Stocks rise and oil falls after Trump's comments that war with Iran is moving fast

U.S. financial markets ended Monday's trading day with a significant recovery after a day marked by sharp swings. Stocks rebounded and oil prices retreated after President Donald Trump signaled that the U.S.-Israel war against Iran is "very far ahead of schedule" and virtually over.

The statements helped reduce some of the uncertainty that had rattled markets since early morning, as investors reacted cautiously to the potential impact of the conflict on global energy supplies.

Oil soars, then retreats

The volatility began even before Wall Street opened. By Sunday afternoon, U.S. crude soared as high as nearly $120 a barrel, reflecting market concerns about conflict in Middle East.

Global benchmark Brent crude also approached that level overnight, reaching its highest point since 2022.

Throughout Monday, prices began to stabilize. U.S. crude traded as high as around $95 per barrel during the afternoon, while Brent crude reached around $98.96 at its daily settlement price.

However, following Trump's comments, oil fell sharply toward the end of the day. At 16:00 (Eastern time), U.S. crude stood around $86.47 per barrel, while Brent fell to about $89.58.

The drop in oil helped ease pressure on financial markets, as investors fear that a prolonged rise in energy prices could boost inflation and hurt economic growth.

Stock market swings from sharp losses to gains

The major indexes began the day with sharp losses, reflecting global jitters.

The Dow Jones Industrial Average fell as much as 886 points during early trading, but later managed to recover and close with a gain of 239 points, equivalent to 0.5%.

The rally was broader in other indexes. The S&P 500 ended the day up 0.83%, while the Nasdaq Composite rose 1.38%, also recovering from morning losses.

Nervousness in global markets

Uncertainty was also reflected in other financial markets. The yield on the 10-year U.S. Treasury bond rose above 4.2% during the day before retreating nearly 4.1%, while the dollar ended the day lower.

Hours earlier, Asian markets had posted steep declines. South Korea's benchmark index fell about 6%, while Japan's Nikkei 225 retreated about 5%.

On Sunday night, Trump had already warned that a temporary rise in oil prices could be inevitable. According to the president, paying more for energy in the short term is "a very small price to pay" if it helps neutralize the nuclear threat from Iran.