Stocks surged while oil prices plummeted following President Donald Trump’s announcement on Monday that the U.S. would postpone further strikes on Iranian energy infrastructure pending the outcome of negotiations.
The Dow closed up by 631 points, marking a 1.38% gain. The S&P 500 advanced by 1.15%, and the Nasdaq rose by 1.38%. All three stock indices pared back earlier gains that had exceeded 2%.
Still, the rally halted a recent downturn. The Nasdaq had finished Friday on the verge of a correction—a 10% decline from its recent peak.
Brent crude, the global oil benchmark, fell by 10.92% to settle at $99.94 a barrel, dipping below the $100 mark for the first time since March 11th. U.S. West Texas Intermediate crude dropped by 10.28%, closing at $88.13 a barrel, which was its lowest level since March 11th.
These oil prices represented the largest single-day drop since March 10th, the day Trump stated the conflict with Iran would conclude “very soon.” This decline followed oil prices reaching their highest point since July 2022 on Friday.
Trump communicated in a morning social media post that talks with Iran would take place within the week. However, uncertainty remains whether passage through the Strait of Hormuz—a critical waterway supplying 20% of the world’s oil—will be secure, as Iran has effectively blockaded it.
Stock futures jumped sharply, and oil rapidly sank immediately following Trump’s report of a military pause, effectively reversing prior movements. Nevertheless, markets retracted from their initial enthusiasm after the Israel Defense Forces indicated ongoing strikes against Tehran, creating ambiguity regarding whether Iran shared Trump’s version of events.
“The market woke up to potentially good news out of the Middle East on Monday,” noted Chris Larkin, a managing director for trading and investment at Morgan Stanley’s E-Trade, in a memo.
“But any rally for support will likely require tangible follow-through on the geopolitical front,” Larkin added. “We are still operating in a headline-driven market, and with a light economic calendar this week, the focus will remain on oil prices and policy.”
Iranian Foreign Ministry spokesman Ismail Baghaei stated that Iran has not engaged in negotiations with the United States, refuting Trump’s claims of significant progress in talks between Washington and Tehran, according to the Islamic Republic’s state news agency.
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President Donald Trump speaks with reporters before departing on Marine One from the South Lawn of the White House on Friday, March 20, 2026, in Washington. (AP Photo/Alex Brandon)
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Europe’s benchmark Stoxx 600 index advanced by 0.6%, closing slightly higher but trimming initial gains of 2.3% following Trump’s statement. Germany’s DAX index finished up 1.2% after initially surging by over 3.5%.
Gold prices fell more than 3% instantly, following the worst week for the metal since 1983, continuing a recent retreat after significant increases in previous months. The U.S. Dollar Index slipped 0.5%, fluctuating after robust growth earlier in the month.
Treasury yields decreased as investors bought bonds. Yields, which influence borrowing costs across the economy, had risen sharply in recent weeks as the conflict with Iran intensified.
Gasoline Prices
Diesel and gasoline futures in the U.S. declined on Monday in tandem with oil prices. Diesel futures dropped by approximately 10%, and gasoline futures fell by about 9.5%. However, futures remain up 79% and 73% year-to-date, respectively.
Despite Monday’s oil price drop, prices are still roughly one-third higher than they were before the U.S. and Israel attacked Iran on February 28th.
Global oil prices soared drastically since the war in Iran began, driven by a shortage of tankers able to navigate the strait. Trump had threatened to “destroy” Iranian power facilities if Tehran did not cease attacks on shipping and allow the strait to reopen by today.
Americans have borne the cost of these hostilities through rising pump prices. U.S. gasoline prices increased for the 23rd consecutive day on Monday, reaching $3.96 according to the latest AAA data—the highest price since August 2022.
The average price has now increased by $1.02, or 34%, over the last month. This represents a larger monthly increase than observed following Hurricane Katrina in 2005 and the Russian invasion of Ukraine in 2022. That prior spike ultimately drove prices to a record high of $5.02 per gallon.
While America, the world’s largest oil producer, sources relatively little crude from the Middle East, prices are set on global commodity markets. U.S. gas prices are directly correlated, as gasoline is refined from crude oil.
Even if the war effectively concludes and oil prices begin to subside, it may take time for prices at the pump to reflect these decreases as prior increases filter through the system.
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