Will Trump blink first for a face-saving exit from his Iran war mess?

 

·       Ahead of the Nov. '26 US midterm election, Trump has to ensure lower oil prices for Main Street; thus, he can’t afford an extended hardline stance.

·       Trump may blink first and allow an initial extension of the Iran war ceasefire by 60 days by removing the US naval blockade of the SOH.

· Trump may eventually extend the ceasefire till Dec '26 for a ‘great deal’ with Iran.

On Friday, May 29, 2026, the market's focus was on Trump’s morning moods and truths as he was set to approve/disapprove a provisional MOU with Iran. Eventually, Trump posted a truth:

·       Iran must agree that it will never have a nuclear weapon or bomb.

·       The Hormuz Strait must be immediately open, with no tolls, for unrestricted shipping traffic in both directions.

·       All water mines (bombs), if any, will be terminated (we have removed, through detonation, numerous such mines with our great underwater mine sweepers). Iran will complete the immediate removal and/or detonation of any mines that are left, which will not be many!

·       Ships caught in the Strait due to our amazing and unprecedented naval blockade, which will now be lifted, may start the process of heading home! Say HELLO to your wives, husbands, parents, and families from me, your favorite president!

·       The enriched material, sometimes referred to as “Nuclear Dust,” which is buried deep underground with virtually collapsed mountains, caused by our powerful B2 Bomber attack 11 months ago, sitting on top of it, will be unearthed by the United States (which, it is agreed, is the only country, along with China, with the mechanical capability of doing so!) in close coordination and conjunction with the Islamic Republic of Iran plus the International Atomic Energy Agency and DESTROYED.

·       No money will be exchanged until further notice.

·       Other items, of far less importance, have been agreed to.

·       I will be meeting now, in the Situation Room, to make a final determination.

On Friday, White House reporters close to the White House said Trump’s Truth post was poorly worded. He was not announcing an immediate end to the SOH naval blockade but saying it would only be lifted if Iran agreed to his proposed conditions.

In summary, on May 29, Trump basically put potential MOU conditions:

·       Iran must agree that it will never try to develop a nuclear weapon or purchase from any other country.

·       Iran must open the Strait of Hormuz (SOH) immediately without any tolls or preconditions for all countries.

·       Iran must clean any remaining sea mines to ensure the smooth passage of cargo ships through the SOH.

·       If Iran agrees to the above conditions, then the US may withdraw the naval blockade of the SOH and Iranian ports.

·       Iran must agree to destroy the nuclear dust (Highly Enriched Uranium-HEU) by either the US or China, with the presence of the IEA.

·       No funds for Iran until further notice or compliance with the above T&Cs (terms & conditions).

Trump would make a "final determination" during the Situation Room meeting. But despite the meeting lasting about 2 hours, no final decision was announced afterward. On May 30 (Saturday), in an interview with his daughter-in-law, Lara Trump (Fox News' "My View"), Trump expressed cautious optimism while maintaining a hard line (peace through strength approach):

·       We have all the cards because the US and Israel have defeated them militarily.

·       Iran’s navy and air force are totally gone, 100 percent.

·       They’re very good negotiators; they’re crafty, but the US holds the advantage.

·       If no good deal is reached: We’ll have to just finish the job or end it a different way.

· Previous B-2 strikes prevented Iran from already having a nuclear weapon.

·       Iran has agreed to no nuclear weapons-- it as an interesting development---

· I'm in NO HURRY...Gasoline prices will tumble, but if I'm in a hurry, I won't make a good deal! Slowly but surely! If we don’t get what we want, we’ll end it a different way.

·       The United States largely spared Iran’s military while targeting other elements of the country’s leadership and military infrastructure.

·       Their navy is totally gone, 100%. Their air force is totally gone, 100%. Their military, we sort of left it alone because we think that their military is somewhat moderate.

· We've taken different forms of leadership out; we've actually left their military alone. People would be surprised to hear that because mistakes have been made in wars where you wipe out everybody, and then you have a country that, you know, for 40 years can never rebuild. You look at what happened with Iraq.

·       MOMENTS LATER: 'THEY (IRAN) HAVE NO MILITARY. WE WIPE OUT THEIR MILITARY.'

·       I’d like to say I’m in a hurry because gasoline prices are going to come tumbling down, but if you are in a hurry, you’re not going to make a good deal—and if we do not get what we want, we are going to end it a different way.

