Global financial markets faced severe disruption on Wednesday, July 8, 2026, after U. S.
President Donald Trump declared the memorandum of understanding providing a ceasefire framework with Iran was over.
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Oil prices surged over 5 percent to $78 a barrel, while European stocks dropped 1.8 percent. The U.
S. dollar jumped and government bond yields rose, with Wall Street and Bay Street anticipating sharply lower openings.
Speaking at a NATO summit in Ankara, Turkey, Trump triggered immediate investor concerns regarding a renewed flare-up in global inflation.
Market Analysts Offer Contrasting Views
Fiona Cincotta, Senior Market Analyst at City Index in London, described the peace process as fragile.
She noted that oil prices had already fallen back to pre-war levels, suggesting the market was ahead of itself.
"Oil prices could continue to rise if we see the Strait of Hormuz close again," Cincotta added.
Derek Holt, Scotiabank's Head of Capital Markets Economics, expressed skepticism about the durability of the diplomatic framework.
He stated that the MOU was "fatally flawed from the beginning" and that the bond yield curve likely has much further to run.
Aneeka Gupta, Director of Macroeconomic Research at WisdomTree in London, called the development a "big wake-up call for the markets."
She emphasized that the removal of the Iranian oil waiver removed a key incentive for Iranian compliance.
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Gupta also noted that Trump's comments add an additional layer of risk premium, but pointed to the "TACO (Trump always chickens out) trade" as a factor.
