US-Iran Talks Failed

Alright, let me get straight to the point, because this weekend we had developments that almost changed everything.

Wall Street just had its best week since November, as markets were celebrating the two-week ceasefire between the US and Iran, expecting that negotiations would lead to something positive.

And then… the Islamabad meeting happened. 21 hours of talks and no result. With the ceasefire hanging by a thread, the Strait of Hormuz remains an open issue and the tension keeps rising.

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THE BEST WEEK SINCE NOVEMBER

This past week was very strong for US markets. The S&P 500 rose about 3.6%, the Nasdaq surged 4.7%, and the Dow Jones gained 3%. It was the best weekly performance for all three indices since November.

So why did this happen?

The main reason was the ceasefire. When the two-week pause in hostilities between the US and Iran was announced, markets breathed a sigh of relief. The expectation that negotiations could lead to a resolution was enough.

On Friday, however, I saw a slight pullback in the S&P 500 and the Dow Jones, while the Nasdaq managed to stay positive thanks to semiconductor stocks like Nvidia ($NVDA) and Broadcom ($AVGO).

Inflation also played a role. The March CPI report showed an increase, with a large part of that coming from rising energy costs.

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THE TALKS IN PAKISTAN

Now let’s move to the main story, where things get even more interesting.

While Wall Street was celebrating, over the weekend I watched the historic talks in Islamabad unfold.

The US and Iran sat at the same table, aiming to find a solution to the conflict. Vice President JD Vance led the US delegation, alongside special envoy Steve Witkoff and Jared Kushner.

What happened?

21 hours of negotiations. Vance reportedly spoke with Trump “half a dozen times, maybe even a dozen” during the talks.

And in the end… nothing.

The main sticking point? Nuclear weapons.

The US demanded a clear commitment from Iran that it would not develop nuclear weapons. Vance was explicit: the US needs a firm assurance that Iran will not pursue a nuclear weapon or the tools that would allow it to acquire one quickly.

Iran, of course, refused.

From Iran’s side, state media described the US demands as “excessive,” including removing nuclear materials from the country and opening the Strait of Hormuz.

Iranian officials said the talks will continue in another round after a pause.

Vance left behind what he called a “final and best offer,” boarded Air Force Two, and departed. Now we wait to see whether Iran will accept. And no one really knows what will happen to the ceasefire once the two weeks expire.

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ESCALATION IN THE BACKGROUND

The atmosphere was tense from the start.

The Iranian delegation, led by parliamentary speaker Qalibaf, arrived dressed in black, mourning Supreme Leader Khamenei. They carried shoes and school bags of students killed in a school bombing. As one Pakistani source told Reuters, “the temperature rose and fell throughout the meeting.”

At the same time, two US destroyers, the USS Frank E. Peterson and the USS Michael Murphy, passed through the Strait of Hormuz for the first time since the war began. Their mission was mine-clearing operations targeting mines placed by the Revolutionary Guards.

Iran, however, claimed something completely different, that it forced a US vessel to turn back. At this point, I can’t say who is telling the truth.

What I do know is that three supertankers crossed the Strait on Saturday, the first ships to leave the Gulf since the ceasefire began. Each one carries about 2 million barrels of oil.

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TENSIONS RISING EVEN FURTHER

Trump reacted strongly to reports that Iran is charging fees to tankers.

“They better not be doing that, and if they are, they better stop now!” he posted on Truth Social. “That’s not the deal we made!”

At the same time, the Revolutionary Guards warned that any attempt by military vessels to pass would be met with a “strong response.” Only commercial ships would be allowed through, under strict rules.

And then came the biggest move.

In the middle of all this, Trump decided to escalate further by announcing a blockade of the Strait of Hormuz. The US Navy is now moving to take control of the situation.

“All or none,” he said. “No one paying illegal tolls will have safe passage.”

In simple terms?

He’s trying to take control of one of the most critical choke points in the global oil market.