Markets rebound on signs of de-escalation
U.S. stocks rallied sharply Monday after President Donald Trump said the United States and Iran had held “very good and productive” talks and that planned strikes on Iranian power plants and energy infrastructure would be postponed.
The Dow Jones Industrial Average jumped 629 points, or 1.4%. The S&P 500 rose 1.2%, while the Nasdaq Composite gained 1.3%. At session highs, all three major indexes were up more than 2%, with the Dow climbing over 1,100 points at its peak.
Before Trump’s comments on Truth Social, equity futures had pointed to further losses as soaring oil prices and geopolitical uncertainty weighed on sentiment. Following the announcement, Dow futures briefly surged more than 1,000 points.
Oil prices tumble
Crude prices fell sharply after the president’s post. West Texas Intermediate futures dropped more than 7% to around $91 per barrel, while Brent crude slid more than 7% to roughly $103.
In his statement, Trump said the two nations would continue discussions throughout the week and that he had instructed the Department of War to postpone military action for five days, contingent on the success of ongoing talks. He later added that both sides wanted to “make a deal” and could speak by phone.
However, Iranian state media reported that no direct talks were taking place, causing futures to retreat from their intraday highs.
Investors weigh risks
The conflict had entered its fifth week, with tensions rising after Trump issued an ultimatum demanding the reopening of the Strait of Hormuz, a critical route for global energy shipments. Iran had threatened retaliation against U.S. infrastructure if attacks proceeded.
Market strategists cautioned that while investors welcomed signs of de-escalation, significant uncertainties remain. Questions persist about the positions of Israel, Gulf allies and Iran, as well as potential structural damage to oil and liquefied natural gas facilities that could keep energy prices elevated.
Broad-based rally
Monday’s rebound was widespread. Cyclical sectors led gains as energy prices eased. JPMorgan Chase and Morgan Stanley rose, while industrial giants Caterpillar and Deere advanced. Technology heavyweights Nvidia and Apple were also higher.
Airline stocks rallied strongly, with Delta Air Lines and United Airlines climbing as lower fuel costs improved outlooks.
Before the bounce, both the Dow and Nasdaq were nearing correction territory, down roughly 9.8% from recent record highs. The S&P 500 had fallen about 7% from its peak. Last week marked the Dow’s first four-week losing streak since 2023.
Strategists said markets had been searching for positive developments amid weeks of volatility. Whether this rebound signals a lasting turnaround will likely depend on the durability of diplomatic progress and the trajectory of oil prices in the days ahead.
