Look Beyond Skyrocketing Gas Prices! If a Stock Market Crash Takes Shape Under President Donald Trump, the Fed Is Likely to Be the Catalyst.

From a purely statistical standpoint, the stock market has thrived under President Donald Trump. Although volatility has been something of a theme, the ageless Dow Jones Industrial Average (DJINDICES: ^DJI), benchmark S&P 500 (SNPINDEX: ^GSPC), and tech-dependent Nasdaq Composite (NASDAQINDEX: ^IXIC) soared 57%, 70%, and 142%, respectively, during his first, non-consecutive term.

Until four weeks ago, the Dow, S&P 500, and Nasdaq Composite were delivering an encore performance in Trump’s second term. But as history teaches us, when things seem too perfect on Wall Street, they usually are.

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Since the Iran war kicked off on Feb. 28, Wall Street has been on edge. While skyrocketing gas prices have been the most direct way this Middle East conflict has, thus far, impacted the U.S., there’s a much bigger chess piece that’s yet to move: the Federal Reserve. If and when it does, there’s the potential for the Fed to upend this tech-driven bull market and trigger a stock market crash under President Trump.

On Feb. 28, U.S. and Israeli forces commenced military operations against Iran. Shortly after these missions began, Iran announced that it would virtually close the Strait of Hormuz to oil exports. On a given day, approximately 20 million barrels of liquid petroleum, representing 20% of the world’s daily needs, travel through the Strait of Hormuz, per the Energy Information Administration. This shutdown is the largest energy supply chain disruption in history.

The law of supply and demand is straightforward: When the supply of an in-demand good is constrained, the price of that good will rise until demand tapers. Since conflict began, the per-barrel price for West Texas Intermediate and Brent crude oil has ascended to the heavens — and prices at the pump have followed.

According to data from AAA, the average nationwide price for a gallon of regular gas has skyrocketed 34% over the last month to roughly $3.93 as of March 21. The parabolic climb in diesel has been even steeper, with the nationwide average coming in at about $5.21 per gallon, up 41% from the previous month.