Oil surged, and stocks and gold slumped on US-Iran final deal suspense
·
But despite all the rhetoric, both Iran and the US
are meeting in Switzerland along with mediator Pakistan, while Israel agrees to
a Lebanese ceasefire.
·
Although Iran ‘confirmed’ the SOH closure again,
the US Navy denied it, stressing the SOH is now under US control, not Iran's.
·
Overall, the 60-day (extendable) negotiation
process may not be smooth due to the respective domestic political/election
compulsions of Israel, the US, and hardline elements within Iran.
·
Although Iran may agree to ‘destroy’ the so-called
‘nuclear dust’ in the presence of the IAEA/US/China, it may not agree to
‘surrender the SOH nuclear leverage’ to the US.
·
Crude oil (WTI) may not fall below 71.00-70.00 if
the US-Iran final negotiation process is complicated and the SOH uncertainty lingers.
Wall Street futures and gold slumped on Wednesday,
June 17, 2026, on a hawkish hold by the Fed under new Chair Warsh and
uncertainty over the US-Iran MOU text. Although US stocks recovered partially on
tech on Thursday, hoping the Fed will hold in 2026 & Iran MOU clarification boosts them, they again slumped early Friday as the war of words between US VP Vance
and Israel's political/military leadership intensified. Moreover, Israel
launched an attack on Lebanon early Friday contrary to the letter & spirit
of the just-signed MOU. Iran has now postponed the 1st physical
& direct meeting with the US at Geneva (Switzerland), post the electronic
signing of the Islamabad MOU. But as of early June 20 (US), Iran’s FM Araghchi
& his team are slated to visit Switzerland, accompanied by Pakistan’s
interior minister, to meet the US delegation led by VP Vance and Trump’s
special envoy Witkoff.
As per the latest report early Saturday (US), June
20, Iran’s Supreme Military Command may have closed the Strait of Hormuz (SOH)
again as a pressure tactic and to protest against continued Israeli attacks on
Hezbollah in Southern Lebanon (despite an agreed ceasefire between the two).
Iran’s IRGC accused the US of ‘clear breach of trust and violation of its
commitment’ under Article 1 of the Islamabad MOU. Although the IRGC announced
an ‘immediate’ closure of the SOH on early US Saturday, June 20, the US naval/military
source confirmed no such visible action by the IRGC. The US CENCOM also
stressed Iran does not control the SOH currently, and the US military is
monitoring the SOH situation to ensure it stays open as per the MOU.
Meanwhile, the Israeli PM, defense minister, and chief
of the army also ordered the IDF to maintain a complete ceasefire in Southern
Lebanon, while the IDF will not withdraw from Southern Lebanon immediately. Hezbollah
is against the IDF/Israel’s expansion into Lebanese soil.
A preliminary US-Iran Memorandum of Understanding
(MOU), often called the Islamabad Memorandum, was signed on or around June 17,
2026 (with reports of electronic or formal signing by Trump during), marking a
cease-fire in a recent ~110-day conflict. President Trump signed it (reportedly
at the Palace of Versailles during/after G7 events in France), alongside
Iranian President Masoud Pezeshkian. Pakistan played a key mediating role.
Key
Elements of the 14-Point US-Iran MOU
This is a framework agreement, not a final
comprehensive deal. It triggers an immediate/permanent ceasefire and a 60-day
negotiating window (extendable by mutual agreement) for a fuller accord,
expected to address nuclear issues, sanctions, and more. Core points include:
·
Immediate ceasefire: Termination of military operations on all fronts
(including Lebanon). Both sides respect sovereignty and non-interference.
·
Strait of Hormuz: Iran ensures safe, toll-free passage for
commercial vessels (initially for 60 days). The US lifts its naval blockade
(immediately starting, fully within 30 days). This has already led to resumed
shipping and falling oil prices.
·
Economic measures: The US works toward terminating sanctions, releasing
frozen Iranian assets (~$24B mentioned in some reports), and establishing a
$300B+ reconstruction/economic development fund involving the US and GCC (Gulf)
regional partners.
·
Nuclear and other issues: Iran commits not to procure/develop nuclear
weapons. Further talks on Iran's nuclear program (including uranium stockpiles,
enrichment, verification/IAEA access) with side understandings or
"gentlemen's agreements" reported on limits and compliance.
