The October 28, 2026, announcement of a mutual US-Houthi ceasefire—brokered via Oman and described by President Trump as a suspension of American strikes in exchange for an end to Houthi attacks on US vessels in the Red Sea and Bab al-Mandab Strait—forms the core driver of trader sentiment. This arrangement followed intensified US and Israeli operations against Houthi targets earlier in the period. Subsequent developments include continued Yemeni government offensives under Operation Dawn of Yemen, with hundreds of reported Houthi casualties in late October strikes across Taiz and other fronts, alongside Houthi shelling of Aden and the siege of Taiz. Diplomatic engagement, such as the October 30 Bahrain meeting between Yemen’s foreign minister and US officials on Red Sea security and arms flows, plus Houthi statements maintaining attacks on Israel, shape assessments of durability. Scheduled regional talks and any fresh shipping incidents could shift implied probabilities around continuation.