The early reports this morning suggest that the U.S. and Iran are moving closer to a one-page memorandum aimed at ending the war — or at least establishing another ceasefire framework. The agreement would reportedly serve as the foundation for more detailed nuclear negotiations going forward, including discussions surrounding future uranium enrichment limits, which was the core issue that sparked the conflict in the first place.
That said, Iranian sources continue to push back on the headlines, arguing that many of the published details reflect more of a U.S. wish list than the actual state of negotiations behind closed doors.
Still, even the perception of a path toward ending the conflict has major market implications. Most notably, it raises the likelihood that the blockade of the Strait of Hormuz could eventually be lifted, allowing oil flows to normalize. Traders are clearly pricing in that possibility. Brent crude is down roughly -9.65%, while WTI crude for both the June and July contracts is lower by about -10%, with June trading near $91.77 and July near $88.58.
The decline in energy prices comes after a sharp wartime surge. Just yesterday, AAA reported the national average gasoline price had climbed to $4.53 per gallon — the highest level since February 28.
So in many ways, markets are beginning to price a return to the pre-February 28 environment — albeit with enormous costs attached. Iran’s military leadership structure has been severely damaged, the Iranian navy has suffered significant losses, infrastructure has been hit, countless lives have been lost, and global energy prices remain elevated relative to pre-war levels. At the same time, equities are pushing higher as investors embrace the prospect of de-escalation.
If Operation Epic Fury is indeed ending, it would suggest that the next phase — Project Freedom — has officially begun, with the focus shifting from direct military engagement toward securing shipping lanes, stabilizing trade flows, and rebuilding regional economic confidence.
Politically, the administration now appears poised to transition from wartime strategy toward an economic and electoral narrative heading into November — hoping that falling oil prices, easing inflation pressures, and resilient equity markets can provide a tailwind for the GOP. That is the next war to be staged.
US stocks are sharply higher to kickstart the North American session with the Dow up 446 points, the S&P up 65 points and the Nasdaq up 420 points.
Meanwhile, in the FX market, the U.S. dollar is taking its cue from sharply lower yields and falling oil prices. The 2-year Treasury yield is down -6.6 basis points, while the 10-year yield has fallen -6.2 basis points. Against that backdrop, the greenback is under broad pressure, falling -0.60% versus the EUR, -1.09% against the JPY, and -0.58% versus the GBP.
In the video above, I take a technical look at the dollar’s decline versus the three major currency pairs — EURUSD, USDJPY, and GBPUSD — and outline the key levels shaping the near-term bias.