·       The strait should stay open and accessible without fees.

Trump seeks tougher changes to the Iran deal drafted by envoys: Trump hardens Iran deal terms, delaying the final agreement.

As per Axios, President Trump asked for amendments to a draft Iran agreement negotiated by US envoys during a Situation Room meeting on Friday, according to officials briefed on the talks. The draft reportedly includes a 60-day negotiation window and provisions on Iran’s nuclear program, including its enriched uranium stockpile and limits on further enrichment. Trump is seeking more specific language on how and when Iran’s nuclear material would be transferred or controlled, as well as revisions to wording on the Strait of Hormuz. The discussions remain ongoing, with additional responses expected from Tehran in the coming days, and no final agreement has been reached.

Trump rejects CNN report on Iran deal.

On early Monday, the Asian session, June 1, US President Trump criticized CNN's reporting on his proposed agreement with Iran, saying the network had falsely claimed the deal did not address nuclear issues. Trump posted on his Truth: Fake News CNN said today, routinely, that my Iran Nuclear Deal doesn’t talk about Nuclear, when actually it states, very clearly, that Iran will not have a Nuclear Weapon. It then goes on, in very strong and lengthy detail, to discuss various other aspects of Nuclear. In fact, that’s what most of the agreement is about. CNN, and so many others in the Fake News Media, are a Low Ratings disaster. Even with new ownership, it is unlikely to ever get better!!! President DJT

IRAN DISPUTES TRUMP’S STATEMENTS ON STRAIT OF HORMUZ AGREEMENT AS NEGOTIATIONS APPROACH FINAL STAGE

Meanwhile, on Sunday, May 31, Iran’s parliament speaker, Ghalibaf, said:

·       Iran will not approve the US deal until its rights are secured.

·       No agreement with the US would be approved unless Tehran was certain it had secured its rights.

·       We will not approve any agreement until we are certain that we have secured the rights of the Iranian people.

·       Those working on diplomacy had no trust in the US words or promises.

·       Revisions to Iran’s seventh development plan would be reviewed by specialized parliamentary committees with a focus on reconstruction after war damage.

·       There is no trust in the enemy’s words and promises.

·       Our only criterion is to achieve tangible results before we fulfill our commitments in return.

·       External actors are attempting to use economic pressure and media campaigns to foment division and undermine national cohesion.

·       Diplomacy's task is to convert military victories into political and legal gains.

ADVISOR TO IRAN'S SUPREME LEADER MOHSEN REZAEI:

·       TRUMP BETRAYING DIPLOMACY A THIRD TIME BY PERSISTING WITH NAVAL BLOCKADE, MAKING EXCESSIVE DEMANDS---

The US Secretary of War Hegseth made the strongest public statements from the Cabinet, speaking at the Shangri-La Dialogue defense summit in Singapore on May 30:

Trump warned Iran to make a deal or face military action.

On Friday, the US Secretary of War Hegseth said President Trump recently told cabinet members that Iran could either accept a deal ensuring it does not obtain a nuclear weapon or face the alternative represented by the Pentagon chief. The president warned Iran to make a deal or face military action: “We were in a cabinet meeting just a couple of days ago, and the president said, ‘Hey, it will be a great deal—and if Iran doesn’t want to make a great deal that ensures they don’t get a nuclear weapon, they can deal with the guy on my left.”

The US blockade of Iran is still in place.

Hegseth said the naval blockade on Iran remains in place and warned Tehran that Washington is ready to use military force again if diplomacy fails to produce a deal preventing Iran from obtaining a nuclear weapon.

·       The blockade is very much still in place.

·       The Strait of Hormuz had come up repeatedly in talks with US partners.

·       Any eventual outcome, whether through agreement or continued pressure, must leave the Strait of Hormuz open and free of tolls.

·       Once a deal is had or not, depending on the choice they make, it will be an open strait, a toll-free strait that the entire world can use, which is the way that it should be.

·       Iran claims to control the waterway but argues that US military pressure has shaped the negotiating dynamics.

·       They want to say that they control the Strait, but we do.

·       Everything behind the scenes shows that we are in control when it comes to that, including how the dynamics of the negotiation are coming together.

·       On the nuclear talks, Hegseth said President Donald Trump’s position had not changed and that any deal must ensure Iran never obtains a nuclear weapon.

·       The goalposts haven’t shifted at all-- Iran knew “very, very clearly” what Washington expected from the negotiations.

