— it will serve as an important reference for your market outlook over the next 2 to 4 weeks.

On January 17, 2026, we published our first “Playbook,” titled Tariff Playbook. At that time, President Trump was continuously increasing tariffs on the EU and pushing forward with his strategic plan to acquire Greenland. As it turned out, this article nearly predicted the outcome of Trump’s latest round of tariff conflicts with remarkable date accuracy. So, how did we do it?

Since Trump’s inauguration on January 20, 2025, we spent hundreds of hours systematically analyzing news and developments related to his geopolitical and trade war activities. Through this research, we identified a very clear pattern: whenever Trump attempts to achieve an economic or military goal, he tends to adopt a similar negotiation and pressure approach with allies and adversaries.

In 2025 and early 2026, recognizing this pattern has been a key part of our investment strategy. Today, we believe it’s a good time to share this methodology with the X platform and the broader public. We hope it can help everyone find a framework amid market volatility.

Step 1: Almost all conflicts start similarly

First, let’s review how the Iran conflict began.

It wasn’t just from the initial strike on Iran on February 28—it was already set in motion weeks earlier.

In the weeks leading up to the conflict, President Trump repeatedly posted statements like: “A massive Armada is heading to Iran,” and kept urging Iran to “make a deal.”

The Iran conflict is the largest military engagement Trump has been involved in during his second term. But if you look back at the past 6 to 8 weeks, you’ll see that Trump’s approach closely mirrors his previous trade wars and even the tactics used when arresting Venezuela’s Maduro—logically, they follow the same pattern.

Why is that?

Of course, the specific military actions by the U.S. differ, but the underlying negotiation and pressure strategies follow the same historical pattern.

For example, consider this post from November 29, 2025: Trump announced a “complete closure of Venezuelan airspace and surrounding areas.” Note that this statement was issued over a month before the U.S. actually captured Maduro. In other words, before any real action, Trump had already signaled strong pressure and deterrence through a series of public statements and military signals.

Next, look at this post from Trump on Truth Social. Between January 1 and January 18, we saw multiple similar posts.

In these, Trump said, “It’s time to buy Greenland,” and kept pressuring and threatening Denmark. Just days later, Trump imposed broad tariffs on the EU.

Clearly, the first step of Trump’s “War Playbook” is to exert strong verbal pressure through public statements to force the target to “make a deal.”

Step 2: Strategic posture and actual deployment

The second step usually involves visible strategic preparations: before launching full-scale actions, reinforcing deterrence and credibility through military or policy moves.

In the Iran case, this included redeploying military forces, publicly coordinating with allies, and Trump sending the so-called “Armada” to the Middle East.

A similar pattern appeared in the Venezuela incident. The U.S. first announced airspace closures and regional military deployments, with actual actions against Maduro happening later.

In trade wars, the pattern is equally clear: investigations, administrative reviews, and public notices are followed by actual tariff measures.

For example, consider a news report from August 11, 2025. Trump met with Intel CEO Lip-Bu Tan. Just days earlier, Trump posted on Truth Social accusing Tan of “serious conflicts of interest” and demanding his resignation.

A few days later, the Trump administration announced a “deal” with Intel to acquire 10% of the company’s shares. As shown below, this investment yielded over 80% returns in less than two months.

Again, Trump’s goal is almost always to reach a “deal.”

Sometimes, conflicts end at the second stage. After initial threats and pressure “pave the way,” negotiations lead to an agreement, resolving the situation at this stage.

If not, it moves to the third step.

Step 3: Friday night “strikes”

When initial pressure fails to produce results, Trump tends to escalate further—using military force or economic measures.

A stable tactical feature of Trump’s escalation mode is timing. Many major announcements, strikes, or sudden policy shifts tend to happen on Friday nights—after U.S. stock markets close, but before futures markets fully open.

Why choose this timing? Because Trump is highly sensitive to sharp market swings.

