Odds the U.S. refrains from striking Iran before the midterms rebound to likely

Expectations that the United States will refrain from striking Iran before the Nov. 3 midterms rebounded to likely late Thursday, erasing a second sharp drop within hours. No reported news has explained either the plunge or the recovery, and the reason for the swings is not clear.

Bets had been all but certain on Tuesday and Wednesday. They began to slip on Thursday afternoon, then collapsed to a toss-up that evening. They climbed back to likely, fell to a toss-up again, and then rose a second time. The latest climb recovered all of that second drop, and it too took only hours.

The rebound leaves confidence still short of its peak. A week of steady gains from Oct. 26 had carried bets to their highest level on Wednesday. Traders now see a quiet run-up to the election as likely rather than all but certain. A similar plunge and rebound came on Monday, Oct. 19, also without a clear explanation, and a slide followed on Oct. 21.

The backdrop is tense. A Pakistan-mediated ceasefire this year was followed by exchanges of strikes, and a June interim agreement collapsed within weeks. On Oct. 8, President Trump said the United States would not resume strikes before the midterms. The Associated Press reported on Wednesday that U.S. officials had warned regional allies to prepare for possible military action after the election, though Trump had made no final decision.

On Thursday, Sen. Chris Murphy said he had been briefed on U.S. plans for renewed operations. Axios reported that Adm. Brad Cooper, the top U.S. commander in the Middle East, had briefed Trump on the Iran war and naval blockade, and that Qatar-led mediators were trying to restart negotiations. None of these reports establishes what caused the latest swings, so they are background rather than an explanation.

The outcome depends on what the U.S. actually does. A qualifying strike would be an American air strike or surface-to-surface missile strike that directly hits Iranian land or inland waters before 11:59 p.m. Eastern time on Nov. 3. Warnings, plans, authorizations, intercepted missiles, ground incursions, cyber operations and naval gunfire do not count.

The next few days will test those expectations. Mediators are working to restart talks, and the AP reports Trump has not decided whether to order new strikes.