·       We think we’re in a good place to make that deal—or they can deal with the War Department. And we are prepared. We’re more strongly postured today than we were on day one to address it that way if we have to.

·       The US remained focused on strengthening its defense industrial base, including production of air defense missiles, Tomahawks, and other munitions, while investing in drone capabilities.

·       The US is “more than capable of resuming strikes on Iran if no deal is reached.

· Our ability to recommence if necessary... we are more than capable. Our stockpiles are more than suited for that--

·       Trump is being “patient” and wants a “great deal” that ensures Iran never gets a nuclear weapon.

· Iran knows “very clearly what our expectations are.” They can either make a deal now or “deal with the War Department.”

·       The US is postured even stronger today than at the start of the conflict.

Marco Rubio – Secretary of State: Rubio has been more measured in recent days.

·       The US has made “significant progress” on opening the Strait of Hormuz without tolls and addressing Iran’s nuclear ambitions.

· We’re still a work in progress... We have a pretty solid thing on the table.

· Trump “is not going to make a bad deal.” Either a good agreement or “deal with it another way.”

·       He expects further announcements from President Trump.

Scott Bessent – Treasury Secretary: Bessent spoke at the White House press briefing on May 28–29 and took a cautious tone.

· “It’s a mistake to get out ahead of the president. "Nothing is final until Trump approves it.

·       Reiterated Trump’s red lines: Iran must turn over its highly enriched uranium, cannot pursue a nuclear weapon, and the Strait of Hormuz must have free navigation.

·       On sanctions relief, "We'll see”—any easing would be gradual and depend on milestones.

·       Trump “is not going to take a bad deal”—he wants a great deal for the American people.

Iran has rejected the U.S. demand that it surrender or transfer its stockpile of highly enriched uranium (near-weapons-grade)—even as part of the proposed 60-day memorandum of understanding (MoU).

·       Tehran has no intention of making nuclear concessions during the 60-day window or afterward. They view the enriched uranium as a core strategic asset and red line.

·       A hardline faction within Iran’s leadership (with seats on the Supreme National Security Council) is actively working to block any agreement with the U.S., calling American demands “excessive.”

This creates a significant gap between the two sides:

·       The U.S. position (Trump’s red lines): Iran must never have a nuclear weapon, the enriched uranium must be destroyed or removed (“Nuclear Dust”), the Strait of Hormuz must be fully open with no tolls.

·       The Iranian position: Willing to extend the ceasefire and open the Strait, but not ready to give up its nuclear material or make major concessions on the program itself right now.

Current Status

·       The tentative MoU to extend the ceasefire by 60 days and reopen Hormuz is stalled. Trump has not given final approval after the Situation Room meeting. U.S. officials are still saying they want a “great deal,” not a weak one.

·       This rejection by Iran and internal hardline resistance increases the risk that the fragile ceasefire could collapse if no compromise is found quickly.

·       Iran Rejects U.S. Demand to Surrender Enriched Uranium as Hardline Faction Moves to Block Any Nuclear Deal

·       Iran has rejected U.S. demands to surrender its enriched uranium stockpiles under any circumstances, even if a memorandum of understanding (MOU) is signed and a proposed 60-day negotiation window begins

·       The report indicates Tehran has no intention of engaging in nuclear concessions during or after that period, with no expected change to its current nuclear posture.

·       Meanwhile, a faction within Iran’s leadership that holds representation on the Supreme National Security Council is actively working to block any agreement with the United States, regardless of terms, citing what it views as excessive U.S. demands.

Iran to submit new amendments to draft MOU.

Iran will apply its own amendments to the draft memorandum of understanding (MOU) in talks with the United States, IRGC-affiliated Tasnim News reported, citing an informed source:

·       The exchange of texts is continuing, and Iran will naturally apply its own amendments to the text as well. Nothing has been finalized yet

·       The source said amendments proposed by President Trump did not mean they had been accepted by Iran, adding that Tehran was fully prepared if no agreement were reached.

Iran MP urges unity despite ‘different views’ over US talks

An Iranian lawmaker urged officials on Monday to preserve unity and support the negotiating team despite differing views over talks with the United States.

·       We may have different views on the negotiations, but we must all help the negotiating team

·       The country had paid high costs in the war, making unity an undeniable necessity.

