Stocks jolt higher after Trump says US will postpone Iran energy strikes for a “five day period”
Global equity markets were sharply in the red once again until President Trump posted on Truth Social, detailing a five-day break from strikes on Iranian energy infrastructure after “productive” talks.
Global markets were on track to open the week in the red once again as the US-Iran war entered its fourth week with escalating threats from both sides.
On Saturday, President Trump posted on Truth Social that the US would “hit and obliterate” Iran’s power plants, “starting with the biggest one first,” if Tehran didn’t fully reopen the Strait of Hormuz within 48 hours — or Monday evening Eastern time, based on the timing on the post.
In a follow-up post Monday morning, however, Trump said he would postpone any strike “for a five day period,” citing “very good and productive conversations” with Iran over the past two days. The post sent stocks jolting higher, with futures on the S&P 500 Index gaining more than 3% in a matter of minutes, from down ~0.7% to up 2.4%.
Iran’s foreign ministry denied any such negotiations with the US.
News of the potential ceasefire on energy asset strikes sent Brent crude oil down sharply, from $113 a barrel to as low as ~$96, though markets have since reversed some of the immediate reaction to Trump’s post.
Futures prices for US benchmark West Texas Intermediate — which topped $101 early Monday — plunged on the news, falling to roughly $92 a barrel.
Stocks that have been hit hard by the war with Iran rallied, led by fuel price-sensitive stocks like cruise lines Carnival, Royal Caribbean, and Norwegian.
Airlines rose, with Delta Air Lines, United Airlines, American Airlines, Frontier, Southwest Airlines, Alaska Airlines, Allegiant, and Frontier taking off early Monday morning.
Chemical and fertilizer makers, which have surged since the war began on expectations of shortages and price increases for their products, tumbled, led by CF Industries, LyondellBasell, and Dow, Inc..
Oil majors Exxon and Chevron, and exploration and production company ConocoPhillips dropped early on the news before recovering.
Natural gas drillers Devon Energy, Diamondback Energy, APA Corporation, and Coterra Energy all pared early losses.
The market response reflected relief at a temporary pause in what seemed to be a growing cycle of escalation in the conflict.
Previously, Iranian Parliament Speaker Mohammad Bagher Ghalibaf had warned on Sunday that any strikes on Iran’s power plants could “immediately” trigger retaliatory attacks on energy and oil infrastructure across the region, driving oil prices higher for a prolonged period.
That had set the stage coming into Monday morning for another risk-off day of trading as IEA Executive Director Fatih Birol detailed the extent of the damage, confirming Monday morning that at least 40 energy facilities across nine countries have already been “severely or very severely” damaged. The conflict has reduced global oil supplies by roughly 11 million barrels per day and liquefied natural gas supplies by 140 billion cubic meters, according to Birol — a combined disruption that he said exceeds the 1970s oil shocks and the 2022 gas shortages from the Russia-Ukraine war put together.
Global markets had been deep in the red before the reversal as investors priced in the weekend’s escalating threats: stocks fell sharply across Asia-Pacific, with Japan’s Nikkei and Hong Kong’s Hang Seng both closing 3.5% lower and South Korea’s KOSPI plunging 6.5% on Monday. With Trump’s post flipping the script, however, Europe’s STOXX 600 swung from down 2.3% to up 1.5% Monday morning.
Precious metals — which have been crushed since the Fed held rates — have also pared some of their losses, with spot gold now down 3.2% to ~$4,340 per ounce, recovering from a nearly 8% plunge earlier in the session. The metal has still shed roughly 25% since hitting a record high near $5,600 in January. Silver, which has nearly halved since the war began, is down about 2.5%.
