U.S. stocks rose on Monday after President Donald Trump said the U.S. and Iran had held talks and was halting attacks on Iran’s power plants and energy infrastructure, giving investors hope that a Middle East conflict that has lifted oil prices and sparked fears of a global recession is coming to an end.
The Dow Jones Industrial Average jumped by 631.06 points, or 1.38%. The S&P 500 rose 1.15%, while the Nasdaq Composite gained 1.38%. Before Trump’s comments, which he posted on Truth Social early Monday, futures were pointing to further losses for stock markets besieged by a surge in oil prices and uncertainty over the duration of the Iran conflict. But after Trump’s comments, Dow Jones futures briefly rose more than 1,000 points.
At their daily highs, the three leading US indexes rose more than 2%. The Dow reached a peak of more than 1,100 points, or 2.5%. The Nasdaq also rose 2.5%, while the S&P 500 advanced 2.2%.
Crude oil prices fell after Trump’s announcement on West Texas Intermediate futures, which fell 10.28% to $88.13 a barrel. The international reference price of Brent fell by 10.92% to close at $99.94 per barrel.
Trump’s announcement came as the war with Iran entered its fifth week, with tensions escalating over the weekend over the president’s ultimatum. Trump has threatened to attack Iran’s power plants within 48 hours if the Strait of Hormuz – a key shipping route for oil and other energy products – is not reopened, SEEbiz reports. Iran, in turn, has said it will target US infrastructure, including energy and desalination facilities in the Persian Gulf region, if the US carries out its threat.
“The market’s movement today is more about the direction I can tell the administration wants to go, but I would be very skeptical of anything being done this week to get things back to normal, given all the different complications,” Baird investment strategist Ross Mayfield told CNBC.
“What does Israel want? What does Iran want? What do our allies in the Gulf want? Is there structural damage to the LNG and crude oil export and refining facilities that, even if we end this this week, structurally changes the price of oil and gives it a higher premium?” he remarked.
Before Monday’s recovery, the Dow and Nasdaq Composite threatened to fall into correction territory – pulling back 10% – both down about 9.8% from their record highs through Friday. The S&P 500 was down 7% from its peak before Monday’s reversal.
During the session, it was a broad-based recovery, with cyclical stocks such as banks and industrials, as well as technology stocks, rising. Shares of JPMorgan Chase rose more than 1%, while shares of Morgan Stanley rose 2%. Caterpillar shares rose 2%, while Deere shares rose 1%. Shares of Nvidia and Apple rose more than 1%. Shares of airline companies such as Delta Air Lines and United Airlines rose 3% and 4%, respectively, due to falling oil prices.
