Key Takeaways
- US stocks opened in the green on Monday as investors digested the latest developments out of the Middle East.
- US President Donald Trump said he would postpone planned attacks on Iranian energy infrastructure, withdrawing from an earlier ultimatum set for late Monday.
- Benchmark brent crude oil prices dropped 9%, reversing earlier gains.
US stocks opened higher on Monday, as global markets rebounded and oil prices dropped, after US President Donald Trump said he was postponing attacks on Iran’s energy infrastructure following “productive” talks on ending the war.
The Morningstar US Market Index was 0.5% higher in early trading, while the S&P 500 added 1.4% and the tech-heavy Nasdaq 100 climbed 1.7%. Bank, tech and industrial stocks led gains alongside airlines, while energy shares declined.
Trump said Monday that he would postpone planned attacks on Iranian energy infrastructure for five days, pending ongoing negotiations with Tehran. Iran has denied the talks took place, according to the country’s state-affiliated Tasnim News Agency.
“I am pleased to report that the United States of America, and the country of Iran, have had, over the last two days, very good and productive conversations regarding a complete and total resolution of our hostilities in the Middle East,” Trump wrote in a post on Truth Social.
Brent crude oil futures were down 9% to $103 per barrel, while West Texas Intermediate futures were 7% lower at $91.
European markets also rebounded sharply, following declines of as much as 2% earlier in the session.
Trump had previously issued a 48-hour ultimatum on Saturday, warning that he would “obliterate” Iran’s power plants if Tehran did not fully reopen the Strait of Hormuz by late Monday.
At the time, Iran responded by signaling that it would not back down, and threatening to target energy infrastructure and desalination facilities across the Gulf.
Asian markets sold off in Monday’s session, led by declines for South Korea’s KOSPI, which closed 6% lower prior to Trump’s post. “An escalation in threats at the weekend has sent a further wave of depression through markets this morning, with everything from stocks to gold declining,” said Morningstar’s chief European markets strategist Michael Field.
The head of the International Energy Agency said Monday that the Iran war has created an oil crisis worse than those of the 1970s, and that it posed a major threat to the global economy.
Goldman Sachs raised its oil forecast, warning on Friday that the global Brent benchmark could exceed its all-time high, set in 2008, of $147 per barrel if supply disruptions through the Strait of Hormuz were prolonged.
Government bond yields eased across the curve. This follows moves by major central banks to hold interest rates steady at a slew of meetings last week.
UK 10-year gilt yields were down 0.08 percentage points to 4.91% Monday, having hit their highest level since 2008 on Friday. 10-year German bunds were 0.05 percentage points lower at 2.97%, while 10-year US Treasury yields were down 0.04 percentage points to 4.34%.
Gold, meanwhile, pared a recent slump, with spot gold prices plunging 1% to $4,440, as investors continued to weigh precious metals as a safe-haven trade.