Here are some key actions that occurred late on Friday or early Saturday:

• US-Israel joint airstrike on Iran nuclear facilities—June 21
• US military strikes on Caribbean drug ships—September 1
• Threats to impose 100% tariffs on China—October 10
• Closure of Venezuelan airspace—November 29
• Nigerian military operations—December 25
• US airstrikes on Iran—February 28

Since 2025, many geopolitical or policy actions have been timed after market close on Fridays, indicating a deliberate strategy.

If a major geopolitical event erupts during trading hours, market price discovery can become chaotic: liquidity drops sharply, quant algorithms amplify volatility, and intra-day swings can trigger panic chains.

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

Investors, institutions, and governments can use the weekend to digest information, assess risks, consult advisors, and simulate scenarios.

By the time markets reopen, they have a more comprehensive view of the situation.

For the Iran case, this critical moment was February 28. Usually, on the Sunday of that week (before futures open), Trump signals “possible deal” to calm markets.

But this time, no such signals appeared, and the situation moved to the fourth step.

Step 4: Risk premiums spread across assets

Following the shock of step 3, at 6 p.m. Eastern on Sunday, futures markets open, often with sharp price swings across assets.

However, markets tend to remain skeptical about whether the conflict will last long.

The reason is simple: everyone knows Trump ultimately wants a deal. So, initial sharp moves in stocks, commodities, and bonds often retrace before Monday’s open.

For example, look at the market on March 2 (the day before we wrote this article): crude oil and the S&P 500 showed typical reactions.

WTI crude briefly retraced about 70% of its gains, and the S&P 500 even turned positive that day. But today, the trend reversed again—oil hit new highs, stocks dropped to new weekly lows.

This change reflects Trump’s understanding: markets also know he prefers “getting to yes.” So, even if traders bet on a quick resolution, the reality is that conflicts tend to escalate.

Now, the situation has entered the fifth step.

Step 5: Trump hints at “long-term” conflict

When investors expect Trump to “step back” and quickly buy the dip, they are often caught off guard by sudden shifts. As headlines worsen, many believe Trump will soon ease pressure on targets. But the reality is often the opposite.

As shown in his March 2 statement, Trump now says, “The war can go on forever,” claiming the U.S. has “unlimited mid-to-high-end weapons.”

Note that “forever” is in quotes. This is a tactical phrase: Trump’s message is—he doesn’t want the war to truly last forever, but if necessary, the U.S. is fully capable of doing so.

This is also a negotiation tactic.

Since the Iran conflict began, even before actual hostilities, our assessment has been that Trump wouldn’t benefit from a prolonged war. Despite recent references to “forever war,” we maintain this view.

Why? Because the three main policy goals of the Trump administration are: to be a “peace president”; to lower inflation; and to bring U.S. gasoline prices down to $2 per gallon.

Engaging in a long-term war with Iran directly contradicts these core objectives. Especially in a midterm election year, a sustained conflict would significantly disrupt these agendas.

Step 6: Markets start pricing in a long-term conflict

As of March 3, our “Playbook”’s sixth step appears to be unfolding.

Look at the market:

• Brent crude exceeds $85 per barrel—first time in nearly two years
• U.S. stock gains have been fully retraced, hitting new weekly lows
• Safe-haven flows accelerate, capital fleeing risk assets

That day, the Dow dropped about 1,100 points.

At this stage, markets no longer see this as a short-term, symbolic military clash.

Oil at over $85/bbl reflects concerns about supply chain risks, rising tanker insurance costs, and potential partial closure of the Strait of Hormuz.

Meanwhile, the stock market’s new weekly lows are not just reacting to headlines but re-evaluating the duration risk of the conflict.

This is precisely the psychological turning point Trump’s strategy aims to create.

When the first decline occurs, investors often buy the dip, expecting a quick deal. The second decline still sees some buying, believing the escalation is temporary. But by the third decline, market positioning begins to shift significantly.

