Trump signs Iran deal, ending war with 60-day peace pact

President Donald Trump signed a preliminary Iran peace deal Wednesday, wagering that ending the war would avert an "economic catastrophe" as oil fell and stocks rallied on the prospect of reopened crude flows through the Strait of Hormuz.

"I didn't want to see economic catastrophe. If you kept this going, that could have happened," Trump told reporters after the signing at the Palace of Versailles, adding that he studied how the stock market "shot up like a rocket ship" whenever peace talks advanced. "The one president I did not want to be was the late, great Herbert Hoover."

The memorandum of understanding waives US sanctions on Iran, reopens the Strait of Hormuz — which handles about 21% of global oil trade — and allows Iran to sell crude freely for 60 days while both sides negotiate a permanent agreement. Gasoline prices in the US remained above $4 a gallon as of June 15, with the Consumer Price Index running at 4.2% year-over-year and the Producer Price Index at 6.5%, according to the latest data.

The deal gives Trump a one-way exit from a conflict that dragged his approval ratings into the 30s and threatened Republican midterm prospects, but it also cedes nearly all US leverage before talks on Iran's nuclear program begin. If negotiations fail within 60 days, Trump threatened to "go back to bombing" — though the MOU itself bars both sides from the "threat or use of force."

The agreement, mediated by Pakistani Prime Minister Shehbaz Sharif, was signed after a post-G7 dinner with French President Emmanuel Macron, who called it "excellent." Trump signed a copy and sent a photo to Iranian officials.

Internal Skepticism Runs Deep

The deal drew immediate criticism from within Trump's own circle. National Security Adviser Marco Rubio and CIA Director John Ratcliffe expressed doubts about Iran's willingness to negotiate on its nuclear program, according to Axios. Former Vice President Mike Pence called the emerging agreement "appeasement" in an interview with CNN. Republican Senator Shelley Moore Capito said voters were "really feeling" the economic pain from rising gas and food prices.

Israel was not consulted before the signing. Trump said he sent a copy to Prime Minister Benjamin Netanyahu three days after it was finalized, while criticizing Israel's handling of Hezbollah. "When two drones are shot into the desert and drop harmlessly, you don't have to knock down buildings in Beirut," Trump said.

Market Calculus Drove the Decision

Trump's explanation for the deal was unusually candid about domestic political pressures. He said he monitored stock market reactions to every twist in the conflict — markets rallied on peace signals and sold off on escalation. The last time a US president faced a comparable wartime economic squeeze was during the 1973 oil embargo, when crude prices quadrupled and the S&P 500 lost 45% over 21 months.

The agreement allows Iran to keep its missile program and does not resolve the war between Israel and Hezbollah in Lebanon. A separate meeting between US Vice President JD Vance and Iranian Parliament Speaker Mohammad Bagher Ghalibaf is scheduled for Friday in Switzerland to begin the next phase of talks.

This article is for informational purposes only and does not constitute investment advice.