Dow futures rallied nearly 1,000 points, oil fell below $100 after Trump ordered a 5-day moratorium on attacks on Iran’s power plants.
US stock futures rose and oil prices fell on Monday morning after President Trump announced a five-day moratorium on plans to strike Iran’s energy plants following what he called “productive talks” with Tehran.
Futures tied to the Dow Jones Industrial Average were up 980 points, or 2.1%, as of 8:55 a.m. ET, while S&P 500 and Nasdaq futures jumped 1.9%, each.
Brent crude futures fell to $97.70 a barrel, down from last week’s high of more than $111, while West Texas Intermediate crude fell to $89.69.
National average gasoline prices, meanwhile, jumped to $3.96 a gallon, according to AAA, as there is volatility between oil futures and prices at the pump.
In a letter to Public Truth on Monday morning, Trump wrote that the US and Iran had “VERY GOOD AND EVENTS” over the past two days, adding that he had ordered the Department of Defense to postpone strikes on Iran’s nuclear power plants for five days.
It was a sharp turn for the stock market, which was expected to see further losses ahead of Trump’s morning announcement as the Iran war entered its fourth week.
Before Monday’s reversal, the Dow Jones and Nasdaq each appeared poised to enter correction territory, defined as a 10% decline. The Russell 2000 on Friday was the first major index to enter correction territory.
Both the Dow and Nasdaq are down about 10% from their record highs through Friday, while the S&P 500 is down about 7% from its highs.
“While some downsides are possible, we may be nearing the end of this correction, even if the Iran conflict continues, as stocks tend to price in these events, and eventually move on to other things,” Clark Bellin, president and chief investment officer at Bellwether Wealth, said in a note on Monday.
“We don’t need an end to the Iran war for stocks to return to these recent declines.”
Tensions escalated over the weekend as Trump gave Iran a 48-hour deadline to reopen the Strait of Hormuz, a key sea route for 20 percent of the world’s oil – threatening to blow up their power plants otherwise.
Tehran has vowed to retaliate against any attack on its infrastructure by targeting US power and desalination plants, the latter of which desalinate seawater to produce clean drinking water.
Last week, Israel attacked Iran’s gas plant in South Pars, and Tehran retaliated by attacking important energy facilities in Qatar and Saudi Arabia, and also attacked ships in the Gulf.
The International Energy Agency said on Monday that at least 40 critical energy assets in the Middle East – including oil and gas fields, refineries and pipelines – had been “severely or severely” damaged since the fighting began on February 28.
Analysts initially expected that oil and gasoline prices would drop immediately after the end of the war. But oil infrastructure is complex and takes time to repair, raising concerns that prices could remain high for a long time even if the war ends soon.
