By Monetary Elite 
The war ended, technically. Or at least, the shooting stopped. And yet the market still does not quite know what to do with it.
On June 17, 2026, Trump and Iranian president Masoud Pezeshkian signed remotely the Islamabad Memorandum to end the war between both countries and Israel. The Strait of Hormuz, effectively closed since February, is now officially reopened to commercial traffic.
Oil prices moved higher in the early morning of the deal announcement, but pared gains as investors assessed the risk of further disruptions to crude supplies. Brent crude was up 1.4% to $73 a barrel, while WTI gained 1.7% to trade above $70.
That muted reaction in crude is the first signal that something more complicated is happening here.
What the deal actually is, versus what the market is pricing.
U.S. and Iranian officials signed a memorandum of understanding in mid-June 2026 that extended a ceasefire, reopened the Strait of Hormuz to commercial traffic, and outlined limited sanctions relief while deferring core nuclear issues.
The word deferring is doing a lot of work in that sentence. The MOU does not appear to resolve the core issues surrounding the mechanics of the Strait of Hormuz, Iranian nuclear concessions, or Iranian financial incentives and sanctions relief. Those issues are supposed to be addressed in a second phase, and plans for addressing those issues are already receiving domestic criticism in the United States, Israel, and Iran for their yet-to-be-confirmed contents.
So what the market is treating as a resolution is actually a 60-day window to negotiate the actual resolution. The framework sets a 60-day window ending around mid-August for technical negotiations on uranium enrichment limits, down-blending of existing highly enriched stockpiles under IAEA supervision, verification measures, and related sanctions.
Mid-August. That is eight weeks away. And the parties still fundamentally disagree on the core issues.
Here is the thing that matters for markets. The equity rally from ceasefire optimism has already happened. Tech stocks rebounded. A tech rally and hopes for lasting peace in the Middle East helped lift sentiment through the final days of June. Major U.S. stock indexes are ending June on a high note, with the S&P 500 and Nasdaq on track for their best quarterly performance in six years.
That is the easy trade. It is largely done.
The harder trade is the second-order stuff.
The war caused structural damage. Portions of the region’s downstream infrastructure and liquefied natural gas export capacity, including facilities at Ras Laffan, will require extensive repairs. This means even with the Strait open, global LNG supply does not snap back immediately. European energy markets remain exposed to supply disruption risk through the winter of 2026 to 2027.
Energy prices rose, especially TTF natural gas, that settled above EUR 42/MWh, reflecting the market’s recognition that the infrastructure damage is real and the recovery timeline is longer than a political announcement can fix.
That is a tailwind for U.S. LNG exporters, specifically Cheniere Energy and New Fortress Energy, whose contracted volumes look more valuable in a world where Qatar and Iran cannot reliably ramp supply back to pre-conflict levels on any near-term timeline.
The bond market is telling its own story. Interest rates at the front end of the U.S. Treasury yield curve have pushed higher in response to the prospect of a Federal Reserve rate hike as early as September. Two-year Treasury yields have increased by 85 basis points, to 4.23%, since the last day of trading before the Iran war.
What’s interesting is that the ceasefire is not unwinding that move. The Fed’s hawkishness, now confirmed by Warsh’s June meeting, is a separate and potentially longer-lasting force on rates than the Iran risk premium was. The Fed’s June projections showed median expectations for one to two rate hikes in 2026, a shift from earlier expectations for rate cuts before energy prices rose after the onset of the U.S.-Iran conflict.
Equity investors are celebrating the geopolitical resolution. Bond investors are staring at a Fed that just flipped its entire 2026 rate path from cuts to hikes. Those two stories are on a collision course.
The broadening market trend that predated the ceasefire is also worth watching carefully. The S&P 500 is just 3% off all-time highs, and there have been glimmers of strength in non-tech areas. Some of the selloff in the tech space may be related to quarter-end rebalancing by major market players such as pensions and sovereign wealth funds.
That rebalancing flow reverses at the start of Q3, which begins Tuesday. Watch whether tech leadership reasserts itself or whether the broadening into industrials, energy, and financials continues. The answer to that question determines whether the second half of 2026 looks like H1 2024 or H1 2022.
The deal is real. The uncertainty around it is equally real. Investors pricing a clean, durable resolution are probably running the wrong model. The mid-August deadline for the harder nuclear negotiation is the next inflection point that nobody is currently trading around.