Trump and Tehran are boxed in until the midterms because Iran wants to keep U.S. gas prices high and the president can’t accept ‘surrender’

Good morning. On Fortune’s radar today:

The war with Iran won’t end until after the midterms.

Markets: Room to breathe.

Americans are convinced the job market is getting worse.

Europe is within reach of net-zero energy generation.

The price of oil boosts Democrats in the prediction markets.

“Learn to code” may no longer be good advice, Elon Musk says.

Why the war with Iran won’t end until after the midterms

The war is driving up the price of oil. The price of oil is driving up inflation. Inflation is driving up yields in the bond market. And higher bond yields are frightening stock investors, who have pulled the S&P 500 down from its all-time high in August.

So Wall Street is trying to figure out when the war will end.

It turns out that both Iran and President Donald Trump are probably locked in until after the midterm elections in November, according to analysts at Macquarie and Deutsche Bank, and Fortune’s Jordan Blum.

Tehran knows the war and high gas prices are unpopular with Americans, which is why they’re incentivized to keep the Strait of Hormuz closed. “The prospect that the conflict may endure unresolved until the U.S. midterm elections is becoming increasingly palpable,” Macquarie’s Thierry Wizman and Gareth Berry said in a note.

“As such, until then, Iran can present conditions that they believe the U.S. won't accept. Correspondingly, the U.S. can't accept tough conditions from Iran because anything that evokes a surrender by the U.S. would be politically even worse for Trump than restarting the kinetic war. Hence, Trump opts to maintain the status quo—no peace, and no war—for now, as a compromise with himself and Republicans.”

A straw poll of investors conducted by Deutsche Bank shows that 83% believe Trump is incentivized to end the war before the elections due to domestic considerations, whereas the Iranians have no such incentive. 

Here is where the 4D chess comes in. What if now is in fact the best time for Iran to seek peace?

“One point worth considering is that once the midterms have........

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