Overview
On 18 June 2026, U.S. President Donald Trump signed a memorandum of understanding (MoU) with Iran during a state visit to France, confirming the signing at the Palace of Versailles. Iranian President Masoud Pezeshkian also signed the document, according to White House officials reported by the BBC and CBS.
Key Provisions
The MoU outlines Iran’s commitment to never develop a nuclear weapon, the reopening of the Strait of Hormuz, the lifting of U.S. sanctions on Tehran, and an immediate cessation of all hostilities, including those in Lebanon. It also establishes a $300 billion reconstruction fund for Iran, though the specific allocation of the fund was not detailed at the time of signing.
Statements and Warnings
President Trump emphasized that the agreement is not permanent and warned that the United States is prepared to resume attacks on Iran if the terms are violated. Iranian officials issued a parallel warning, and Iran cautioned that any continued Israeli aggression against Lebanon would nullify the peace deal.
Follow‑up Actions
An official signing ceremony was scheduled to take place in Switzerland on the following Friday, though it was unclear whether the event would proceed as planned. Trump met with NATO allies later in the week to explain the framework of the deal.
Negotiation Timeline
The MoU is described as a preliminary step, setting the stage for approximately two months of negotiations aimed at reaching a longer‑term agreement, with Iran’s nuclear program identified as a central focus of the upcoming talks.
Context of Ongoing Conflict
The announcement came as the U.S.–Iran conflict approached its four‑month mark, with both sides having escalated military actions in early June. Iran accused both Israel and the United States of breaching a ceasefire.
Market Reaction
Following the news, the S&P 500 index fell 1.21%, crude oil (LCOc1) dropped 1.47%, while the U.S. Dollar Index (DXY) rose 0.19%.