Will tomorrow’s D-Day rain heavily on Iran, the world economy and stock prices?

April 7 in Iran is D-Day for the world economy, stock prices and our super.  And stocks will rise or fall on a mooted ceasefire that hopefully will be worked out today.

While it’s April 7 here today, it’s only April 6 in Washington and Wall Street, so we’re one day out from 2026’s ‘D-Day’ (Trump’s Destruction of Bridges and Power Plants day), which this very unusual President calls “Power Plant Day and Bridge Day”. If it wasn’t so serious for the Iranian people, the world economy and our investments/super, you could jokingly inquire as to where he got that name.

While they don’t have the Hollywood feel of Operation Epic Fury and Liberation Day, what happens tomorrow in Iran takes the world and financial markets into largely unchartered waters.

True to history, the influencers who send Wall Street’s stock prices and market indexes, (such as the Dow Jones Composite, the S&P 500 of top US stocks and the tech-heavy Nasdaq) up or down have overnight backed a positive outcome tomorrow, with these market-tracking indexes in the green. However, the more sanguine oil market players have kept oil prices elevated, despite the reports that a 45-day ceasefire is now on the table.

The US-based political website Axios that clearly has credible connections to the people in power have reported the US, Iran, and a group of regional mediators were discussing terms for a potential 45-day ceasefire that could lead to a permanent end to this war. Of course, while a deal for a ceasefire is unlikely by tomorrow, who knows in this new world defined by Donald Trump?

And it makes sense to believe that if the destruction promised for tomorrow is delayed, some alternative plan for temporary peace could show up this week.

This is what smart money is backing on Wall Street, with the S&P 500 index up 0.3% (or 22 points) before the close of trade. Well, I hope it is smart money and it’s possible, as repeated news stories have surfaced that associates close to the President have been able to make some interesting market bets ahead of announcements from the man at the top. But that’s a story for another day.

So, we’re going to sweat it out between now and tomorrow wondering if a Hollywood-style last minute rescue of the world economy and stock markets will happen. A 45-day ceasefire would be a damn good start. Why? Try these potential positive consequences:

1. Oil prices would fall.
2. The Strait of Hormuz would be open, which would help oil prices fall further.
3. Stock markets would rebound in anticipation of a positive outcome from the ceasefire talks.
4. Inflation concerns would be hosed down, while spiking short term.
5. Central banks would look through this short-term rise in inflation.
6. Bond market yields and interest rates would fall.
7. We would avert a global recession.

That’s why Wall Street is happy to punt on a positive outcome. However, if talks fail today and D-Day plays out, then those seven points above could be reversed.

News from Reuters and reported by CNBC adds to the market positivity we’ve seen overnight. “Reuters also reported that Iran and the US have received a plan to end hostilities that, if agreed, would result in an immediate ceasefire and the reopening of the Strait of Hormuz,” CNBC’s Sean Conlon and Fred Imbert told us. “The framework, which could come into effect on Monday, was put together by Pakistan, an unnamed source told Reuters.”

Until we actually hear that President Trump and the Iranian leadership have given a ceasefire the thumbs up, sensible people and investors should be on tenterhooks about the next 24 hours. Anyone who invests big time to get in before a possible surge in stocks tomorrow is a punting speculator.

As someone who invests other people’s money, I want to see if an uptrend for the global economy and stock prices is on the cards. That’s when I’ll jump on board to ride share prices higher.

I want a sensible Trump to do his usual TACO play (where Trump Always Chickens Out), and I’d argue that we just can’t stomach a fake TACO with that D-Day deadline looming.

Peter Switzer

Peter Switzer is the founder of Switzer Group - a content, publishing and financial services firm. Peter is an award-winning broadcaster, talking each morning to 2GB's Ben Fordham about the latest in finance and money. You can read his views daily on Switzer.com.au, and subscribe to Switzer Report for his latest insights, analysis and recommendations.

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