A report that Iran and the US were inching closer to a peace deal sent oil prices plunging and stock indexes soaring, as some traders claimed that the false starts were starting to smell of market manipulation.
A report by Axios published on Wednesday said the two countries were closing in on “a one-page memorandum of understanding to end the war and set a framework for more detailed nuclear negotiations”, amid the US-Israeli war on Iran.
Brent crude dropped from $108 per barrel to $97 after the report, before regaining some ground. The international benchmark was still down around seven percent at roughly $102 per barrel.
Just 70 minutes before the Axios report dropped, nearly $920m was wagered on crude oil short positions, Unusual Whales posted on X. The social media account spotlights activity with hallmarks of potential insider trading.
The holder of the short position would have gained an estimated $125m, Unusual Whales said.
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Oil sold off on the expectation that a peace deal would lead to the reopening of the Strait of Hormuz, where both Iran and the US are trying to enforce competing blockades, even as they abide by a fragile ceasefire.
The bet ignited a firestorm on X among traders and financial commentators.
‘Insider trading?’
“Every major announcement in this war has been front-run by someone who knew it was coming. What kind of war is this? This is more like a trading desk with an army,” one person wrote on X.
“When is everyone going to start realizing that the manic on again off again war/peace rhetoric is really just insider trading? And sprinkle in some murder,” former Republican Congresswoman Marjorie Taylor Greene wrote on X.
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“Only a select few in the top tax bracket are benefiting from this, and the majority of you ain’t in it.”
The sell-off in oil prices was accompanied by a broad rally in stock indexes. The tech-heavy Nasdaq rose 1.5 percent while the S&P 500 jumped more than one percent.
But traders clashed over whether investors should buy into a rally sparked by the Axios report, which was later followed by similar reporting from Reuters and Bloomberg.
“These fake timed peace deal reports by Axios with the selling and buying that accompanies them, followed by the president then doing the inverse and Iran saying it’s a lie has been happening for weeks now,” one user wrote on X.
“I’ve never seen such in your face insider trading. Market is a casino,” they added.
Others, however, said that investors should buy into the leaked reports of a deal. Trump has long heralded the stock market as a sign of his success.
‘Axios pump?’
One person shared a meme on X with a mother and her children in a poverty-stricken kitchen backdrop:
“Mom, how did we get so poor?” the children ask.
“Your dad fought Taco and shorted into the daily Axios pump,” the mother replied, using an acronym to describe Trump’s pattern of reversing policy decisions that cause equity prices to go down. Taco was coined by a Financial Times columnist for “Trump Always Chicken’s Out”.
Axios reported previously that Iran and the US were inching closer to a nuclear deal just before the US and Israel attacked the Islamic Republic on 28 February.
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However, the news site has also published reports that closely tracked with the Trump administration’s diplomacy. On 5 April, it reported that the two countries were making a push for a 45-day ceasefire. On 7 April, Iran and the US agreed to a two-week truce that has since been extended.
Some noted that the reports of de-escalation appeared to coincide with rising 10-year bond yields.
“Professor, don’t you find it curious that a new US-Iran peace deal leaks almost every time the 10 [year] UST [US Treasury] yield breaks 4.4 percent on the upside?” Luke Gromen, the founder of FFTT, LLC, an economic research firm focused on global macro trends, wrote on X.
And replying to the rhetorical question, he said: “Actually, if I think about it, I don’t find it curious at all.”
Rising bond yields make US government borrowing more expensive and filter down into consumer loans, such as mortgages. Bond yields rise when prices fall.
Yields have spiked amid the war on Iran due to concerns that rising oil prices will drive inflation.
