The S&P 500 rose 1.16% on Monday as President Donald Trump announced he had called off a planned military strike on Iran, citing progress toward a broader deal to end the six-month conflict. Oil prices fell more than 5% on the news, with Brent crude dropping to around $83.40 a barrel and U.S. crude declining 6% to $79.60, as investors shed concerns about supply disruptions from Middle East escalation.
Trump said late Saturday that the U.S. would cancel the attack “subject to being able to rapidly make a deal,” according to a post on Truth Social. He described the agreement framework as including “the Immediate, Complete, and Total OPENING OF THE HORMUZ STRAIT, and an end to Iran’s nuclear threat,” with negotiations set to resume on Monday.
The stock market’s gain reflected a broader shift in investor sentiment as geopolitical risk eased. When tensions with Iran had escalated earlier in the conflict, oil prices had surged and equities had fallen sharply. A June 2026 U.S.-Iran ceasefire deal triggered a historic rally, with the S&P 500 advancing 1.8% and Brent crude futures dropping 2.9% to $90.38 a barrel, according to reporting from the period. The pattern repeated on Monday: as the threat of fresh military action receded, investors repriced risk downward across both asset classes.
Trump had ordered military preparations for what he described as “the biggest attack since World War II” before deciding to pursue diplomacy instead. The decision came after months of escalating tensions that had driven oil prices to elevated levels, weighing on corporate earnings and consumer purchasing power. Commodity analysts have noted that oil price volatility is likely to persist even with a deal framework in place, given the fragility of ceasefire arrangements and the potential for renewed conflict.
The broader market context shows how sensitive stocks have become to geopolitical developments. When Trump claimed in July that the Iran ceasefire was “over,” oil prices had jumped 6% and stocks fell, with Brent rising to $78.50 a barrel. The reversal on Monday underscores how quickly sentiment can shift when diplomatic progress appears to reduce the risk of supply-chain disruption. For investors, the key question now is whether the deal framework can hold through negotiations and prevent the conflict from reigniting.
Sources
- CNBC — reported oil prices fell more than 5% after Trump called off the planned Iran strike, with Brent crude dropping and WTI declining 6%.
- NPR — confirmed Trump’s announcement that he was canceling strikes, subject to rapidly reaching a deal, and cited the framework terms including opening the Strait of Hormuz and ending Iran’s nuclear threat.
- Al Jazeera — reported Trump’s decision to halt attacks and that negotiations were set to begin on Monday.
- Reuters — confirmed Trump’s statement that the U.S. would hold off on fresh attacks as long as a deal could be reached quickly.
- Bloomberg — reported Trump’s Truth Social post saying he’d agreed to cancel the attack “subject to being able to rapidly make a deal.”
- New York Times — reported Trump’s announcement that he had canceled the military assault, opting to pull back from the brink of war.
- CNBC — reported that commodity analysts warn oil price volatility is likely to persist despite a U.S.-Iran peace agreement.
