Oil prices fall, stock markets set to rally after Trump delays Iran strikes – National

The main U.S. indexes were on track to open higher on Monday after President Donald Trump said he would order the military to postpone strikes against Iranian power plants and energy infrastructure following “productive conversations” with Tehran.

Iran’s Fars News Agency, however, disputed Trump’s statement, citing a source who said there had been no direct communication with the United States, nor via intermediaries. Israel’s military said it was conducting strikes on Iran.

Still, global markets staged a sharp recovery after Trump’s comments, with Europe’s STOXX 600 and precious metals turning positive, while oil prices fell, signaling improving risk appetite.

Markets had been trading lower after Iran’s Revolutionary Guards said Tehran would attack Israel’s power plants and plants supplying U.S. bases in the Gulf if Trump carried out his threat to “obliterate” Iran’s power network.

“It’s exactly what the market needed to hear to sort of reprice worst case expectations. This means there is potential for the Strait of Hormuz to reopen; it’s being priced in almost immediately,” said Fiona Cincotta, senior market analyst at City Index.

2:42
Iran vows major retaliation if Trump targets power plants

The recovery depended on if “we get more supportive comments, particularly from Iran” that progress was being made, she said.

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At 08:03 a.m. ET, Dow E-minis rose 653 points, or 1.42 per cent, S&P 500 E-minis added 85.25 points, or 1.3 per cent, and Nasdaq 100 E-minis gained 312 points, or 1.29 per cent.

The CBOE Volatility Index – Wall Street’s fear gauge – retreated after earlier hitting its highest level in two weeks – and was last up 0.30 points at 27.08.

Investors trimmed bets on interest-rate hikes from the U.S. Federal Reserve after Trump’s comments, and they now stand at 20 per cent in December, compared with more than 50 per cent before, according to CME Group’s FedWatch Tool.

Markets had scaled back bets last week to show no easing was expected in 2026 after the Federal Reserve struck a hawkish tone, projecting higher inflation and a single reduction this year.

8:41
Trump threatens to ‘obliterate’ Iran’s power plants in 48-hour ultimatum

Futures tracking the Russell 2000 index rose 2.5 per cent, after being down more than one per cent earlier. The small-cap index, sensitive to higher interest rates, ended more than 10 per cent below its record close of January 22 on Friday, confirming it had been in correction territory.

Oil prices fell by more than 13 per cent and energy stocks reversed gains. Exxon Mobil and Chevron lost over one per cent each in premarket trading, while Occidental Petroleum shed 4.5 per cent.

Airlines jumped, with American Airlines and United Airlines adding more than four per cent each.

Banks, which had sold off sharply during the conflict, inched up, with JPMorgan Chase and Goldman Sachs adding 1.6 per cent each.

Wall Street’s main indexes had logged their fourth week of declines on Friday, with the Nasdaq posting its biggest weekly drop since early February.

Investors now await business activity surveys and consumer sentiment readings later in the week.

In individual stocks, Synopsys gained four per cent before the bell after activist investor Elliott Investment Management built a multibillion-dollar investment in the electronic design automation firm.