The so-called “Smart Money” can often identify when market sentiment is overly biased, especially as retail participation rises.

Since 2025, our investment approach has largely been based on this: recognizing Trump’s historical patterns in economic conflicts to anticipate market turning points.

Since 2020, our strategy has returned nearly five times the S&P 500. In 2025 alone, our trades on the S&P 500 yielded a 21.8% return, outperforming the index. This is because we can identify key shifts in market sentiment and trends early.

This brings us to the seventh step.

Step 7: “Conditional” downgrade signals emerge

Before explaining this step, note that the time gap between steps six and seven can vary greatly. For example, during the 2025 trade war, this phase lasted several months, culminating in the “tariff pause” on April 9. This shift was largely driven by the rapid rise in U.S. Treasury yields, as shown below.

Typically, some trigger (catalyst) prompts Trump to either pause or ease tensions. This could be:

• One side of the conflict proposing “a deal”
• Or a significant market change or pressure signal

After risk premiums in stocks, commodities, and bonds widen substantially, Trump often begins to send carefully crafted signals of easing. Note that these statements usually don’t mean genuine concessions.

In the Iran scenario, two possible turning points are:

• A change in Iran’s government
• Or a major event with structural impact on the U.S. or global economy

At this stage, official rhetoric shifts toward conditional solutions. Statements emphasize that negotiations are possible if certain conditions are met; terms like “talks,” “consultations,” or “framework agreements” gradually enter the narrative. The core purpose here is to test the opponent and market reactions without relinquishing strategic initiative.

Recent examples include:

• October 2025: Trump’s trade deal with China
• January 2026: Greenland agreement with the EU
• February 9, 2026: Trade agreement with India

All these follow a similar pattern: threat → action → escalation → gradual de-escalation.

Step 8: Feedback loop between markets and politics

A often overlooked factor in this strategy is that financial markets themselves become part of the negotiation environment. Trump has repeatedly shown high concern for stock performance, energy prices, and inflation expectations, viewing them as part of broader political narratives.

If the conflict drags on and oil prices surge, it directly impacts his three core policy goals: projecting himself as a peace-oriented leader, controlling inflation, and lowering gasoline prices.

Rising energy costs quickly influence consumer sentiment and inflation data, which in turn affect the political landscape during midterm cycles.

According to JPMorgan estimates, if the Strait of Hormuz is closed, oil could rise to $120–130 per barrel, pushing U.S. CPI inflation to around 5%.

The last time U.S. inflation hit 5% was in March 2023, during an aggressive rate hike cycle.

In the current environment, key indicators to watch include:

• Brent crude staying above $90/bbl, heightening inflation fears
• Stock declines of 5% or more, shifting investor sentiment
• Gasoline prices rising over 10%, weighing on consumer confidence

Once these thresholds are approached or crossed, the probability of news about negotiations surging increases sharply.

Important: This is precisely when “Smart Money” begins to position for buying—since retail sentiment is often at its lowest.

Step 9: Deal-making and narrative shaping

In the Iran context, step nine is conditional.

If Iran’s government collapses, the U.S. and Israel are likely to declare mission accomplished and military objectives achieved. In that case, this “Tariff Playbook” strategy would end before reaching step nine.

If not, the process moves to the next phase: almost all major confrontations will ultimately be resolved through negotiations, framed as strategic victories. The specific terms vary, but the narrative remains consistent: “Maximum pressure” forces concessions.

In past trade conflicts, agreements are often portrayed as proof that escalation strategies brought economic advantages (e.g., trade deals with China, the EU, India, Vietnam, Japan).

In corporate conflicts, initial public pressure is followed by equity investments or structural adjustments (e.g., Intel and rare earths agreements).

In geopolitical conflicts, ceasefire or framework agreements are seen as leveraging tough stances to force compromises (e.g., multiple conflicts ending in 2025).

