The principal U.S. indexes were on the right track to open higher on Monday after President Donald Trump said he would order the military to postpone strikes against Iranian power plants and energy infrastructure following “productive conversations” with Tehran.
Iran’s Fars News Agency, nonetheless, disputed Trump’s statement, citing a source who said there had been no direct communication with the US, nor via intermediaries. Israel’s military said it was conducting strikes on Iran.
Still, global markets staged a pointy recovery after Trump’s comments, with Europe’s STOXX 600 and precious metals turning positive, while oil prices fell, signaling improving risk appetite.
Markets had been trading lower after Iran’s Revolutionary Guards said Tehran would attack Israel’s power plants and plants supplying U.S. bases within the Gulf if Trump carried out his threat to “obliterate” Iran’s power network.
“It’s exactly what the market needed to listen to to kind of reprice worst case expectations. This implies there may be potential for the Strait of Hormuz to reopen; it’s being priced in almost immediately,” said Fiona Cincotta, senior market analyst at City Index.
The recovery relied on if “we get more supportive comments, particularly from Iran” that progress was being made, she said.
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At 08:03 a.m. ET, Dow E-minis rose 653 points, or 1.42 per cent, S&P 500 E-minis added 85.25 points, or 1.3 per cent, and Nasdaq 100 E-minis gained 312 points, or 1.29 per cent.
The CBOE Volatility Index – Wall Street’s fear gauge – retreated after earlier hitting its highest level in two weeks – and was last up 0.30 points at 27.08.
Investors trimmed bets on interest-rate hikes from the U.S. Federal Reserve after Trump’s comments, they usually now stand at 20 per cent in December, compared with greater than 50 per cent before, in response to CME Group’s FedWatch Tool.
Markets had scaled back bets last week to indicate no easing was expected in 2026 after the Federal Reserve struck a hawkish tone, projecting higher inflation and a single reduction this yr.
Futures tracking the Russell 2000 index rose 2.5 per cent, after being down multiple per cent earlier. The small-cap index, sensitive to higher rates of interest, ended greater than 10 per cent below its record close of January 22 on Friday, confirming it had been in correction territory.
Oil prices fell by greater than 13 per cent and energy stocks reversed gains. Exxon Mobil and Chevron lost over one per cent each in premarket trading, while Occidental Petroleum shed 4.5 per cent.
Airlines jumped, with American Airlines and United Airlines adding greater than 4 per cent each.
Banks, which had sold off sharply through the conflict, inched up, with JPMorgan Chase and Goldman Sachs adding 1.6 per cent each.
Wall Street’s principal indexes had logged their fourth week of declines on Friday, with the Nasdaq posting its biggest weekly drop since early February.
Investors now await business activity surveys and consumer sentiment readings later within the week.
In individual stocks, Synopsys gained 4 per cent before the bell after activist investor Elliott Investment Management built a multibillion-dollar investment within the electronic design automation firm.