Stocks Jump, Oil Tumbles After Trump Pauses Iran Strikes

U.S. stocks surged early Monday while oil prices plunged, as easing geopolitical tensions in the Middle East—triggered by President Donald Trump’s announcement of delayed military action against Iran—drove risk appetite at the open. The Dow Jones Industrial Average rose 793.67 points, or 1.74%, to 46,371.1, while the S&P 500 gained 93.27 points, or 1.43%, to 6,599.75. The Nasdaq Composite advanced 339.66 points, or 1.57%, to 21,987.3.

The primary catalyst was a sharp reversal in energy markets after Trump said the U.S. would postpone strikes on Iranian infrastructure for five days amid ongoing negotiations. “Very good and productive conversations” are underway aimed at resolving hostilities, Trump said in a social media post.

Crude oil fell $8.56, or 8.71%, to $89.67 a barrel, reflecting a rapid unwind of geopolitical risk premium that had built during the recent escalation. Earlier reports indicated oil had dropped as much as 14% before paring losses, underscoring the volatility tied to conflicting signals around diplomacy and military risk.

Equities responded immediately to the decline in energy prices and reduced uncertainty. Gains were broad-based, with risk-sensitive sectors leading higher as investors rotated back into growth and cyclical assets. At the same time, the CBOE Volatility Index (VIX) fell 3.14 points, or 11.73%, to 23.64, signaling a sharp drop in market hedging demand.

Secondary factors included improving risk sentiment tied to stable labor conditions abroad. Research from Apollo Global Management indicated no evidence that artificial intelligence is displacing offshore workers in India and the Philippines, alleviating concerns about sudden labor market disruptions in global supply chains .

Separately, logistical disruptions in New York added to the morning’s news flow after a fatal Air Canada crash temporarily shut down LaGuardia Airport, with operations expected to resume later in the day, according to the New York Post .

Looking ahead, investors are focused on whether diplomatic momentum in the Middle East holds, as well as upcoming U.S. economic data and Federal Reserve signals that could shape the next leg of the rally.