Wall Street kicked off August with a broad rally Monday after President Donald Trump scrapped planned military strikes against Iran, easing fears of a wider conflict in the Middle East and sending oil prices sharply lower.
Stocks climbed across all three major indexes as investors welcomed signs that Washington and Tehran would return to the negotiating table instead of escalating the conflict. Trump announced Sunday that he had called off a planned attack on Iran and said talks between the two countries were set to resume Monday. The decision marked a dramatic shift after reports late last week suggested the White House was preparing another round of military action as diplomatic hopes faded and energy prices surged.
The Dow Jones Industrial Average jumped 643 points, or 1.2%, in early trading. The S&P 500 rose 1.1%, while the tech-heavy Nasdaq Composite gained 1.5%.
Technology helped lead the advance, with communications services and software companies posting strong gains. Meta surged more than 6% as investors piled back into growth stocks.
Oil prices, which had climbed on fears of a broader regional war, reversed course after Trump’s announcement. Brent crude futures fell nearly 6% to $83.03 a barrel, while West Texas Intermediate crude dropped more than 7% to $78.59 a barrel.
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The pullback in energy prices also helped calm inflation concerns. The benchmark 10-year Treasury yield slipped about 7 basis points to roughly 4.67% as bond prices rose.
Still, some analysts warned investors not to assume the geopolitical tensions have disappeared.
“That said, ‘investors are keeping their enthusiasm in check as ‘we’ve been here before’ and it’s likely the conflict has further to go before reaching a resolution (if it ever does),’” wrote Vital Knowledge founder Adam Crisafulli.
The market’s strong start comes after a volatile July and begins what could be another pivotal week for investors.
Attention now shifts to a slate of labor market reports that will culminate Friday with the release of July’s closely watched nonfarm payrolls report and unemployment rate. Economists expect the U.S. economy added 87,500 jobs in July, up from 57,000 the previous month, according to FactSet consensus estimates. The unemployment rate is projected to edge up to 4.3% from 4.2%.
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