The Dow Jones Industrial Average climbed roughly 700 points on Monday after President Donald Trump canceled planned military strikes against Iran and said talks between the two countries would resume, sending oil prices sharply lower.
The S&P 500 gained about 1% and the Nasdaq rose 1.2% as crude oil tumbled more than 6% on hopes for renewed diplomacy
Bloomberg / Getty Images
The Dow Jones Industrial Average climbed roughly 700 points on Monday after President Donald Trump canceled planned military strikes against Iran and said talks between the two countries would resume, sending oil prices sharply lower.
Trump announced Sunday that he had called off the attack and that the two sides would return to the table Monday. Reports in U.S. media on Friday had suggested the president was readying another round of strikes after prospects for a diplomatic resolution faded and energy prices climbed.
Oil prices fell sharply in response. Brent crude futures were down nearly 6%, trading around $83.03 a barrel, and West Texas Intermediate futures lost more than 7% to reach $78.59 a barrel.
Treasury yields pulled back as well, with inflation worries taking a step back. The 10-year note yield dropped around 7 basis points to approximately 4.67%.
Adam Crisafulli, founder of Vital Knowledge, cautioned that "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)," according to CNBC.
Monday is the first trading day of August, following a volatile July for U.S. equities. Investors are also watching a week of labor market data that culminates Friday with July's nonfarm payrolls report. Economists polled by FactSet expect the U.S. economy to have created 87,500 jobs last month, compared with 57,000 in June, while the jobless rate is forecast to tick up a tenth of a point to 4.3%, according to consensus estimates cited by CNBC.
European equities also advanced, with the broad Stoxx 600 gaining 0.3% and Germany's DAX up 1.3%. Across Asia, the picture was uneven: South Korea's Kospi dropped more than 5%, surrendering part of Friday's record-breaking rally, while Japan's Nikkei 225 lost 0.94% and Australia's S&P/ASX 200 finished 0.47% to the upside. The yen also gained ground against the dollar following coordinated action by Washington and Tokyo to support the currency, according to The Wall Street Journal.
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