Markets Rebound as US-Iran Tensions Ease, Oil Prices Plummet

Global markets have reacted positively to the pause in US-Iran tensions as negotiations over an interim ceasefire deal resume. The S&P 500 rose 0.8% on Monday, with the Dow Jones Industrial Average increasing by 581 points and the Nasdaq composite up 1%. Brent crude prices dropped 6.8% to $85.49 a barrel after hitting $102 last week.

The Pentagon did not comment on the pause in attacks on Iranian coastal areas and infrastructure, but markets saw it as a positive development. U.S. futures surged early Monday, while corporate earnings reports focused attention on the sustainability of profits from AI spending.

Stephen Innes of SPI Asset Management noted that oil's sharp retreat 'loosened the geopolitical knot' around equities, currencies, and bonds. He also warned about the impact of higher energy costs on inflation expectations and consumer budgets.