Fragile ceasefire

The security situation in the Persian Gulf has deteriorated following a series of military exchanges between the United States and Iran. The latest escalation began after US Central Command (CENTCOM) announced strikes on Iranian radar installations and drone command-and-control facilities in Goruk and on Qeshm Island. According to the US military, the operation was conducted in response to Iran allegedly shooting down a US MQ-1 drone over international waters and was aimed at protecting regional shipping and maritime security.

Iran responded through its Islamic Revolutionary Guard Corps (IRGC), which claimed that its Aerospace Force had targeted an air base allegedly used in the American operation. Tehran stated that the retaliatory strike destroyed pre-designated targets linked to the attack and warned that any further US military action would trigger a much stronger response.

The situation became more concerning after Kuwait reported that its air-defence systems were intercepting incoming missiles and drones. While Kuwaiti authorities did not identify the source of the projectiles, the development raised fears that tensions could spread beyond direct US-Iran exchanges.

Although neither side has indicated an intention to pursue a full-scale war, the incidents have heightened concerns about regional stability, particularly around the strategically important Strait of Hormuz, a critical route for global energy supplies and international trade.

Bottom line

Both Trump and Iran’s top political leadership have to satisfy their domestic political compulsion—Trump is also looking for a face-saving exit from his Iran war mess. Thus, we may see some compromises (concessions) from both sides in the coming days. Iran’s domestic economic condition is also worsening day-by-day despite the apparent resilience of the general public. As Trump always chickens out, he may extend the ceasefire by another 60 days for actual nuclear negotiations. But Trump has to lift the US naval blockade, at least partially, to permit the free passage of all Iranian vessels.

Despite the latest fiasco and Trump’s sudden change of stance, the Iran war may be over, but the Strait of Hormuz double blockade may not be over, and it may take at least July and August to be fully operational normally, as Iran has to remove undersea mines throughout June and July. Now the question is whether Trump will agree to Iran’s full control over the Strait of Hormuz and the possession of nuclear dust (HEUs)?

Trump is clearly under pressure and looking for a face-saving exit from his Iran war mess at the earliest. In an early European Session, June 1, Trump posted on his Truth:

Iran really wants to make a deal, and it will be a good one for the U.S.A. and those who are with us. But don’t the Democrats and various seemingly unpatriotic Republicans understand that it is MUCH tougher for me to properly do my job and negotiate when political hacks keep negatively “chirping,” at levels never seen before, over and over again, that I should move faster, or move slower, or go to war, or not go to war, or whatever. Just sit back and relax; it will all work out well in the end - It always does! President DJT

Trump’s late-night truth itself reveals that he is under immense pressure for his Iran war ‘fun,’ which has now turned into a mess.

Bottom line

Ahead of the Nov '26 midterm election, Trump has to ensure lower prices of oil (pre-Iran war levels), but considering the present deadlock over the SOH and Iran’s suspected HEUs, it may not be possible for a quick solution unless Trump blinks first. Iran knows Trump always chickens out first due to domestic political compulsions, and also Wall Street & Main Street. Thus, we may see another instance of TACO (Trump Always Chickens Out) trade before any meaningful correction back to reality, as SPX-500 is now trading over 30 TTM PE, a historical bubble zone.

Technical outlook: DJ-30, NQ-100, and SPX-500

Looking ahead, whatever may be the narrative, technically Dow Future (CMP: 51120) now has to sustain over 51500-51700 for a further rally to 52300-52700 in the coming days; otherwise, sustaining below 51300/51000 it may fall to 50500/50200-50000/49500 and further to 48500/48000-47600/46600 and 46000/45700*-45200*/45000 and 43800/43000-42000/39000-36800 in the coming days.

Similarly, NQ-100 Future (30600) now has to sustain over 30700 for a further rally to 31000/31200-31500*/32000 and even 32400/32500 in the coming days; otherwise, sustaining below 30600/30300-30000/29500-29100/28500*-28100/27800, it may fall to 27400-27000 and 26600/26300-26000/25600, NQ-100 may again fall to 24600/24400-24000/23900, and further to 23600/23300-22800/22400 and 21900-21000 in the coming days.

Looking at the chart, technically SPX-500 (CMP: 7600) now has to sustain over 7700 for a further rally to 8000-8300 in the coming days; otherwise, sustaining below 7675/7650-7550/7500-7300/7200 and 7100-6900, it may fall to 6835/6700 and further 6600-6500/6450 and 6350/6300-6250/6180 and 5860-4800 in the coming days.