Oil, Wall Street, and bond markets are the only forces capable of restraining U.S. President Donald Trump’s escalation of the Iran conflict, with financial pressure increasingly shaping the direction of US policy, warns the CEO of one of the world’s largest independent financial advisory organisations.
The comments from Nigel Green of deVere Group come after several weeks of market turbulence linked directly to the war, during which oil prices have surged above $100 a barrel, the S&P 500 has endured sustained losses, and US Treasury yields have climbed sharply as investors reassess inflation and fiscal risks.
On February 28, Brent crude was trading below $95 a barrel and the 10-year US Treasury yield sat at 3.96%. By March 21, as strikes intensified and fears grew over disruption through the Strait of Hormuz, oil had surged through $105 and yields had pushed above 4.3%, while the S&P 500 had fallen for four consecutive weeks.
The pressure point came days later. Between March 21 and March 23, oil spiked toward $107, equity markets extended losses, and Treasury auctions during that same week drew weaker demand, pushing yields higher still.
On March 23, the US announced a temporary five-day pause on strikes targeting Iranian energy infrastructure.
The market reaction was immediate. On March 24, oil prices dropped sharply, falling close to 10% from their peak.
The S&P 500 rebounded strongly in the same session, while Treasury yields eased back from recent highs. The sequence was clear: escalation drove stress across all three indicators; restraint followed.
He says: “Three indicators are now acting as real-time guard rails on policy: oil prices, equity markets and Treasury yields. They’re sending signals to Trump he cannot ignore.”
“Each time the conflict intensifies, oil spikes, stocks fall, and yields rise. Each time there is even a hint of restraint, those moves reverse. The pattern now seems firmly established.”
Energy markets have been the most immediate transmission channel. Disruption fears around key shipping routes and infrastructure have driven crude prices into triple digits in recent weeks, feeding directly into inflation expectations and consumer costs.
“Oil is the fastest pressure point. Higher energy prices hit households almost immediately. This creates political and economic pressure that builds very quickly.”
He adds: “We’ve already seen how sensitive decision-making is to this. When oil surged aggressively, there was a clear shift in tone and action. Markets forced a response.”
Stock markets have reinforced that message. The S&P 500 has recorded multiple weeks of losses since the conflict intensified, with declines closely tied to escalation points and rebounds following signals of de-escalation.
The deVere CEO says: “Wall Street is acting as a barometer of confidence. Sustained declines tighten financial conditions, weaken sentiment and raise the stakes for policymakers.
“Sharp sell-offs are not just market noise. They reflect growing concern about the economic consequences of prolonged conflict. This feeds directly into the broader outlook.”
The bond market, however, represents the most structurally significant constraint. Treasury yields have moved higher in recent weeks, driven by a combination of inflation fears, heavy issuance and signs of weaker demand at auctions.
“Rising yields are a critical warning sign. They increase the cost of financing an already enormous debt burden and ripple through the entire economy via mortgages and corporate borrowing.
“With US debt above $39 trillion, the sensitivity to higher yields is far greater than in previous cycles. The margin for error is much smaller,” he explains.
Volatility in the Treasury market has also intensified, with liquidity conditions deteriorating during periods of stress. This has raised concerns about how easily the US can continue to fund large deficits if demand becomes less reliable.
“The assumption that demand for US debt will always absorb whatever is issued is being tested. If that assumption weakens, the implications are significant.
“Higher yields, weaker demand and elevated volatility combine to create a powerful constraint. It is one of the few forces that can genuinely influence the trajectory of policy.”
Nigel Green continues: “Taken together, these three variables form a clear framework. Oil reflects immediate inflation and consumer pressure. Wall Street signals confidence and financial conditions. And Treasury yields determine the sustainability of government financing.
“Escalation drives all three in a negative direction. Even limited de-escalation produces an immediate stabilisation.”
He concludes: “Markets aren’t just reacting to events, they’re influencing them.
“Oil, equities and bond yields are acting, it seems, as the only effective guardrails for Trump.”
