What causes the ring around the Sun and Moon?

That ring is sometimes called a halo.
It is believed to be caused by the scattering of sunlight by tiny ice crystals very high in the sky. High clouds of ice crystals high in the sky are called cirrus clouds, or cirrostratus if they form a layer. These often form in front of warm fronts that bring rain.

So, a halo around the Sun or Moon is often a warning that rain may come.