Donald Trump signed his Iran memorandum of understanding in mid-June and told the ships of the world to start their engines. A genuine peace dividend would have announced itself first in two places: the shekel and the Tel Aviv Stock Exchange. Neither is behaving like it believes him.
What the memorandum actually promises
The MoU — signed at Versailles by Trump, Iranian President Masoud Pezeshkian, and Pakistan’s prime minister as mediator — reads less like a treaty than a 60-day ceasefire with a wish list stapled to it. It reopens the Strait of Hormuz toll-free for sixty days, lifts the US naval blockade of Iranian ports, ends military operations “on all fronts” including Lebanon, and dangles a $300 billion reconstruction package alongside the termination of sanctions. On the nuclear question — the reason the war was fought — it simply freezes the status quo and defers the substance to a negotiation that has barely begun.
Trump himself stamped the expiration date on it. Pressed on whether the deal would hold, he volunteered that if Iran misbehaves, the United States goes right back to bombing. Days later he threatened to invade outright if Tehran closed Hormuz. Iran, meanwhile, is funneling traffic through a freshly invented “Persian Gulf Strait Authority” that still requires its permission to transit the waterway. This is not the architecture of a settled peace. It is a pause with a hair trigger.
What the shekel is actually doing
If the memorandum were credible, the best-performing currency in the developed world would be extending its run on the relief. It is doing the opposite. The shekel is trading near 2.96 to the dollar — still remarkably strong, up roughly 14% over the past year, and not far from the sub-2.88 levels that marked its firmest since 1993. But over the past month, into the very window when the deal came together, the shekel has weakened close to 3%. A currency that genuinely believed in a durable end to the Iran war would be ripping higher into the signing, not quietly giving ground.
What the TASE is actually doing
The equity market tells the same story from a different seat. The TA-35 sits near 4,200 and the broader TA-125 just above 4,100, both within reach of record highs after the index surged more than 50% in 2025 and tacked on another double-digit advance this year. Those are extraordinary numbers — but notice when they were made. The rally ran hottest while the missiles were still flying. In the sessions around the memorandum, the indices have flattened and slipped rather than staged the melt-up you’d expect if traders were pricing a reconstruction boom and a permanently reopened Hormuz.
The market believes the war, not the paper
Here is the resolution to the apparent paradox. Israeli markets did not rally on the prospect of a deal. They rallied on the war’s outcome. Investors bet — correctly, so far — that the campaign decisively degraded the Iranian threat, and they banked that conviction in February and March, while the fighting was at its peak. The optimism is already in the price. It was never optimism about a signature; it was optimism about a result. What remains to be priced is the memorandum’s durability, and on that the verdict is a shrug.
The political bill lands on Netanyahu
The same skepticism that is keeping the shekel and the TASE from celebrating is showing up, far more brutally, in the polls — and it is aimed squarely at Benjamin Netanyahu. Trump and JD Vance did not just hand Israel a deal its public dislikes; they spent the week publicly humiliating the prime minister who staked his career on the relationship. Trump called Netanyahu “crazy” and said he had no judgment. Vance lectured Israelis to wake up to their isolation and described Trump as the only powerful friend they have left. For a leader whose entire brand is “only I can manage Washington,” this is the worst possible optics, delivered by the very ally he built the brand around.
The numbers are unambiguous. A Channel 12 survey found just 11% of Israelis believe their country won the Iran war, more than seven in ten say they don’t trust Trump to protect their interests in it, and a majority blame Netanyahu’s own conduct for the outcome. Roughly six in ten say he shouldn’t even run. For the first time in this cycle, opposition figure Gadi Eisenkot has out-polled Netanyahu for weeks on who is best suited to lead, and the Zionist opposition bloc now out-seats the Netanyahu camp — even if it has not yet assembled a clean majority.
The tell is what Likud did with this in private. The party quietly shelved a planned campaign built around Netanyahu’s closeness to Trump — the exact playbook that worked in 2019 — because it concluded the association now costs votes rather than winning them. Netanyahu can stand at ceremonies and insist the Iranian regime has “cracked” and will “ultimately fall,” and he can claim Israel faces “no restrictions” in Lebanon. But spin does not move a poll that has already priced the disappointment. The electorate, like the currency desk and the trading floor, is discounting the rhetoric and watching the result. On all three boards, the verdict on the memorandum is the same: disbelief.
The 60-day clock
Everything that matters in this memorandum was deferred — the nuclear file, the sanctions architecture, the permanent administration of Hormuz, the future of US forces in the region — into a 60-day window that Trump has reserved the right to blow up at will. If the shekel and the TASE believed the paper, they would already be front-running the reconstruction trade and the reopening of the strait. They are not. They are pricing the single most honest line anyone has said about this deal — the one Trump said himself — that the bombs are one bad week away from falling again. The markets believe what they watched. They do not believe what was signed.