Trump says the US no longer needs a deal with Iran, and the Treasury selloff deepens

President Donald Trump said on Thursday that the United States should no longer seek a deal with Iran². “We don’t need a deal with Iran. Those days have long since passed,” Trump wrote³.

In the same message, Trump said he wanted Vice President JD Vance to turn “his complete and total attention” to alleged corruption in Democrat-run cities and states^1,3. Trump labelled the Democrats he was targeting “CORRUPT AND EVIL”³.

The shift follows Vance’s conclusion that the Iran war drove the Republicans’ heavy losses in the midterm elections³. Trump is now reorienting his deputy’s focus away from Iran³. Rather than leading diplomacy with Tehran, Vance is to concentrate on crime and corruption at home, according to the president’s instruction^1,3.

Why it matters to investors

Markets had been trading as if the Iran war was all but over³. Oil prices surged and stocks sank after Trump’s post reinjected uncertainty³.

The selloff in Treasurys accelerated in early US trading on Thursday after Trump dashed hopes for an Iran peace deal, and European government bonds followed⁴.

The statement reverses a diplomatic track that appeared to be opening. On Wednesday, reports said Vance was weighing direct talks with a top Iranian security official as Washington looked for a way out of the war^5,7. Trump had authorised Vance to take the lead in renewed Iran diplomacy, according to one account, though regional officials feared that a hard-line commander of the Islamic Revolutionary Guard Corps could threaten any deal⁶. One report also said Trump sees a June memorandum of understanding as a blunder⁵.

What to watch

The immediate question is whether the planned contacts between Vance and Iranian officials are now off, given Trump’s instruction that his deputy focus on domestic matters^1,7.

For markets, the next readings come from oil and government bonds, which moved first on the news^3,4. Investors will watch whether the rise in Treasury yields extends beyond the initial reaction and whether energy prices hold their gains as the prospect of a negotiated end to the war recedes^3,4. The move in European bonds, which followed Treasurys lower, shows the reaction was not confined to the US market⁴. Investors will also watch whether Trump’s reported view of the June memorandum of understanding as a blunder shapes any future terms with Tehran⁵.