Markets Bounce Back Following Trump’s Assertion of Iran Conflict Resolution
On Monday, Wall Street witnessed a remarkable recovery. The S&P 500 ascended by 0.8%, while the Nasdaq soared by 1.38%. This surge came in the wake of President Donald Trump’s statement to CBS News that the Iran conflict is “very complete, pretty much.” This led to the equity benchmark wiping out an intraday loss exceeding 1.5% for the first time since April.
The market turnaround followed a significant increase in oil prices over the weekend. West Texas Intermediate escalated by 11.73% to $101.56, and Brent crude leaped by 9.84% to $101.81. This surge marked the first instance of oil crossing the $100 threshold since Russia’s invasion of Ukraine in 2022. The rise was instigated by major Middle East producers reducing output as the critical Strait of Hormuz remained closed due to the ongoing conflict.
Asian markets were hit hardest by the crisis. Japan’s Nikkei 225 plummeted by 6.45%, and South Korea’s KOSPI fell by 7.72% after circuit breakers paused trading. The region, which imports 90% of the oil that traverses the Strait of Hormuz, is especially susceptible to supply disruptions.
However, by the end of U.S. trading, optimism about a potential resolution to the 10-day conflict led to oil prices falling to around $87 per barrel in late hours. Energy stocks, which had rallied earlier in the session, saw Exxon Mobil and Chevron each gaining nearly 1%.
Source: Bloomberg