·
Implementation: Mechanisms for monitoring; both sides can walk
away if needed, but the US has warned of resuming action if Iran doesn't
comply. Trump has framed it as potentially a "home run" if Iran
follows through.
The fragile US-Iran Memorandum of Understanding
(MOU), signed around June 17-18, 2026, and dubbed the Islamabad Memorandum,
initially promised a swift de-escalation in the Middle East following a roughly
110-day conflict. Mediated by Pakistan and signed by President Donald Trump and
Iranian President Pezeshkian, the 14-point framework delivered an immediate
ceasefire, the reopening of the Strait of Hormuz to toll-free commercial
shipping for an initial 60 days, and the phased lifting of a US naval blockade.
It also initiated a performance-based sanctions relief process and a 60-day
window for comprehensive negotiations on Iran's nuclear program, frozen assets,
and regional security.
The
US-Iran MOU: Structure and Initial Promise
The MOU represents a pragmatic, interim framework
rather than a comprehensive treaty. Key elements include the following:
· Immediate and Permanent Ceasefire: Operations must cease on all fronts, explicitly
including Lebanon. Both parties commit to sovereignty and non-interference.
·
Strait of Hormuz: Iran guarantees toll-free passage for commercial
vessels (initial 60 days); the US lifts its blockade fully within 30 days. This
chokepoint, handling ~20% of global oil and gas, was a critical flashpoint.
·
Economic Relief: Phased sanctions waivers, release of frozen
Iranian assets (estimates around $24 billion), and support for a $300+ billion
regional (GCC) reconstruction fund.
·
Nuclear Commitments: Iran pledges no pursuit of nuclear weapons; future
talks address stockpiles (via down-blending under IAEA oversight), enrichment
limits, and verification. Side "gentleman's agreements" reportedly
supplement the public text.
·
60-Day Timeline: Negotiations for a final deal, extendable by
mutual consent, with technical teams expected in neutral venues like
Switzerland.
The US-Iran MOU: Core Provisions and Strategic
Context (US version)
The MOU is explicitly a
preliminary framework agreement, not a final comprehensive deal. It establishes
immediate de-escalation measures while deferring complex issues to negotiations
within a 60-day window (extendable by mutual consent). Key elements include the
following:
·
Immediate
and Permanent Ceasefire: Termination of all military operations on every
front, with explicit reference to Lebanon. Both parties commit to respecting
sovereignty and refraining from interference.
·
Strait
of Hormuz: Iran guarantees safe, toll-free passage for commercial vessels for an
initial 60 days. The US begins lifting its naval blockade immediately, with
full removal within 30 days. This critical waterway, responsible for
approximately 20% of global oil and gas transit, had been a major flashpoint.
·
Economic
and Sanctions Measures: The US commits to working toward terminating
sanctions on a performance basis. This includes the potential release of frozen
Iranian assets (estimated at around $24 billion) and support for a broader $300
billion+ reconstruction and economic development fund involving the US and GCC
partners.
·
Nuclear
Commitments: Iran pledges not to procure or develop nuclear weapons. Subsequent talks
will address highly enriched uranium stockpiles (with a “minimum methodology”
for down-blending under IAEA supervision), enrichment limits, verification
mechanisms, and expanded IAEA access. Side “gentleman’s agreements” reportedly
supplement the written text.
·
Implementation
and Monitoring: Provisions for oversight mechanisms, with both sides retaining the right
to withdraw. The US has repeatedly warned of resuming military action in case
of Iranian non-compliance. President Trump described the potential outcome as a
“home run” if Iran adheres to the terms.
Differences between draft and final versions
refined US priorities, particularly on nuclear stockpile handling and
explicit “no charge” language for Hormuz passage. While US and Iranian public
texts largely converge, interpretations diverge on the pace of sanctions
relief, long-term Hormuz arrangements, and the applicability of the Lebanon
ceasefire.
