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U.S. equities opened higher on Monday after volatility rattled European and Asian markets, as President Donald Trump said Washington had held "very good" discussions with Iran, despite Tehran rejecting the claim.
The S&P 500 rose 1.4% to 6,596.00 shortly after the opening bell, while the Nasdaq Composite gained 1.6% to 21,982.16. The Dow Jones Industrial Average also moved higher, up 1.4% at 46,232.45.
Markets found support after Trump said Washington and Tehran had held "very good and productive conversations" over the past two days, aimed at achieving a “complete and total resolution” to hostilities in the Middle East.
He added that he had instructed the Department of War to delay any planned strikes on Iranian power plants and energy infrastructure for five days, depending on the outcome of ongoing talks.
Following the remarks, crude prices fell sharply, reversing part of the gains recorded since late February when the United States and Israel launched strikes on Iran. Brent crude and West Texas Intermediate dropped around 8%, trading near $103 and $91 per barrel, respectively.
Over the weekend, Trump issued a 48-hour ultimatum to Iran to reopen the Strait of Hormuz or face potential strikes on its energy infrastructure. In response, Iran warned the passage would be “completely closed” if military action were taken.
The 10-year Treasury yield also moved lower, falling more than 4 basis points to 4.35% after earlier hitting its highest level since July, as traders worried the Federal Reserve may hold rates steady or even hike next.
Before Monday’s rebound, the Dow and Nasdaq Composite were both nearing correction territory, down about 9.8% from their record highs through Friday, while the S&P 500 had fallen 7%. Monday’s session saw a broad-based recovery, with gains led by cyclical sectors such as banks and industrials alongside a rebound in technology stocks.
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