TL;DR

Iran is expected to deliver its formal response Thursday to a US ceasefire proposal, with sources telling CNN both sides are moving toward a memorandum of understanding. Trump declared the US has effectively "won" the conflict. Oil steadied near $101 per barrel after dropping 7.83% on Wednesday. Asian stocks surged to records overnight, and Bitcoin climbed toward $82,000 on risk-on sentiment. Traders face a binary setup: a confirmed deal extends the rally across equities, crypto, and bonds, while a breakdown sends oil back toward $110-$115 and pressures risk assets.

What Happened: Iran Ceasefire Decision Expected Thursday

Following weeks of back-and-forth between Washington and Tehran, the US presented a fresh ceasefire proposal this week. CNN reported late Wednesday that Iran is expected to respond on Thursday, with a source describing both sides as moving toward a memorandum of understanding that would formally end the conflict.

Speaking from the Oval Office, President Trump told reporters he has no fixed deadline but added, "it'll happen," and declared: "We won it very quickly." He noted that energy companies were eager to expand operations, and described Iranians as having "great pride" -- language that suggests negotiations are framing the outcome as a mutual resolution rather than a one-sided capitulation.

Earlier in the week, Defense Secretary Pete Hegseth told Congress that the absence of direct fire between US forces and Iran since an initial ceasefire was agreed on April 7 has effectively paused formal hostilities. The ceasefire has held despite isolated incidents, including attacks on the UAE that briefly pressured oil before receding. This conflict has been one of the primary drivers of oil market volatility since late February -- for earlier context on how the crisis evolved, see our coverage of Strait of Hormuz shipping risk and the initial US-Iran talks and oil reaction.

Why Markets Moved: Oil, Equities, and Crypto All Repricing

The catalyst hit markets in overlapping waves. On Wednesday, Brent crude settled $8.60 lower -- a 7.83% drop -- at $101.27 per barrel, touching levels not seen since late April. The scale of the move reflects how much elevated war risk premium had been built into energy prices since the conflict escalated in March. WTI fell in parallel.

Global equities moved sharply in the opposite direction. Japan's Nikkei 225 surged after reopening from a holiday break, with investors catching up to Wednesday's gains in US and European markets. Bloomberg reported Asian equities climbed to a record as a result. The rally was broad-based: tech stocks led, consistent with a pattern where lower oil prices reduce inflation pressure and ease the case for further monetary tightening.

Gold posted its biggest single-day advance since late March on Wednesday. Lower oil prices ease inflation fears without necessarily removing geopolitical uncertainty, and gold has functioned throughout the conflict as a hedge against both outcomes. It held those gains overnight.

In crypto, CoinDesk reported Bitcoin (BTC) climbed toward $82,000 alongside more than a 1% rise in Nasdaq futures. The move reflects a familiar dynamic in which a positive macro catalyst -- particularly one that reduces inflation risk -- tends to lift risk assets broadly, including digital assets.

Implications for Traders

Oil and energy futures traders: Thursday's response from Iran is the pivotal event. Brent at $101 still carries residual war premium above pre-conflict levels. A confirmed deal or formal memorandum could accelerate another leg lower toward the $90-$95 range as that premium unwinds. A breakdown in talks would likely reverse Wednesday's losses rapidly, with Brent potentially retesting $110-$115.

Stock and index futures traders: Equity markets have priced in significant optimism. The S&P 500 and Nasdaq have been recovering from the tariff-driven selloff earlier this year, and peace deal confirmation could add a further tailwind via lower input costs, reduced inflation risk, and potential Federal Reserve rate cut speculation. However, markets are now positioned for a positive outcome -- which leaves limited room for upside surprise and more vulnerability to a negative shock.

Crypto traders: Bitcoin near $82,000 sits at a technically meaningful zone. A confirmed ceasefire and sustained risk-on environment could build the case for a retest of prior highs. The key variable is whether dollar strength or weakness follows the deal. A softer dollar environment -- which peace and lower oil tends to support -- has historically provided a positive backdrop for BTC and ETH.

