Major United States benchmarks rebounded on Monday (Tuesday AEDT) after a volatile trading session, with major indices recovering from earlier losses as oil prices reversed sharply lower and President Donald Trump signalled the conflict with Iran may be nearing its end.
The Dow Jones Industrial Average rose 239.3 points, or 0.5%, to close at 47,740.8. The S&P 500 climbed 56.0 points, or 0.8%, to 6,796.0, while the Nasdaq Composite jumped 308.3 points, or 1.4%, to finish at 22,696.0.
Markets had been under pressure earlier in the session after oil prices surged overnight amid fears of supply disruptions tied to the ongoing conflict in the Middle East.
However, sentiment improved after comments from Trump suggesting the military campaign against Iran was nearing completion.
On Monday, Trump told a CBS News reporter, who shared the remarks in a post on X, that “the war is very complete, pretty much”.
“They have no navy, no communications, they’ve got no Air Force,” the president said, adding that the U.S. is “very far” ahead of his initially stated timeframe for the war of four to five weeks.
Trump also said that ships are moving through the key Strait of Hormuz passageway and that he is “thinking about taking it over”.
Oil prices swung sharply lower following the remarks. West Texas Intermediate crude dropped as much as 9% to about $81 a barrel after earlier surging above $100. Prices had briefly topped $119 per barrel, the first time since 2022 when markets were reacting to Russia’s invasion of Ukraine.
International benchmark Brent crude also retreated sharply, falling as much as 8% to around $84 a barrel.
The dramatic moves followed supply disruptions in the Middle East after major oil producers reduced output amid the temporary closure of the Strait of Hormuz, a critical global shipping route for energy exports.
Kuwait announced production cuts but did not specify the scale of the reductions, while Iraq’s oil output has reportedly dropped by as much as 70% as the conflict intensified.
Despite the volatility in energy markets, broader equities found support from strong gains in technology and semiconductor stocks.
Nvidia climbed 2.7%, Broadcom advanced 4.6%, Micron Technology gained 5.1%, and Advanced Micro Devices lifted 5.3%.
Investors are also closely watching international policy responses to stabilise oil markets. Energy ministers from the Group of Seven nations — Canada, France, Germany, Italy, Japan, the United Kingdom and the United States — are scheduled to meet virtually on Tuesday to discuss a potential release of strategic petroleum reserves.
The $100-per-barrel threshold for oil has been viewed by many investors as a critical level that could threaten global economic growth if sustained for an extended period.
Trump downplayed the risks on Sunday evening, posting that a rise in “short term oil prices” was a “very small price to pay” for eliminating Iran’s nuclear threat.
In fixed income markets, the 10-year Treasury yield fell 0.9% to 4.103%, while the two-year yield slipped 0.2% to 3.55%.