Drafts
vs. Final/Official Text
Multiple leaked or preliminary drafts circulated
before the official signing (around June 17, 2026). The final version
released/dictated by US officials (and largely matched by Iran's published
text) includes refinements for clarity and US priorities:
·
Nuclear Stockpile Handling: The final text adds specific language on a
“minimum methodology” for neutralizing Iran’s highly enriched uranium stockpile—down-blending
near-weapons-grade material with lower-grade material under IAEA supervision.
Earlier drafts lacked this detail or were vaguer.
·
Strait of Hormuz Passage: The Final text explicitly states Iran allows
commercial vessels “with no charge, for 60 days only.” Some drafts omitted the
“no charge” or time limit details.
·
Overall Tone and Commitments: The final is described as a concise framework
(roughly 1-2 pages) emphasizing performance-based relief, immediate/permanent
ceasefire (including Lebanon), blockade lift (full within 30 days), and a
60-day (extendable) negotiating window for a comprehensive deal. Drafts had
similar points but less precise wording on verification, sovereignty, and
non-interference.
US officials have stressed it is not a final
binding deal—either side can walk away—and includes side understandings or
"gentlemen's agreements.”
US
vs. Iranian Versions/Interpretations
Both sides released or described largely converging
14-point texts, but with differences in emphasis, sequencing, and spin:
·
Sanctions Relief & Assets: Iran emphasized quicker/immediate release of
frozen assets (~$24-25B) and broader sanctions termination upon signing. The US
frames relief as phased, performance-based, and tied to compliance (e.g., no
full unblocking until actions are taken).
·
Hormuz & Blockade: The Trump/US side highlighted the “permanently
toll-free” long-term intent. Iran referenced possible “fees” (not tolls) for
services and focused on the immediate lifting of the naval blockade.
·
Lebanon & Ceasefire: Both agree on ending operations “on all fronts,
including Lebanon,” but Israel (not a party) disputes full applicability, and
interpretations differ on proxies and withdrawals.
·
Nuclear: Shared commitment against developing/procuring
nuclear weapons and future talks on enrichment/stockpiles. Iran highlighted allowances for dilution in-country; the US stressed
verification and no concessions on core issues yet.
·
Economic Fund: Both refer to a $300B+ reconstruction/development
plan with regional partners, but details on timing/funding triggers vary in
emphasis.
Markets reacted with immediate relief. Brent crude, which had
spiked above $118 per barrel amid the roughly 110-day conflict, plummeted
toward the $74 range as shipping resumed and supply fears eased. Equities
rallied, with the Dow Jones, S&P 500, and Nasdaq posting gains fueled by
expectations of lower energy costs and reduced inflationary pressure. However,
this optimism proved short-lived. By June 19, 2026, renewed geopolitical
tensions—particularly Israeli military actions in southern Lebanon, Iran’s cancellation
of planned direct talks in Geneva, and a sharp public exchange between US Vice
President JD Vance and Israeli far-right leaders—triggered a sharp reversal.
Oil prices surged once more, stock futures slumped, and gold experienced
renewed volatility as a safe-haven asset amid uncertainty.
Fragility
Exposed: Israel-Lebanon/Hezbollah Clashes
The MOU's weakness lies in its bilateral nature.
Israel, not a signatory, continues operations against Hezbollah in southern
Lebanon, viewing them as essential for security. Iranian officials cited these
strikes—described as a "wave of deadly airstrikes"—as violations of
the ceasefire, leading to the postponement of Swiss talks and Iran's
non-participation in early delegations.
US
frustration boiled over publicly. Vice President Vance criticized Israeli actions as "not
acceptable" and disruptive, singling out far-right ministers Ben-Gvir and Smotrich.
Vance reminded critics of US military aid (roughly two-thirds of recent
defensive systems) and Trump's unique sympathy toward Israel, warning,
"You're a country of nine million people. You can’t just kill your way out
of solving every single national security problem." He urged restraint to
avoid isolating Israel's key ally.
The signing of the
US-Iran Memorandum of Understanding (MOU), informally known as the Islamabad
Memorandum, on or around June 17-18, 2026, initially appeared to mark a turning
point in one of the most intense Middle East conflicts in recent years. Mediated
primarily by Pakistan, with additional facilitation from Qatar, the agreement
was electronically and formally executed between US President Donald Trump and
Iranian President Masoud Pezeshkian. Reports indicate Trump signed during or
after G7-related events, possibly at the Palace of Versailles in France.
