Trump threatens Iran in State of the Union

The U.S. and Iran are poised to hold further nuclear talks in the Swiss city of Geneva on Thursday, amid persistent fears about the prospect of military action in the oil-rich Middle East.

The upcoming round of negotiations over the future of Tehran’s nuclear program come as the U.S. continues to build up military forces in the region and as President Donald Trump warns of “bad things” if Iran doesn’t agree to a nuclear deal.

The U.S. president on Tuesday spoke briefly about Iran during his nearly two-hour State of the Union address but primarily focused on domestic policy and other political issues.

“We are in negotiations with them. They want to make a deal, but we haven’t heard those secret words: ‘We will never have a nuclear weapon,'” Trump said.

“My preference is to solve this problem through diplomacy. But one thing is certain, I will never allow the world’s number one sponsor of terror, which they are by far, to have a nuclear weapon.”

For some, the comments boosted expectations of an imminent diplomatic breakthrough.

Trump “basically wants the optics of a win, which is why he talks about why he’s ended eight wars. I think it’s pretty clear he hasn’t. He has helped navigate, you know, skirmishes … but he hasn’t ended these conflicts,” said George Pollack, U.S. policy analyst at Signum Global Advisors.

“For him, I think it is more about how he’s exerting U.S. strength, U.S. force and trying to make the world more peaceful but that’s more optics than it is a substantive policy,” Pollack told CNBC’s “Europe Early Edition” on Wednesday.

“And that’s why, for us, we do think this Thursday meeting will likely be a success and bring about some more diplomatic opportunities,” he added.

For others, however, the absence of a deal means the likelihood of military action appears to be both high and growing.

“President Trump’s 10-to-15-day deadline for Iran works out to a date sometime in very early March,” strategists at Dutch bank ING said in a note published Wednesday.

“This uncertainty means the market will continue to price in a large risk premium and remain sensitive to any fresh developments,” they added.

Iranian Foreign Minister Abbas Araghchi said on social media Tuesday that the country would resume talks with the U.S. in Geneva this week “with a determination to achieve a fair…