The United States and Iran appeared to be making progress toward a potential nuclear agreement in recent weeks, but sentiment among traders shifted significantly over the weekend. A recent Axios report suggested that while the two countries have agreed to a ceasefire framework, they remain far from reaching a comprehensive nuclear deal.
The report highlighted that substantial negotiations remain before any formal agreement can be finalized. As a result, traders on prediction markets such as Kalshi and Polymarket reassessed the likelihood that a deal would be completed in the near future.
New information often causes sharp market movements, especially when it involves geopolitical developments. Following the Axios report, traders quickly adjusted their positions to reflect the growing uncertainty surrounding negotiations.
Chances of a Deal
According to Kalshi traders, there is currently approximately a 54% chance that the United States and Iran will reach a nuclear agreement by the end of 2026. The probability has declined noticeably since the end of last week.
Traders can also speculate on the specific month in which a deal could be finalized. November has attracted some of the most notable trading activity, suggesting many participants believe negotiations could intensify later this year.
Even if an agreement is not completed by November, markets still indicate a meaningful chance of a deal being finalized in December. However, significant progress will be needed in the coming months for either scenario to become a reality.
Several major issues remain unresolved between the two countries. Until those concerns are addressed, prediction markets may continue to reflect uncertainty surrounding a final agreement.
The Axios Report
According to Axios, two U.S. officials and a regional source said that President Trump has not approved a proposed 60-day memorandum of understanding for the first three months of the conflict. While discussions continue, officials reportedly acknowledged that major hurdles remain.
The report also stated that “intensive negotiations” are still required before the two sides can move closer to a deal. That language appeared to cool some of the optimism that had been building in prediction markets.
One of the primary sticking points remains Iran’s nuclear ambitions. Any final agreement would require Iran to formally commit to not pursuing a nuclear weapon, an issue that has historically complicated negotiations.
This uncertainty helps explain the sharp movement in prediction markets over the weekend. On Friday, Kalshi traders assigned a 61.7% probability to a deal being reached between the United States and Iran.
By Sunday night, that figure had fallen to roughly 54%. The decline reflects a noticeable drop in market confidence over a relatively short period.
Current market pricing also presents opportunities for traders. A $10 position in a deal expected to close in 2026 would currently return approximately $18 if the deal closes successfully.
According to U.S. officials, President Trump would retain both economic and military response options if Iran fails to satisfy the conditions outlined in a future agreement. Those provisions are intended to provide leverage throughout the negotiation process.
Officials also indicated that maritime traffic through the Strait of Hormuz would be allowed to move freely under a potential deal. Iran would reportedly be required to remove all naval mines within 30 days, while commercial vessels would no longer face transit fees or interference.
In exchange, the United States would gradually ease certain naval restrictions as shipping activity normalizes.
The Trade Handle Prediction
Despite ongoing negotiations, I remain skeptical that a deal will be finalized in 2026. Iran continues to pursue a stronger nuclear position, while President Trump has shown little willingness to compromise on issues related to nuclear weapons development.
Given the current political climate, I expect prediction markets to continue trending toward a deal not being completed in 2026. The steady decline in market confidence throughout the weekend could continue if future reports emphasize the challenges that still face negotiators.