Wall Street strategists are cautioning investors against relying on President Trump to rescue markets from the Iran conflict, warning that this crisis differs fundamentally from previous trade wars or tariff disputes. The US-Israeli attack on Iran has destabilized the Middle East and threatens to deliver a new inflationary shock to the US economy by pushing up oil prices.

Unlike Trump's trade war or his threats to invade Greenland, the Iran conflict has a momentum of its own once it starts, according to Bob Elliott, chief investment officer at Unlimited. The S&P 500 ended Tuesday down 0.9% after dropping as much as 2.5% earlier, though stocks clawed back losses as trading progressed. Traders had previously relied on what became known as the TACO trade - Trump Always Chickens Out - expecting him to backtrack if markets fell too far.

This time may be different. Analysts say it would take a 10% to 15% stock drop to put significant pressure on the White House, and even then, Trump doesn't control the "off switch" with multiple powerful parties involved. The conflict carries similar risks to the Russia-Ukraine war, which pushed energy prices higher, fueled inflation, and contributed to the 2022 stock-market slide as the Fed hiked interest rates.