Trump Calls Off Strikes on Iran, Touts Imminent Peace Deal as Markets Surge

President Donald Trump abruptly canceled a wave of planned military strikes against Iran on Thursday evening, declaring that a "great settlement" to end the months-long conflict is nearing completion. The announcement marks a sudden de-escalation after days of renewed hostilities that had pushed the Middle East to the brink of full-scale war.[2][4]

Trump stated that a Memorandum of Understanding (MOU) has been brought to the "highest level of Iranian leadership and approved," suggesting a signing ceremony could take place in Europe as early as this weekend. The proposed framework would reportedly extend the current fragile ceasefire for 60 days, reopen the critical Strait of Hormuz to commercial shipping, and initiate formal negotiations regarding Iran's nuclear program.[1][2][6]

The geopolitical pivot triggered an immediate and massive relief rally across global financial markets. The Dow Jones Industrial Average surged nearly 930 points, while the S&P 500 and Nasdaq Composite posted their best single-day performances since April, rising 1.75% and 2.54% respectively.[5]

Energy markets also reacted swiftly to the prospect of unhindered transit through the Persian Gulf. Brent crude, the international oil benchmark, tumbled roughly 3.5% to drop below $90 per barrel. The Strait of Hormuz, which facilitates roughly one-fifth of the world's global energy supplies, has been effectively closed by Iranian forces since the conflict escalated in late February, driving up global inflation and shipping costs.[3][5]

Despite the optimism emanating from the Oval Office, officials in Tehran quickly pumped the brakes on the narrative of a finalized deal. Iran's Foreign Ministry spokesperson Esmaeil Baghaei stated on state television that while mediators remain active, the text is only "mostly finalized" and accused the United States of constantly changing its negotiating positions.[4][6]

Iranian state-linked media outlets went further, citing sources close to the negotiating team who explicitly denied that any initial MOU text had been approved. A central sticking point remains the sequencing of economic concessions. Tehran is reportedly demanding the immediate unfreezing of billions of dollars in assets held abroad as a precondition for the MOU, while Washington insists that sanctions relief must be tied to verifiable compliance.[7][8]

The sudden diplomatic breakthrough follows a highly volatile 48-hour window. Earlier on Thursday, Trump had threatened to hit Iran "very hard" and suggested the US military might seize total control of Kharg Island, Iran's primary oil export hub. The threats followed a series of tit-for-tat strikes, including an incident where the US military disabled a merchant vessel attempting to breach the American blockade of Iranian ports.[2][6]

According to sources familiar with the negotiations, the draft MOU requires Iran to clear any naval mines from the Strait of Hormuz and allow unrestricted shipping traffic without tolls. In exchange, the United States would lift its naval blockade on Iranian ports, which has severely restricted the Islamic Republic's economic lifelines.[1][8]

The nuclear question remains the most complex hurdle. Trump has publicly insisted that the agreement will ensure Iran "will never have a nuclear weapon," and recent edits to the draft reportedly demand that Iran's stockpile of highly enriched uranium be unearthed and destroyed. Iranian media, however, maintains that Tehran has not agreed to any nuclear concessions during this preliminary 60-day window, viewing the period strictly as a time for negotiations.[6][7]

Regional allies are watching the developments with cautious optimism. Israeli Prime Minister Benjamin Netanyahu's office confirmed that Trump had briefed him on the "emerging memorandum of understanding," though Israel emphasized it is not a party to the agreement. Gulf states, which activated air defense systems earlier in the week amid the crossfire, have heavily backed the Qatari and Pakistani mediation efforts to prevent a broader regional conflagration.[2][5]

For now, the US naval blockade remains in full effect until the transaction is officially finalized. As negotiators race to bridge the final gaps, the global economy hangs in the balance, waiting to see if the weekend will yield a historic diplomatic signing or a return to the brinkmanship that has defined the spring of 2026.[2][4]