Gold traders: Gold's rally alongside equities on Wednesday suggests it is no longer acting purely as a risk-off hedge. If a ceasefire removes geopolitical uncertainty, gold could give back some gains. However, if the deal is delayed or contested, gold may continue finding buyers from multiple angles.

Potential Positives vs Negatives

Positives:

  • A formal US-Iran ceasefire removes one of the most significant macro risk overhangs of 2026.
  • Lower oil prices reduce headline inflation and ease pressure on central banks, supporting risk assets globally.
  • Strait of Hormuz reopening to full commercial traffic would ease global shipping costs and supply chain stress.
  • Equities, crypto, and bonds all benefit from reduced uncertainty and lower implied discount rates.
  • Fertilizer and food commodity prices, which surged during the conflict, could begin to normalize.

Negatives:

  • If Thursday's response is a rejection or counter-proposal, oil could spike and equity futures could sell off sharply overnight.
  • Markets appear to be pricing in a high probability of a deal, which means a breakdown carries asymmetric downside.
  • A prolonged negotiation without a clear endpoint would sustain elevated volatility in energy markets.
  • Any renewed military escalation involving Hormuz transit could send oil back above $120 quickly.
  • The terms of any deal still need to hold -- political risks on both sides could unravel a fragile agreement.

What Could Happen from Here

Base case (60% probability): Iran provides a conditional positive response Thursday, opening a path to a formal memorandum within days. Oil drifts lower toward $95-$99 Brent as war premium continues to unwind. Equities hold their gains and consolidate. Bitcoin stays in the $78,000-$84,000 range. Confirmation: Iran's official statement accepts the ceasefire framework, Pakistani and Omani mediators confirm, and Brent closes below $103.

Upside case (20% probability): Iran accepts the US proposal in full and a memorandum is signed Thursday. Oil drops below $95 intraday. Global equities extend gains with the Nikkei and S&P 500 pushing to fresh all-time highs. Bitcoin breaks above $84,000 and tests $88,000-$90,000 on a sustained risk-on wave. Confirmation: Joint US-Iran announcement, Hormuz formally reopened, WTI drops below $85.

Downside case (20% probability): Iran rejects the proposal or makes demands the US finds unacceptable. Oil spikes 5-8% in overnight futures. Equity futures reverse. VIX (a measure of implied volatility in S&P 500 options) spikes above 25. Bitcoin gives back gains toward $76,000-$78,000. Gold surges as safe-haven demand returns. Confirmation: Iranian state media announces rejection, oil breaks above $110 on a closing basis, US officials signal talks are stalled.

What to Watch Next (Next 24 Hours)

  • Iran's official response: Expected sometime Thursday. Watch Iranian state media (IRIB, PressTV), White House briefings, and wire services simultaneously. Timing relative to Asian and European market opens matters significantly.
  • Oil settlement price: Brent above $105 signals skepticism returning. Brent below $99 signals accelerating deal confidence.
  • US equity futures: Watch Nasdaq futures as the most sensitive major index to the inflation-outlook dimension of this story.
  • Bitcoin: A sustained hold above $82,000 on healthy volume signals that crypto is pricing in the base case. A drop below $78,500 overnight signals risk-off hedging re-emerging.
  • Trump statements: Any additional Oval Office or social media remarks about the deal's status will move markets before official Iranian announcements.
  • Mediator signals: Pakistan and Oman have been key intermediaries. Statements from their foreign ministries can serve as leading indicators of deal progress.

Sources

CNN Live Updates: Iran-War Ceasefire Talks | Bloomberg: Oil Steadies as Iran Assesses Fresh US Proposal | Reuters: Oil Prices Slide on US-Iran Peace Reports | Bloomberg: Asian Stocks Rise on Iran Optimism | CoinDesk: Bitcoin, Nasdaq Rally on Iran Peace Deal Hopes

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Header image source: pexels by Marnie Griffiths. License: PEXELS.