This 14-point framework
aimed to deliver an immediate and permanent ceasefire across all
fronts—including the volatile Lebanon theater—reopen the critical Strait of
Hormuz to commercial shipping, initiate performance-based sanctions relief, and
establish a 60-day negotiating window for a more comprehensive accord
addressing Iran’s nuclear program, frozen assets, and regional security
concerns.
Israel-Lebanon/Hezbollah Clashes and Diplomatic
Fallout
The MOU’s bilateral
nature has proven its greatest vulnerability. Israel, not a signatory, launched
airstrikes in southern Lebanon early on June 19, actions Iranian officials
described as contrary to the “letter and spirit” of the agreement. In response,
Iran postponed its delegation to the first planned physical/direct talks in
Geneva (or nearby Bürgenstock), citing unmet conditions related to clauses on
ceasefire and non-interference.
US officials expressed
strong frustration. Vice President JD Vance delivered pointed criticism during
White House briefings, describing Israeli operations as “not acceptable” and
disruptive to negotiations. He singled out far-right ministers Itamar Ben-Gvir
and Bezalel Smotrich, reminding them of substantial US military aid
(approximately two-thirds of recent defensive systems) and Trump’s position as
Israel’s most sympathetic international leader. Vance warned, "If I were
in the cabinet of the Israeli government, I might not be attacking the only
powerful ally that I have anywhere left in the entire world,” and posed a
practical challenge: “You’re a country of nine million people. You can’t just
kill your way out of solving every single national security problem.”
Ben-Gvir responded
defiantly: “Anyone who supports us will benefit; anyone who abandons us will
suffer, so don’t threaten us.” This public exchange highlights internal
pressures within Netanyahu’s coalition and divergent priorities—US emphasis on
de-escalation and oil market stability versus Israeli focus on neutralizing
Hezbollah threats.
President Trump, in
statements and a phone interview with NBC News on June 19, urged Israeli
officials to support a ceasefire with Hezbollah, describing it as “a positive”
and “little icing on the cake” for broader diplomacy. He stressed a “complete
ceasefire on all fronts, including Lebanon, Hezbollah, and Israel,” while
defending the deal as pragmatic and beneficial to US interests.
Later on June 19, reports
emerged of Israel and Hezbollah agreeing to a renewed ceasefire in Lebanon
starting at 4 pm local time, brokered with US and Qatari involvement. Despite
this, tensions persist, with Iran insisting the US must ensure Israeli
compliance and framing Lebanon as inseparable from the broader agreement.
Trump and Vance Statements: Defending the Deal
Trump has been vocal in
defending the MOU. Key remarks include:
·
Framing the agreement as evidence of Iranian
weakness: “We didn’t meet out of desperation; Iran did. They are FINISHED!”
·
Highlighting military degradation: “The war has
diminished Iran! It doesn’t, any longer, have an Air Force, a Navy, antiaircraft
equipment, radar, or practically anything else...”
·
Rejecting direct funding: “We’ll play out the 60
days. They get no money, not ten cents!”
·
Boasting strategic success while cautioning against
prolonged conflict that could trigger an economic crisis, referencing his desire
to avoid becoming “the late, great Herbert Hoover.”
·
In an Axios interview, Trump emphasized US dominance
and his unique relationship with Netanyahu, stating he keeps the Israeli leader
“a little bit sane” and that “If it weren't for me, Israel would not exist
today.”
Vice President Vance
reinforced performance-based elements: relief can be “dialed up and dialed
down” depending on Iranian conduct. He acknowledged the pragmatic realities of
diplomacy (“Sometimes you deal with very not nice people”) while stressing that
there would be no direct US taxpayer dollars for reconstruction.
Latest Developments and Implementation Challenges
(as of Late June 19)
· Iran’s Foreign Ministry confirmed the Switzerland
meeting postponement until “conditions are met,” referencing specific MOU
clauses on ceasefires. Consultations continue via mediators.
·
Iranian state media asserted continued control over
Hormuz traffic through permits and service fees post-60 days, while denying
closure rumors.
· US envoy Steve Witkoff is heading to Switzerland,
with Jared Kushner already present, signaling potential acceleration of talks.
