NEW YORK — Wall Street shot higher and global oil futures tumbled Monday after President Donald Trump extended his deadline for Iran to reopen the crucial Strait of Hormuz and said the U.S. would hold off on strikes against Iranian power plants and other energy infrastructure for five days.
Futures for the S&P 500 and Dow Jones Industrial Average rose 1.3% before the opening bell. Nasdaq futures were up 1.2%.
Oil prices also immediately reversed course, sinking as much as 10% at one point. Benchmark U.S. crude slid $5.38 to $92.85 a barrel. Brent crude, the international standard, tumbled $5.94 to $106.25 a barrel.
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Trump's post on social media about the strikes came as the war with Iran enters its fourth week.
Markets in Europe also jumped higher after being down as much as 2% earlier.
France’s CAC 40 rose 1.2%, while Germany’s DAX climbed 0.8%. Britain's FTSE 100 inched up marginally.
In Asia, Japan’s benchmark Nikkei 225 dropped 3.5% to finish at 51,515.49. In Taiwan, the Taiex shed 2.5% to 32,722.50. Australia’s S&P/ASX 200 fell 0.7% to 8,365.90. South Korea’s Kospi dove 6.5% to 5,405.75. Hong Kong’s Hang Seng slipped 3.5% to 24,382.47, while the Shanghai Composite declined 3.6% to 3,813.28.
Trump over the weekend warned the U.S. will “obliterate” Iran’s power plants if it doesn’t fully open the Strait of Hormuz within 48 hours, prompting Tehran to say it would respond to any such strike with attacks on U.S. and Israeli energy and infrastructure assets in the region.
Those hostilities turned into progress early Monday, giving markets the optimism to claw back some of the vast losses they've suffered since the war began just more than three weeks ago.
Higher oil prices had dashed hopes for a possible upcoming cut to interest rates by the Federal Reserve, analysts said. Before the war, traders were betting that the Fed would cut rates at least twice this year. Central banks in Europe, Japan and the United Kingdom also recently held their interest rates steady.
In other trading, gold and silver slumped again. Gold fell 4.4% to $4,374 per ounce while silver lost 2.9% to $67.67.
