US stocks rebounded Monday while oil prices slid as jitters over the conflict between Israel and Iran started to retreat.
The Dow Jones Industrial Average (^DJI) rose more than 300 points, or roughly 0.8%, while the S&P 500 (^GSPC) moved up nearly 1%. The Nasdaq Composite (^IXIC) gained 1.5%. The cautious optimism followed a bruising Friday session that saw the Dow plunge more than 700 points in a broad risk-off move.
Stocks hit session highs after the Wall Street Journal reported that Iran may be willing to restart talks over its nuclear program in an effort to deescalate the conflict with Israel.
When asked about the possibility on Monday, President Trump said, “Yeah … they’d like to talk, but they should have done that before.”
The geopolitical flare-up comes at a delicate moment for markets already buffeted by tariff insecurity. Now investors are regaining some appetite for risk amid rising optimism that the conflict won’t spill over into a broader regional crisis.
A measure of calm is also returning to the oil market, rattled by fears of disruption to the global energy supply. After spiking initially, prices pushed down to pull Brent crude (BZ=F) to just under $73 a barrel and WTI crude (CL=F) to settle below $72 a barrel.
Meanwhile, the 10-year Treasury yield (^TNX) rose to 4.42% while gold (GC=F) futures retreated from a recent rally. Bitcoin (BTC-USD) climbed to hover above $108,000 per token.
On the trade front, US talks with the EU and Canada are taking center stage as Trump attends the G7 summit in Canada. Looming is Trump’s July 9 deadline, the date at which his 90-day pause of steep “Liberation Day” hikes expires.
Looking ahead, markets overwhelmingly expect the Fed to hold rates steady on Wednesday. While President Trump has maintained pressure on Chair Jerome Powell to cut rates, current market dynamics may leave little room to budge.