If Iran’s conflict follows the established pattern, real resolution usually only occurs after sufficient stakes and pressure are demonstrated.

Such resolutions may include: ceasefire linked to nuclear concessions; regional security arrangements with enforcement mechanisms; or sanctions adjustments conditioned on compliance.

The specific structure of the agreement isn’t the most critical; what matters most is timing and narrative framing.

Step 10: Sharp re-pricing of assets and political “victory narratives”

The final phase of Trump’s conflict strategy doesn’t end with the announcement of an agreement. The real endpoint is how markets react and the subsequent political narrative.

Historically, once a clear resolution framework appears, markets don’t adjust gradually—they undergo rapid, intense re-pricing. This is mainly due to changes in market positioning.

When negotiations become credible, investors tend to be highly defensive: energy assets rise, stock risk exposure drops significantly, and volatility remains high due to uncertainty.

When this uncertainty suddenly lifts, positions are quickly unwound, causing sharp reversals.

This pattern has repeated multiple times in 2025—April, August, October, and January.

In past trade wars, announcing a tariff pause or framework agreement often led to swift stock market rallies, even if deeper structural issues remained unresolved. Similarly, during escalations in geopolitical conflicts, markets tend to fall sharply when shipping lanes reopen or conflict doesn’t expand regionally, with oil prices dropping rapidly.

These price re-evaluations are often intense because they’re driven not by fundamental improvements but by the rapid unwinding of risk premiums. Market rallies are not because everything is perfect but because the probability of the worst-case scenario has been significantly lowered.

Again, even brief market pricing for the “worst case” is a crucial part of Trump’s negotiation strategy.

We maintain the view that if in the coming days or weeks, U.S.-Iran military actions do not cause Iran’s government to collapse, negotiations will eventually return to the table.

Trump does not want a “perpetual war,” as such a scenario conflicts with his economic goals.

What might happen in the next 2–4 weeks

Currently, the situation appears to be transitioning between peak escalation rhetoric and signals of conditional easing. Compared to the initial airstrikes, markets are now beginning to price in a more prolonged conflict.

Oil prices have broken higher, the brief stock rebound has faded, and defensive capital flows are accelerating.

Historically, this is a phase where pessimism begins to embed in market positioning. Meanwhile, the probability of negotiations quietly rises beneath the surface, and “Smart Money” starts seeking trading opportunities.

This is already evident in the recent price movements of silver and gold. Both metals have sharply declined—silver down about 20% in 24 hours—even as the market continues to reprice risk premiums.

This clearly indicates a large-scale retreat and wait-and-see attitude, with holding cash increasingly seen as the most direct safe haven.

And “Smart Money” is often observing these capital flows.

Final reminder: don’t forget the ultimate goal

In the coming weeks, three main scenarios are likely:

1. Short-term escalation, pushing oil prices higher and stocks lower, followed by a sudden shift in rhetoric toward negotiations. Given overly defensive positioning, once signals of talks emerge, assets could reverse quickly.

2. Controlled but sustained conflict. Oil remains high but not soaring; stocks fluctuate with high volatility, awaiting clearer developments. Resolution might come later this month after continued pressure.

3. Significant regional escalation, such as a substantial disruption of shipping lanes or broader involvement of other countries. Oil could spike into triple digits, prompting deeper re-pricing of risk assets. While less likely given historical patterns and the current midterm election cycle, it remains possible.

Ultimately, remember this: since Trump took office nearly 13 months ago, almost every major conflict involving him has ended with a deal.

Trump is fundamentally a dealmaker. Recognizing and following this pattern can often lead to gains.

Our Strategy

In today’s turbulent markets, investors who stay objective and adhere strictly to systematic methods are entering one of the most attractive trading environments in recent years.

This objective, systematic approach has allowed our strategies to consistently outperform benchmarks. Since 2020, our investment returns have approached five times the S&P 500.