Trump notifies Congress of resumed hostilities with Iran, ending ceasefire

President Donald Trump has formally notified Congress of the resumption of hostilities with Iran, indicating an end to the interim ceasefire that had been in place since April 2026. This development follows Iranian attacks on commercial tankers in the Strait of Hormuz and subsequent U.S. airstrikes on Iranian military targets. The conflict, which began earlier this year, has escalated with recent retaliatory measures by Iran, including missile and drone strikes on U.S. bases in the Middle East. These events mark the return to full-scale combat operations under the U.S. military’s Operation Epic Fury.

Market participants appear to interpret this significant escalation as decreasing the likelihood of a US-Iran deal that includes reconstruction funding in 2026. The odds for such a deal have already seen a notable decline, with sub-market pricing reflecting a reduced probability of favorable outcomes. Current market data suggests a downward shift in support for scenarios involving reconstruction funding, with several active sub-markets experiencing a drop in YES pricing over the past week.

Key Takeaways

• Trump’s notification to Congress appears to reduce the likelihood of a US-Iran deal including reconstruction funding in 2026.
• Market dynamics suggest a significant decrease in the probability of such a deal, with YES pricing dropping across multiple sub-markets.
• The escalation of military actions in the region is consistent with scenarios where diplomatic resolutions are less likely.

What to Watch

Watch for any diplomatic efforts, such as mediation by Qatar and Pakistan, which could indicate a potential shift towards negotiation. Key indicators include statements from U.S. Chief Negotiator Mike Vance and Iranian Foreign Minister Javad Zarif, which could influence market perceptions. Further military actions or announcements of new negotiations could also impact the odds of a deal involving reconstruction funding. The situation remains fluid, and developments in the conflict will likely drive market movements in the coming days.

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Disclosure: This article was edited by Estefano Gomez. For more information on how we create and review content, see our Editorial Policy.