·
US intelligence has reportedly warned that Netanyahu
may take steps to undermine the deal due to domestic pressures.
· Iran’s Deputy Foreign Minister emphasized
step-by-step progress conditional on Israeli adherence and US enforcement.
The 60-day timeline,
starting around June 18, faces early tests. Technical negotiations on nuclear
issues, asset releases, and verification remain pending. While Hormuz flows
have partially resumed, full implementation depends on resolving the Lebanon impasse
and building trust. Broader risks include Iranian hardliner resistance, US
domestic politics, and potential IRGC calls for stronger responses. Analysts
note the MOU buys critical time but lacks robust enforcement mechanisms against
third-party spoilers.
Trump
and JD Vance made several public statements on June 18-20, 2026, primarily
defending the US-Iran MOU while addressing criticism, implementation, and
tensions with Israel.
Key
Trump Comments
·
Signed and Strong Deal: Trump confirmed signing the MOU (reported at
Versailles) and called it a major achievement, framing it as potentially an
"unconditional surrender" by Iran in some contexts. He emphasized it
ends hostilities, reopens the Strait of Hormuz (with toll-free passage), and
includes performance-based sanctions relief.
·
Criticism of Opponents: He lashed out at critics (including within his
party and Israel), saying the deal prevents prolonged conflict and economic
damage (e.g., oil prices). "These fools who think I haven't been tough
enough on Iran..." He warned of resuming strikes if Iran violates the terms.
·
On Israel/Lebanon: Trump stressed a "complete ceasefire on all
fronts, including Lebanon, Hezbollah, and Israel." He expressed
frustration with actions disrupting talks and encouraged regional parties to
support negotiations.
·
Economic/Implementation: Denied large direct US payments/funds to Iran as
"fake news"; relief is merit-based.
·
The
highlighted US is not funding reconstruction but supporting broader efforts.
Trump portrayed the deal as pragmatic, better than
past ones (e.g., JCPOA), and beneficial for US interests, while keeping
military options open.
·
We
didn’t meet out of desperation; Iran did. They are FINISHED! We’ll play out the
60 days. They get no money, not ten cents!
·
The
war has diminished Iran. It doesn’t, any longer, have an Air Force, a Navy, anti-aircraft
equipment, radar, or practically anything else, and yet the Democrats say that
Iran is better off now than it was four months ago. Can you imagine getting
away with that??? How stupid can some people be???
Trump
said he urged Israel to agree to a Lebanon ceasefire.
On Friday, June 19, Trump said he spoke with
Israeli officials and urged them to agree to a ceasefire with Hezbollah,
welcoming a truce that could remove a major obstacle to broader diplomacy with Iran.
In a phone interview with NBC News, Trump said he had asked Israeli officials
to support a ceasefire with the Iran-backed Lebanese group. He declined to say
whether he had spoken directly with Israeli PM Netanyahu. Trump described the
ceasefire as "a positive" and called it "a little icing on the
cake." The Lebanon truce could therefore remove one of the key points of
contention surrounding implementation of the recently signed US-Iran memorandum
of understanding and the launch of broader negotiations between Washington and
Tehran.
On
June 20, Trump declared the SOH is and will be under sole US control
irrespective of the negotiation outcome with Iran, and Iran can’t close it or impose any tolls; the US
will collect ‘service fees’ for rendering its security & escort service to
the rest of the world: There will be NO
TOLLS in the Hormuz Strait for 60 days during the cease-fire period, and there
will be NO TOLLS after the 60 days have expired, unless they are imposed by and
for the United States of America should the deal not be completed, for services
rendered as the Guardian Angel to the countries of the Middle East for purposes
of both past, present, and future reimbursement of costs. Thank you for your
attention to this matter!!! President DJT
Key
Vance Comments (focused on Israel)
Vance was more vocal in direct rebukes during White
House briefings:
·
Blunt Warning to Israel: Strongly criticized Israeli officials (and
operations in Lebanon) for opposing the deal and continuing strikes. "If I
were in the cabinet of the Israeli government, I might not be attacking the
only powerful ally that I have anywhere left in the entire world." He
noted Trump as Israel's most sympathetic leader globally and highlighted US aid
(e.g., two-thirds of defensive weapons from American taxpayers).
