Key Highlights
- Markets tumbled Monday morning following fresh Iranian attacks after Trump threatened strikes on energy facilities
- President Trump announced postponement of military action against Iran citing “productive conversations” with Tehran officials
- Major indices reversed sharply higher, with Dow, S&P 500, and Nasdaq futures soaring more than 2%
- Crude oil briefly surged past $100 per barrel before retreating following Trump’s strike delay announcement
- Small-cap Russell 2000 index officially entered correction, trading over 10% beneath its January peak
US equity markets experienced dramatic volatility Monday morning, plummeting initially before mounting a powerful rally after President Trump announced he would delay planned military operations against Iran following what he described as “productive conversations” with Iranian officials.
Dow Jones Industrial Average futures initially declined approximately 0.8% during early trading. S&P 500 futures dropped 0.7%, while Nasdaq 100 futures led declines with a nearly 1% decrease.
The selling pressure followed new Iranian military operations earlier Monday. These attacks occurred after Trump delivered a weekend ultimatum, warning he would authorize strikes targeting Iranian energy infrastructure unless the Strait of Hormuz reopened within 48 hours.
Iran’s Revolutionary Guards had countered with their own threats, vowing to target Israeli power facilities and installations supporting US military bases throughout the Gulf region if Trump executed his promise to “obliterate” Iran’s electrical grid.
Investor sentiment was already fragile following four consecutive weeks of Wall Street declines. Last week saw the Nasdaq register its steepest weekly decline since early February.
Crude Briefly Breaches $100 Before Reversing
Oil prices spiked as Middle East tensions intensified. West Texas Intermediate crude futures briefly touched the $100 per barrel threshold. Brent crude, the international pricing benchmark, climbed beyond $113 per barrel.
Elevated crude prices intensify worries about inflationary pressures and the Federal Reserve’s monetary policy trajectory. Gold futures, which had maintained positive territory year-to-date, surrendered their 2026 gains amid speculation the Fed might maintain higher rates for an extended period.
Trump then pivoted. He declared the US military would delay strikes following the “productive conversations” with Iran. Markets responded immediately.
Equities Mount Dramatic Comeback
By mid-morning hours, Dow futures had rocketed upward more than 1,100 points, representing a gain of roughly 2.5%. S&P 500 futures advanced over 2.3%, while Nasdaq 100 futures climbed 2.4%.
Europe’s STOXX 600 index reversed into positive territory. Precious metals also strengthened. Oil prices retreated sharply following Trump’s announcement.
The CBOE Volatility Index, commonly referred to as Wall Street’s fear indicator, declined after reaching its highest reading in two weeks. It last traded down approximately 4 points at 22.79.
Russell 2000 futures, representing small-capitalization stocks, soared 4.7% after trading down more than 1% during the opening session. The small-cap benchmark closed Friday over 10% beneath its January 22 all-time high, officially confirming correction status.
Chris Beauchamp, chief market analyst at IG Markets, commented: “This is obviously a postponement, not a complete ceasefire, and we will see what happens from here. What’s done is still not undone, so the impact has yet to be seen, but obviously, markets are breathing a sigh of relief.”
The Russell 2000’s confirmation of correction territory alongside the Nasdaq’s four-week declining streak represented the most significant concerns facing investors entering Monday’s session.
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