The New York Stock Exchange closed higher on Monday following a sharp drop in oil prices triggered by reassuring remarks from Donald Trump about negotiations with Iran.
Both the Dow Jones and Nasdaq gained 1.38%, while the S&P 500 rose by 1.15%, marking the markets’ first upward session in nearly a week.
Earlier on Monday, Trump announced a “five-day delay” on potential strikes against Iranian energy infrastructure. These strikes had previously been threatened amid heightened tensions.
Trump reports talks Iranian personality
Later, Trump revealed that Washington and Tehran had identified “major points of agreement” during discussions with a senior Iranian figure, though not the country’s Supreme Leader, Mojtaba Khamenei.
The news prompted a significant decline in oil prices and fuelled a clear rise in stock prices across Wall Street.
Markets initially reacted with a sense of “immense relief,” according to market analyst Kevin Ford.
Elevated energy prices, exacerbated by the conflict, have posed risks to the global economy, household spending, and corporate earnings.
Iran denies any discussions with the US
Iranian officials denied the existence of ongoing discussions with the US, but this did little to dampen investor optimism.
Investors are acting pre-emptively based on perceived developments rather than verified facts, said Sam Stovall, an analyst at CFRA.
However, Stovall warned that market sentiment might reverse quickly if Trump were to contradict himself in future statements.
Market expected to keep climbing, for now
He added that, for now, indices were likely to continue their upward trajectory for at least a few more days.
Jose Torres of Interactive Brokers noted that despite the broader economic uncertainty caused by the Middle East conflict, Trump’s remarks had improved the outlook somewhat, reigniting speculative enthusiasm in the market.
Trading remains precarious as Trump alternates between threats of escalation and declarations of peace or victory, said Neil Wilson of Saxo Markets, though he added that the market was currently relieved by the less aggressive stance.
In the bond market, the yield on the US 10-year Treasury note fell to 4.34% by 20:20 GMT, down from 4.38% at Friday’s close.
Travel and tourism lead Monday gains
The decline in oil prices has eased concerns about inflation, which had driven bond yields higher in recent days. Despite this, yields remain significantly above pre-conflict levels.
In the corporate sector, travel and tourism companies led gains on Monday. Shares of American Airlines rose 3.64%, United climbed 4.46%, Royal Caribbean jumped 5.81%, and Airbnb advanced 3.17%.
Oil giants managed to withstand the fall in crude prices, with Chevron shares rising 1.73%, ExxonMobil gaining 0.91%, and Shell up 0.30%.