·
Lebanon/Regional Peace: Called ongoing Israeli actions in Lebanon
"not acceptable" and disruptive to negotiations. Urged compliance
with ceasefire terms (including for Hezbollah); emphasized the deal as a
"win-win" for regional stability.
·
Deal Defense: Confirmed "gentlemen's agreements" (some
written) with Iran and stressed performance-based relief and the 60-day
negotiating window; Noted talks in Switzerland are postponed (his trip delayed).
·
Tone: Direct and frustrated, warning Israel against undermining its key ally
amid broader isolation concerns.
Vance
says the US can ‘dial down’ Iran relief if Tehran fails to comply.
·
The
Iran MoU lets Washington dial up and dial down relief depending on Tehran’s
conduct.
·
There
would be “no American tax dollars, even if Iran complies, but sanctions relief
and other benefits could increase if Iran stops funding terrorism and accepts
long-term inspections.
·
It
would not be uncomfortable to stand alongside Iran’s parliament speaker
Ghalibaf (despite questions about Ghalibaf’s role in the suppression of Iranian
protesters).
· Sometimes
you deal with very nice people. Sometimes you deal with very unpleasant people—international
diplomacy often requires dealing with all kinds of people.
These comments reflect US efforts to enforce the
MOU amid Israeli skepticism/strikes and domestic pushback. Vance's Israel
remarks drew significant attention for their sharpness.
Vance's
Context and Criticism
Vance named Ben-Gvir and Finance Minister Bezalel
Smotrich in interviews and briefings (June 18, 2026), accusing them of
"very personally" attacking Trump and the deal. Key points from
Vance:
·
Trump
as Israel's only sympathetic ally: "Donald J. Trump is the only head of
state in the entire world who’s sympathetic to the nation of Israel at this
moment."
·
US
support reminder: Highlighted that two-thirds of recent Israeli defensive
weapons came from American taxpayers.
· Practical
challenge: "What is your exact proposal? You’re a country of nine million
people. You can’t just kill your way out of solving every single national
security problem."
·
Urged
Israel not to undermine its key ally amid international isolation.
Vance distinguished Netanyahu (who has been more
measured) from these far-right ministers.
Ben-Gvir
rebuked Vance sharply:
"Anyone who supports us will benefit; anyone who abandons us will suffer,
so don't threaten us." This exchange underscores coalition pressures on
Israeli Prime Minister Netanyahu and differing threat perceptions—a US focus on
de-escalation and economic stability versus Israeli demands for Hezbollah's
neutralization.
As of June 19, the Hormuz ceasefire holds better,
with some shipping resuming and oil flows partially restored. However, Lebanon's
volatility has stalled broader progress, testing the 60-day clock (roughly
ending mid-August 2026). Technical talks are delayed; Vance/Iran FM’s
Switzerland trip is postponed for the weekend.
Market
Reactions: Oil Surges, Stocks Slide, Gold Volatile
The reversal was swift. Early relief sent oil
tumbling, but renewed doubts drove a surge:
·
Oil:
Brent crude, which had fallen to around $78-80/bbl post-signing, rebounded amid
uncertainty. Reports place it climbing toward $79-85+ levels on June 19,
reflecting fears of renewed Hormuz risks or prolonged disruption. WTI followed
suit. Energy stocks initially suffered on lower prices but stabilized with the
uptick.
·
Stocks:
Global indices gave back gains. US futures and Asian markets turned lower as
risk appetite faded. Sectors sensitive to energy costs (airlines, consumer
discretionary) retreated, while defense and energy names showed mixed
resilience. Volatility indices ticked up.
·
Gold:
As a safe haven, gold initially benefited from tensions but slid on broader
risk-off dynamics and dollar movements tied to Fed expectations. It reflected
hedging against geopolitical flare-ups without a full-blown crisis.
Broader context includes lingering inflation
concerns from prior disruptions, with US gas prices still elevated despite
partial relief as the MOU buys time but lacks enforcement teeth against
spoilers like Israel-Hezbollah dynamics. The 60-day window offers an opportunity for
incremental progress (like IAEA access and asset tranches) but risks repeated
violations derailing it. Performance-based relief gives the US leverage, yet
domestic US politics, Iranian hardliners, and Israeli security imperatives
complicate execution.
