It takes two to TACO: markets confused as Trump talks denied by Iran
Published: 07:59 23 Mar 2026 EDT
Financial markets swung violently on Monday after President Donald Trump claimed the US and Iran were in productive talks toward a resolution of Middle East hostilities, only for Tehran to flatly deny any contact had taken place.
Trump wrote on Truth Social that "very good and productive conversations" had taken place in the past two days and so he had instructed the Department of Defense to "postpone any and all military strikes against Iranian power plants and energy infrastructure for a five day period, subject to the success of the ongoing meetings and discussions."
The FTSE 100 lurched from a loss of 240 points to a gain of more than 50 before flattening off, while US futures pointed to a stronger open with the S&P 500 expected to rise around 1.6%.
Bond markets saw some of the most dramatic moves, with the yield on the UK 10-year gilt – the interest rate the government pays to borrow – surging to almost 5.1% before Trump's social media post saw it plunge below 4.8%, a swing of 0.3 percentage points in a matter of seconds.
Iran's Fars news agency said there had been "no direct or indirect contact" with the United States, nor through any intermediaries.
Neil Wilson, market analyst at Saxo, invoked the market's favourite acronym for Trump's second presidency – TACO, or Trump Always Chickens Out – suggesting the president had looked at turbulent markets and moved to walk back a 48-hour ultimatum issued on Saturday without losing face.
"It takes two to TACO," Wilson said, cautioning against reading too much into the development and raising many questions for the market.
"Can we believe that it’s this easy to end the conflict? Is Iran seeking a way out or do they want to continue asymmetric warfare for months? Can the US stop Israel?
"It's incredibly difficult to trade these markets when Trump is swinging between massive escalation and declaring peace/victory... but the market is happy for now that we do not enter a new phase of danger."
Brent crude oil futures fell from over $113 a barrel to below $101 before rebounding to $106 a barrel, down 5.4% at the time of writing. US WTI was down a similar percentage at $92.90 a barrel, having topped $101 early in Monday trading before plunging to bekow $89 after Trump's post.
