Markets have been riding a scorching run of momentum, but investors may get a rude awakening when trading resumes Sunday night in New York. President Donald Trump rejected the latest peace offering related to Iran, throwing into question whether diplomatic tensions in the Middle East will ease anytime soon. The timing poses particular challenges for traders who have been betting heavily on geopolitical de-escalation.

Momentum-driven strategies have dominated recent market action, with investors piling into stocks on hopes that the Iran conflict would cool. Trump's rejection of the peace proposal threatens to shatter that narrative, potentially triggering a sharp selloff when Wall Street opens. Traders who built positions around the truce outlook could face significant losses if risk appetite evaporates overnight.

The development introduces fresh uncertainty at a delicate moment. With no clear path forward for negotiations, volatility is likely to spike as markets reprice geopolitical risk. The rejection signals a harder line on Iran, leaving investors to reassess what a prolonged standoff means for global markets and risk assets.