Michael Burry Says Trump's Hormuz Blockade Is 'Nothing' For Markets, Flags Risk Of 'Underestimating Most Powerful Man In The World'

• Burry called the Strait of Hormuz blockade “maximum pain on Iran” and said it would push other countries to take clearer positions alongside Washington.
• Burry said Trump’s move on Iran stems from long-standing geopolitical priorities dating back decades.
• He cautioned investors against underestimating Trump, saying the president has previously used controversy and “misdirection” as negotiating tools.

Michael Burry, the money manager made famous by “The Big Short,” downplayed the latest futures selloff after U.S. President Donald Trump ordered a blockade targeting maritime traffic to Iranian ports, saying the move was “nothing” and could be reversed at the open.

As of 12.20 a.m. ET, Nasdaq 100, S&P 500, and Dow futures were each down about 1% following the collapse of weekend negotiations between Washington and Tehran. 

On Stocktwits, retail sentiment toward the SPDR S&P 500 ETF Trust (SPY) and Invesco QQQ Trust (QQQ) was “extremely bearish” amid ‘high’ message volume, while sentiment toward the SPDR Dow Jones Industrial Average ETF Trust (DIA) remained “bearish” amid ‘low’ volumes.

“To me, this is nothing. More of the same. Possible reversal at the open,” according to comments posted on the subscriber chat on Burry’s Substack, referring to declines in E-mini S&P 500 (ESA) futures, down 0.8%, and Nasdaq-100 E-mini (NQA) futures, down 0.9% late Sunday.

Burry Backs Trump’s Hormuz Pressure Strategy

Trump said late Sunday that the U.S. would begin blockading ships entering and leaving Iranian ports after talks in Islamabad failed to reach an agreement, escalating tensions around the Strait of Hormuz, a critical route for global oil shipments.

Burry weighed in on the strategy and said, “This is maximum pain on Iran more than any other,” adding that the blockade could help draw other countries into clearer alignment with Washington’s position. “I think it is a brilliant strategy to get others involved. Pick a side, Trump says.”

He also said the decision was a broader alternative to directly targeting Iran’s key oil export infrastructure. “Trump has wanted Kharg Island for decades. But his generals or advisors told him that his marines would be sitting ducks for Iran, and instead convinced him to Embargo the whole strait as an alternative, and of course that would appeal to Trump.”

“It is actually the slightly more conservative thing to do but sounds massive and huge,” he added. Meanwhile, Burry cautioned that the blockade will take time to take effect.

Burry: Trump’s Iran Strategy Dates Back Decades

Burry said the escalation aligns with Trump’s long-standing geopolitical priorities rather than a short-term reaction to failed negotiations. “Trump has wanted to take on Iran since the ’80s,” he said, adding that as long as “the stock market supports him, and bond yields stay in check, he will keep going until he finishes what he has wanted to do for 40 years.”

He also called out the timing of the announcement. “I do not think he would have announced the blockade this weekend if last week in U.S. markets was not up 3% but down 3% with the 10-year Treasury yield kissing 4.75.”

“Trump has real long-held beliefs driving him, and there are guardrails set by the economy and especially the stock market,” he added. Burry further suggested that the negotiations themselves may have served a tactical role within the strategy. “He may have set up Vance to fail to knock him and his isolationism down a peg,” he said.

Burry Warns Against Underestimating Trump

Burry also cautioned investors against misreading the broader implications of the escalation. “Beware the risk of underestimating the most powerful man in the world,” he said. He argued that Trump has historically relied on controversies as negotiating tools.

“Trump has used misdirection better than any politician I have seen or read about,” Burry said. “He creates big controversies so that he can operate on what he really wants to do with no one watching.” 

“He congenitally says positive things about what he is doing. Hyperbole has worked for him,” Burry said. Responding to suggestions that Trump lacks long-term geopolitical convictions beyond tariffs or personal priorities, Burry pushed back on that interpretation. “This is a fallacy, but a truth for much of the United States and Europe,” he said. “Which is why I say there is risk in that belief.”

Burry Flags Nuclear And Fed Risks For Markets

Additionally, Burry placed the escalation in the context of broader nuclear-risk concerns, warning that the greater danger could come from unintended factors. “The problem is Iran is the world’s largest terror sponsor and a theocracy that treasures martyrdom. No one believes anyone rational or with a lot to lose will use nuclear weapons,” he said.

He also said investors may be underestimating the consequences of Trump’s willingness to challenge the Federal Reserve on interest rates. “Investors that doubt him on interest rates might be missing how bold he has been in pushing Powell out,” Burry said, adding that such moves “could have a huge effect on stocks and bonds.”

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