New York, USA – Global financial markets experienced a dramatic shift on Monday, with US stock futures surging after President Donald Trump announced an unexpected diplomatic breakthrough with Tehran. The rally was fueled by Trump’s statement revealing that he had held “very positive and productive” talks with the Iranian side over the past two days. He also announced a freeze on any potential military strikes targeting Iranian energy facilities and infrastructure.
Stock markets rebound, while crude oil prices decline.
Wall Street indices reacted strongly to the news, with Dow Jones Industrial Average futures rising by approximately 1,100 points (2.6%), and S&P 500 and Nasdaq 100 futures both climbing 2.7%. In contrast, oil prices plummeted, with West Texas Intermediate crude falling by more than 9% to trade below $90 a barrel, while Brent crude, the international benchmark, plunged by more than 13% to below $97 a barrel. This eased some of the inflationary pressures that had been troubling investors.
Truth Social diplomacy and the time limit
Trump explained in a post on Truth Social that the ongoing talks aim to reach a comprehensive solution to the tensions in the Middle East. Accordingly, he directed the Department of Defense (the Pentagon) to postpone any military strikes against Iranian energy facilities for five days, provided that progress in the negotiations continues. This development comes as the standoff enters its fifth week, following an exchange of threats targeting international shipping lanes and desalination and power plants in the Gulf.
Watch cautiously for support levels
Despite this optimism, investors are cautiously monitoring technical support levels, especially after the S&P 500 broke below its 200-day moving average last week for the first time since May. Markets are also awaiting the release of the preliminary S&P Global Purchasing Managers’ Index (PMI) on Tuesday morning. Investors are looking for signs of resilience in the US economy amid the sharp geopolitical volatility witnessed this March. They hope that the easing of tensions will end the weekly losing streak that has plagued major indices since the beginning of the year.