The main differences in the US-Iran MOU (Islamabad memorandum)
revolve around drafts vs. the final/official text and variations in how the US
and Iran publicly frame or interpret the same 14-point framework.
Markets
responded with classic volatility: oil prices tumbled sharply in mid-June as Hormuz traffic resumed and
global supply fears eased, while equities rallied on expectations of lower
energy costs and reduced inflationary pressures. However, by June 19, 2026, the
narrative reversed. Reports of continued Israeli airstrikes in southern
Lebanon, Iran's decision to delay nuclear talks in Switzerland, and public
recriminations between US Vice President JD Vance and Israeli far-right
ministers triggered a sharp market correction. Brent crude surged, major stock
indices slid, and safe-haven gold experienced volatility amid the uncertainty. Initial
market euphoria was pronounced. On June 15-18, Brent crude dropped significantly
(reaching lows near $74 per barrel from prior highs above $118 amid the
conflict), fueling rallies in equities. The Dow hit records; the S&P 500
and Nasdaq climbed on lower energy costs, benefiting airlines, consumer stocks,
and broader growth expectations.
Conclusions
After many back-and-forths for weeks, the Iran deal
MOU may be a reality, but it is still fragile amid claims and counterclaims by both
the US and Iran to satisfy respective domestic political compulsions, despite
Trump saying the Iran issue is now over (in the rearview mirror) and he will
now focus on other issues, including Cuba.
Overall, apart from the nuclear issue, SOH control
may be another issue that may hamper permanent peace between the US/Israel and Iran.
Trump’s body language may be showing that he is very happy with the present
form of the Iran MOU, but in reality, Iran may not agree to US control over the
SOH and any transfer of the ‘nuclear dust’ (HEUs) out of the country, even to a
trusted ally like China.
Both the Trump/US and Iran are looking for a face-saving exit from this
war of attrition. For Trump, the domestic political compulsion may be higher
ahead of the midterm election (Nov '26) amid his plunging approval rate. For
Iran, it’s facing economic repression and thus may not afford another all-out
war with the US. For Israel’s PM Netanyahu (BB), his warmongering stance with
Iran/Hezbollah proxies may help him politically in the forthcoming general
election (Sep-Oct '26). But Trump may have the ultimate control over BB
(Netanyahu), despite any story about Epstein’s file with Mossad.
The worst of the Iran war may be over, including
the recent skirmishes between Iran and Israel/the US. Trump will not allow an
all-out Iran war during the FIFA World Cup. He will ensure no major escalation.
But after the World Cup event in the US and the present MOU time limit of 60
days, Trump may also launch a major surgical strike on Iran around
September-October (after the expected 60-day ceasefire and ahead of the
November US midterm election) to retrieve the so-called ‘nuclear dust' (HEUs)
and declare victory (if the negotiation fails). Trump may also attempt to
occupy Iran’s oil depot at Kharg Island as the ‘end game.'
Trump is looking for a face-saving exit from his
Iran war mess before the midterm US election. Trump is not happy with the US mainstream
media ─ still ‘refusing’ to acknowledge the ‘massive US military victory’ over Iran,
with the destruction of the navy, military, and air force, with only around 20-25% of
missiles left. Thus, Trump has to prove his Iran war victory for the mainstream
US media by removing the ‘nuclear dust’ (HEUs) either through negotiations or
through a military/surgical action.
Bottom
line: summary.
Looking ahead, there may
be many issues over the US-Iran final peace deal due to not only Israel but
also the US & Iran, both for their respective domestic political
compulsions. The US-Iran final deal & oil volatility, and Fed policy
uncertainty may continue to affect both sides of the Atlantic and also the Pacific.
Trump is now frustrated;
despite the near destruction of Iran’s military, as per US mainstream media,
Democrats, and even some of his own Republicans are criticizing him for the Iran
war fun/excursion. No one is ready to digest Trump’s nonsensical narrative of
Iran’s suspected nukes—being ready to implode on Israel, Europe, the US, and
virtually the rest of the world. Almost all of the US media & politicians
are maintaining that the SOH was already open for free traffic even before the
Iran war, so what is the outcome of such a costly and needless war, costing
billions of dollars and at least 14 US soldiers' lives?
