Oil drops, Dow soars by more than 1,000 points after Trump postpones strikes on Iran
By John Towfighi, Chris Isidore, CNN
(CNN) — Stocks soared and oil prices fell sharply after President Donald Trump on Monday said the United States would postpone further strikes on Iran’s energy infrastructure, pending the outcome of negotiations.
The Dow rose 1,070 points, or 2.35%. The S&P 500 was 2.1% higher and the Nasdaq gained 2.4%. The sharp move higher halted a recent slide. The Nasdaq had closed on the verge of correction Friday — a decline of 10% from a recent peak.
Oil prices dropped: Brent crude was down 13.2% to $97.40 per barrel. US crude fell 12.5% to $86 per barrel.
Trump, in an early morning social media post, said discussions with Iran would take place over the course of the week. But it’s unclear whether the Strait of Hormuz would be safe to transit. The crucial waterway, which carries 20% of the world’s oil supply, has been effectively closed by Iran.
Stock futures jumped higher and oil swiftly fell immediately after Trump’s message about the military pause, reversing earlier moves. But markets retreated from some of their initial enthusiasm after the Israel Defense Forces said it was continuing strikes on Tehran, and it became unclear whether Iran agreed with Trump’s version of events.
“The market woke up to some potentially good news out of the Middle East on Monday,” Chris Larkin, managing director for trading and investing at E-Trade from Morgan Stanley, said in a note.
“But follow-through on any relief rally will likely require tangible follow-through on the geopolitical front,” Larkin said. “We’re still living in a headline-driven market, and with a light economic calendar this week, the focus will remain oil prices and politics.”
Stocks in Europe rose, reversing earlier losses: The benchmark Stoxx 600 index was up 2.1% and Germany’s DAX index soared 3%.
Gold prices dropped 2%, continuing a recent bout of volatility. The US dollar index moved 0.66% lower.
Treasury yields fell as investors bought bonds. Yields, which influence borrowing costs across the economy, had moved sharply higher in recent weeks while the Iran war intensified.
Gas prices
US diesel and gasoline futures fell Monday alongside oil prices. Diesel futures were down 12% and gasoline futures fell 11%. But futures are still up 76% and 70% this year, respectively.
Even with the declines in oil prices Monday, crude prices remain roughly a third higher than they were before the United States and Israel attacked Iran on February 28.
Global oil prices have soared since the start of the war in Iran due to the lack of oil tankers able to exit the strait. Trump had threatened to “obliterate” Iran’s power plants unless it stopped the attacks on shipping and allowed the strait to open by today.
Americans have paid the price for the fighting in the form of higher gas prices. US gas prices rose for the 23rd straight day Monday, reaching $3.96 in the latest reading from AAA, the highest price since August of 2022.
The average price is now up $1.02, or 34%, in the last month. That’s a bigger one-month gain than in the wake of Hurricane Katrina in 2005 and also the Russian invasion of Ukraine in 2022. The latter spike eventually took prices to a record $5.02 a gallon.
While America, the world’s largest oil producer, gets relatively little crude from the Middle East, prices are set in a global commodity market. US gas prices are directly affected since gasoline is derived from crude.
Even if the was is essentially over and oil prices do start to fall, it could take some time for pump prices to start to decline as previous increases work their way through the system.
This is a developing story and will be updated.
The-CNN-Wire
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