Markets Rally as Geopolitical Tensions Ease, Oil Prices Tumble

U.S. stocks surged on Monday as investors welcomed signs of de-escalation in the Middle East following Iran’s limited retaliation to U.S. airstrikes. The Dow Jones Industrial Average climbed 0.9%, gaining over 350 points, while the S&P 500 and Nasdaq each rose nearly 1%, snapping a three-day losing streak.

The market rebound was fueled by Iran’s measured response—missile strikes on a U.S. base in Qatar that caused no casualties—which analysts interpreted as a signal that Tehran is not seeking further escalation. President Trump echoed that sentiment, suggesting Iran had “gotten it all out of their system” and expressing hope for peace talks.

Oil prices, which had spiked on fears of broader conflict, reversed sharply. Brent crude fell 7% to $71.48 per barrel, and WTI dropped to $68.51, as investors reassessed the risk of supply disruptions in the Strait of Hormuz.

Adding to the market’s optimism, Federal Reserve Governor Michelle Bowman voiced support for a potential interest rate cut as early as July, boosting hopes for monetary easing amid global uncertainty.

Tesla also made headlines, with shares jumping 8% after a successful robotaxi test launch in Austin, further energizing the tech-heavy Nasdaq.

The day’s gains reflect cautious optimism that diplomacy may prevail, even as markets remain alert to any shifts in the geopolitical landscape.