Recent diplomatic progress, including a June 2026 memorandum of understanding between the United States and Iran aimed at ending hostilities, reopening the Strait of Hormuz, and addressing nuclear issues over a 60-day period, has reinforced trader expectations against a U.S. ground invasion before 2027. The 2026 conflict consisted primarily of U.S.-Israeli airstrikes and Iranian missile responses rather than sustained ground operations, followed by a ceasefire and ongoing mediation by Pakistan. Official statements emphasize sanctions relief, asset releases, and compliance timelines over further escalation, while the high costs of prior strikes and regional disruptions favor negotiated de-escalation. This consensus aligns with historical patterns where major powers have avoided large-scale invasions of Iran absent direct territorial threats.