A landmark agreement between the United States and Iran was signed yesterday at the Palace of Versailles in Paris, with President Trump in attendance, marking a major diplomatic thaw that eases immediate Middle East tensions but leaves key issues for later talks.
Under the accord, Washington will lift a naval blockade and Tehran will take measures to reopen traffic through the Strait of Hormuz. The deal envisions a comprehensive rehabilitation package for Iran’s economy—backed by the U.S. and regional partners—potentially worth up to $300 billion. Tehran reiterated it will not pursue nuclear weapons, while the disposition of enriched material is to be negotiated in a final settlement. The signing also reflected a softening of some U.S. red lines, including on Iran’s ballistic‑missile program.
Policy and markets reacted to other major developments. The Federal Reserve held interest rates steady and said it will abandon its forward‑guidance framework, a shift that sparked a risk‑off move and a firmer dollar as markets reassessed the policy path.
In Europe, Germany’s Ifo institute published inflation expectations of 2.9% for this year and 2.7% for 2027, and left its growth forecast for 2026 at 0.8%. Separately, the Financial Times reported Brussels plans to approach Moscow about potential peace talks on Ukraine, signaling a new push for diplomacy in Europe.
Market moves were mixed: European stocks traded flat. In Asia, Japan rebounded about 1.5%, mainland Chinese equities were flat and Hong Kong fell about 1.5%. U.S. futures looked set to recover some of yesterday’s losses at the open. The dollar was broadly stable against major peers and Brent crude traded down roughly 1% near $76 a barrel.