Thus, Trump is now
planning to occupy/fully control the ‘prized’ and all-important Strait of
Hormuz (SOH) at any cost so that he can point out that the SOH was in the control of
Iran before the war, but is now under the control of the US. But this would be
against the letter & spirit of the Islamabad MOU signed a few days ago. And
Iran may vehemently protest. Although
Iran may agree to ‘destroy’ the so-called ‘nuclear dust’ in the presence of
IAEA/US/China, it may not agree to ‘surrender the SOH nuclear leverage’ to the
US. And if Iran withdraws from the nuclear talks, Trump may also launch a
precise surgical strike on Iran’s ‘nuclear dust’ locations to ‘destroy’ it and
also attempt to occupy Iran’s oil export hub Kharg Island to declare ‘victory’
(September-October)—just ahead of the US midterm election in Nov '26.
Valuation
matters.
Irrespective
of Trump’s bellicose policies, Fed uncertainty under new Chair Warsh, and
various macroeconomic issues, stocks are bound to be followed by earnings &
valuations. With an estimated EPS of around $305 for SPX-500 in CY26 and a
20/22-25/27 PE as base-best-case scenarios, the present range of SPX-500 should
be around 6710/6091-7614/8235; technically, SPX-500 now has to sustain over
7700 for the next leg of the rally; otherwise, sustaining below 7675, it may
correct to around 7250-6750/6370 in the coming days.
Technical
outlook: DJ-30, NQ-100, SPX-500, Gold, and Oil
Looking
ahead, whatever may be the narrative, technically Dow Future (CMP: 51900) now has to sustain over 52200 for a
further rally to 52400*-52700 in the coming days; otherwise, sustaining below
52100-51900 may cause it to fall to 51300/51000-50500/50200 and 50000/49750*-49500/48800
in the coming days.
Similarly,
NQ-100 Future (30700) now
has to sustain over 31000 for a further rally to 31200/31300-31500*/32000 and
even 32400/32500 in the coming days; otherwise, sustaining below 30600/30300,
it may fall to 30000/29500-29100/28300*-28100/27800; it may fall to 27400-27000
and 26600/26300-26000/25600 in the coming days.
Looking
at the chart, technically SPX-500 (CMP: 7557) now has to sustain over 7600/7650-7680/7700 for a further
rally to 8000-8300 in the coming days; otherwise, sustaining below 7595-7575,
SPX-500 7550/7500-7300/7200 and 7100-6900, it may fall to 6835/6700 and further
6600-6500/6450 and 6350/6300-6250/6180 and 5860-4800 in the coming days.
Looking
ahead, whatever may be the narrative, technically gold ($4157) now has to sustain over 4130 for a
recovery to 4180/4230-4295/4325 and further rally to 4400/4450-4500/4585 and
4725-4825; otherwise, sustaining below 4120, gold may again fall to 4090/4050-4050/4000*/3970
and further 3885/3715-3675/3600 and 3540/3340-3080/2770 in the coming days.
Looking
ahead, whatever may be the narrative, technically oil ($76.50) now has to sustain over 76.00-77.00 for a recovery
to 83.00-85.00 and 90.00-91.00-92.00-93.00 and 94.00-97.00-107.00-118.00 in the
coming days. On the flip side, sustaining below 76.00, oil may further fall to
74.75/73.50-71.00/70.50* and 68.50/65.00-60.00/55.00 and even 50.00-45.00 in
the coming days.
Disclaimer:
• I have no position or plan to have any position in the above-mentioned financial instruments/assets within the next 72 hours.
• I am an NSE-certified Level-2 market professional (Financial Analyst—Fundamental + Technical) and not a SEBI/SEC-registered investment advisor.
- The article is purely educational and not a proxy for any trading/investment signal/advice.
• Please always consult with your personal financial advisor and do your own due diligence before any investment/trading in the capital market.
• I am a professional analyst, signal provider, and content writer with over ten years of experience.
• All views expressed in the blog are strictly personal and may not align with any organization with which I may be associated.
• If you want to support independent & professional market analytics, you may contribute to my PayPal A/C: asisjpg@gmail.com
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